Playing Matchmaker: ScanSource, Intelisys See Agent-Reseller Partnerships As Popular Route To Recurring Revenue Success

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When ScanSource finalized its blockbuster Intelisys acquisition less than 18 months ago, Buck Baker thought his legacy partners would have few issues building practices around the master agent's telecom and cloud services.

The president of the ScanSource's Worldwide Communications and Services business has since learned that the transition from transaction-based hardware deals to recurring revenue is often a slow, complicated process for many solution providers.

"You have to find some expertise there. You have to make the investment," Baker told CRN this week at the company's Global Partner Conference. "We're finding out from Intelisys that it takes a good bit of time. You might break even in 18 months, but you're probably not going to see a return on your investment for about three years. That took me aback, to be honest with you."

[Related: ScanSource CEO To Partners: Rethink How You Sell To Customers And Take Advantage Of Recurring Revenue, Services]

As a result, the Greenville, S.C.-based distributor has begun encouraging an alternative strategy for solution providers hesitant to make that recurring revenue investment right away: Partner with Intelisys agents who already know the ropes.

Baker said several agents have already expressed interest in teaming up with locally-based ScanSource partners. CRN found that multiple agents were attending the company's event this week for that very purpose, as well.

"You can start doing that and create a revenue stream," Baker said. "The agents have been great in helping VARs do that. I was a bit taken aback that agents were so willing to help the VARs get into (monthly recurring revenue) … a large number have raised their hands and said, 'Do you have a VAR in my area? I'm willing to sit down and talk to you.'"

Interested partners and agents then work with Intelisys channel managers, ScanSource business development staff to align both sides of the partnership.

This week's partner conference featured a panel of four Intelisys Platinum Partners, who fielded questions from ScanSource resellers and discussed the benefits of teaming up with an agent. Partners are not required to make upfront capital investments, mitigate financial risk and protect existing clients from potential being poached by possible telecom and cloud competitors, they said.  

Jeff Willis, president and owner of Memphis-based Direct Connections, said he is more inclined to partner with an agent until his business gains a firmer understanding of recurring revenue cloud deals. But the prospect of sharing revenue did give him pause.

"Am I going to have a partnership with them where recurring revenue is going to be in a shared environment, because of the resources they provide and the decision-making connectivity that they have, but it's going to be they're keeping a significant part of the recurring revenue? Or am I going to learn some applications and ways to drive it, and then our team takes it, and we own the margins side of it?" Willis told CRN. "I need to understand how that model works. Normally, I'm going to want to drive as much margin to the business as I possibly can. It might be we need to get qualified at a certain level so that we can take more of a stronghold of it and run it ourselves."

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