D&H VP: Distributors, Master Agents More Likely to Partner In Wake of ScanSource-Intelisys Deal

ScanSource's acquisition of Intelisys will drive more alignment between distributors and master agents as the channel looks to support both devices and networks, according to a distribution executive.

"I think it [the ScanSource-Intelisys deal] is positive for all distribution," said Peter DiMarco, vice president of VAR sales for Harrisburg, Pa.-based D&H Distributing. "It validates the entire channel strategy around providing holistic cloud services."

DiMarco told CRN that customer conversations around telecom carriers have become much more frequent over the past 18 months as more managed service providers are now incorporating cloud services into their portfolio of offerings.

[RELATED: D&H Joins Forces with AVG To Provide SMB-Friendly Antivirus Support]

"I've probably had more carrier discussions with VARs in the past 60 days that I had in the previous nine months," DiMarco said at D&H's New England Technology Trade Show in Quincy, Mass. "Every time you sell hosted voice, you may need a redundant network to provide support, you may need additional bandwidth."

DiMarco said he's had preliminary conversations with a number of master agents who are interested in partnering with D&H around telecom, cloud services and infrastructure. Some D&H partners have already built a whole business around it, DiMarco said, with one of the company's customers dedicating a sales rep to work on nothing but carrier services and telecom.

But DiMarco characterized the overall appetite for telecom services among D&H's customer base as "mixed," with many smaller MSPs preferring to work with a referral partner since it's not strategic to their core business. For this reason, DiMarco doesn't think distributor acquisitions of master agents will become a rapid trend and predicts that most distributors will initially opt for partnerships instead.

"Distributors and master agents have been trying to get together for years," DiMarco said. "It's a natural adjacency."

D&H can help blend IT and telecom services together and make it easier for partners to blend buy-sell and annuity-based business models together by putting more resources, support teams and alliance agreements in place, DiMarco said.

Although the aggregation of telecom agents by master agents presents a tremendous opportunity to distribution, DiMarco cautioned that the complexity is beyond anything distributors currently encounter.

"When you get into the carrier services world, you get into all different type of billing requirements at the state level that distribution isn't necessarily ready for now," DiMarco said.

Braver Technology Solutions launched a hosted VoIP practice a year ago after realizing that the company's engineers were already supporting VoIP providers on client sites since the providers weren't familiar with firewall rules, traffic or virtual LANs, according to Kenny Rounds, owner of the Taunton, Mass.-based company.

"For the most part, we were supporting it anyways, and just not selling it," Rounds, a D&H partner, told CRN.

Braver started its hosted VoIP practice by focusing on clients with 20 to 30 users, Rounds said, and barring any problems, will work its way upstream to customers with 50 to 70 users where edge devices are also required.

"Ten years ago, a standard voice system was completely different than a computer system," Rounds said. "Now, a voice system is much, much more like a computer system than it was before."

Interest in hosted VoIP among Braver's customer base is "evolving," Rounds said, with new technology driving demand but a large number of competitors making it more difficult to get a foothold. The business is majority recurring revenue, Rounds said.

"That's the biggest help," Rounds said. "We can count on that revenue coming in every month."

Meanwhile, Computer Networking Services is looking to diversity its operating model and expand its product and service offerings since its legacy PC and break-fix businesses aren't going to remain where they've been over the past two decades, said Phillip Horne, CEO of the Hooksett, N.H.-based company.

CNS will look into doing telecom services, Horne said, since it would definitely offer better margins than the company's present referral model does.

"Any opportunity to expand into new sectors is a good thing," Horne said, "because we're losing business on so many other ends."