Is the VAR channel going away? No—but Nikesh Arora says its lowest-value activity is changing. In a 2024 CRN interview, the Palo Alto Networks chairman and CEO argued that simply processing hardware or passing through software licenses is becoming less differentiated. He sees stronger roles for partners that represent customers, arrange financing, advise on security choices, evaluate architectures, customize platforms and deploy them.
What Arora means by a changing VAR role
Arora’s argument is Palo Alto Networks’ go-to-market view, not proof that every value-added reseller (VAR) must adopt one identical business model. His central distinction is between transaction processing and services that help a customer achieve a security outcome.
- Lower differentiation: shipping hardware, taking an order or processing a digital software transaction.
- Higher-value work: customer representation, financing, advisory services, product evaluation, customization, systems integration and deployment.
Arora told CRN, “The ones who are still processing hardware, they will need to innovate or they will lose share to the value-added VARs.” He added that software-focused partners need to become “advisers, being evaluators, being deployment specialists.” CRN’s 2024 report presents those comments in the context of Palo Alto Networks’ shift toward platforms and software delivered digitally.
Is the VAR channel going away?
No. The evidence points to a division of labor rather than the disappearance of VARs. On Palo Alto Networks’ May 20, 2024 earnings call, Arora said traditional VARs can still provide customer representation and financing, while systems integrators (SIs) and global systems integrators (GSIs) often lead larger re-architecture and transformation projects. “So there is a role for both,” he said in the corrected Q3 FY2024 transcript.
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The practical question is whether a reseller’s contribution ends at the transaction or continues into advice, implementation and ongoing operations.
How are VARs different from systems integrators?
The categories overlap, but Arora describes different emphases in the deals Palo Alto Networks is pursuing.
| Dimension | Traditional VAR emphasis | SI/GSI emphasis |
|---|---|---|
| Core contribution | Customer representation, product sourcing and, on some deals, financing | Consulting, architecture and complex transformation |
| Typical engagement | Resale, evaluation and deployment support | Re-architecting environments and integrating multiple systems |
| Customer value | Access, commercial execution and practical implementation | Program-level change, customization and integration at scale |
| Relationship to Palo Alto Networks | Can lead the vendor into opportunities and may add SI-like capabilities | Often drives platform amplification and execution in larger programs |
These are not mutually exclusive labels. Arora told CRN that VARs with consulting capabilities can work much like SIs because they lead Palo Alto Networks into deals: “The ones who have those capabilities, yes, we’re playing well with them because they are no different than an SI, because they lead us into deals.”
Why cybersecurity vendors need services partners
Modern security products are rarely isolated purchases. A SaaS security platform may need identity, networking, endpoint, cloud and data controls configured around an existing environment. Customers also need help selecting the right modules, migrating policies, integrating tools and operating the result.
That is why the CRN article says partners thriving in the SaaS security market provide consulting and advisory services, as well as complex customization or systems integration. Palo Alto Networks’ own description is especially direct: “A lot of our platform, amplification and execution happens through the SI (systems integrator) channel — we can’t get it done without them.” CRN reports that statement.
What does a VAR need to do to stay relevant?
Move beyond product selection
Build a repeatable advisory process: assess the customer’s environment, document risks, compare architectures and explain trade-offs before recommending a product.
Develop deployment capability
Customers need configuration, migration, policy tuning and integration—not just a license key. A VAR can hire specialists, train existing staff or partner with an SI for work outside its scope.
Add security expertise
In Palo Alto Networks’ 2025 filing, the NextWave program is described as focusing on solutions-oriented distributors and channel, delivery and services partners with security expertise, supported by marketing resources, technical and sales training, and support. The filing describes the vendor’s priorities; it does not establish a universal requirement for every reseller.
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Create continuing services
One-time implementation can become a longer relationship through monitoring, optimization, incident support or managed security services. Those services require staffing, documented processes and clear responsibility for outcomes.
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Use financing and representation deliberately
Arora’s earnings-call distinction matters because financing and customer advocacy remain useful even when delivery is shared with an SI or managed security provider. A VAR does not have to become a full-scale GSI to contribute commercial and customer knowledge.
What the Palo Alto Networks deal mix suggests—and does not prove
CRN reported Arora saying that about half of Palo Alto Networks’ business came from larger, longer-cycle deals more closely associated with SI partners, and that this portion was growing faster than smaller transactional deals. This is a company-specific comparison attributed to Arora in a 2024 article; it is not a current figure for Palo Alto Networks and is not an industry-wide statistic.
The implication for a partner is directional: larger platform transformations can reward consulting and integration capacity, while transactional resale remains one part of the channel rather than the whole opportunity.
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Current context: Palo Alto Networks’ NextWave ecosystem
Palo Alto Networks announced an updated NextWave Partner Program on February 5, 2026. The company says it spans resale, co-sell, delivery, support and managed services, with separate paths for channel resellers, GSIs, managed security service providers, cloud service providers, service providers and technology partners. See the 2026 announcement and the NextWave partner overview.
The program also lists digital learning, instructor-led training and role-based certification through Palo Alto Networks Education Services. Eligibility, regional availability, training schedules, commercial terms and program economics can change, so prospective partners should confirm those details directly with Palo Alto Networks.
A practical decision test for a VAR
- List the work your business performs after an order is signed.
- Separate activities that are easily replaced by online purchasing from those requiring trust, expertise or local execution.
- Choose a focused security specialty rather than claiming every service.
- Decide which capabilities to build internally and which to deliver with an SI, GSI or managed security partner.
- Measure recurring services, deployment quality and customer outcomes—not only booked resale revenue.
Bottom line
Arora is not predicting the end of VARs. He is arguing that pure transaction processing is becoming less distinctive as software moves to SaaS and platforms. VARs that add advice, evaluation, financing, implementation or managed services can remain strategically important, while SIs and GSIs bring complementary transformation and integration capacity. That is Palo Alto Networks’ channel perspective; each partner must test the economics against its customers, skills and market.
Frequently Asked Questions
Does every VAR need to become a systems integrator?
No. Arora’s comments leave room for traditional VAR strengths such as customer representation and financing. A reseller can specialize, add selected deployment services or work with an SI instead of building a full GSI practice.
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Where can a prospective Palo Alto Networks partner check current requirements?
Start with the official NextWave overview at https://www.paloaltonetworks.com/partners and Education Services at https://www.paloaltonetworks.com/services/education, then confirm regional eligibility, courses and commercial terms with Palo Alto Networks.
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