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ScanSource President: Combining Digital, Hardware Distribution Key To Success

Joseph F. Kovar

‘Hybrid distribution for us is really all about enabling customer choice. And it‘s really all about, as we talked about before, connecting devices in the cloud and selling devices plus digital. Think of it as ‘hardware-plus.’ More hardware plus more cloud plus more services,’ says ScanSource President John Eldh.

John Eldh
John Eldh

Building On Growth

IT distributor ScanSource this week reported a 10.1-percent year-over-year rise in sales to $943.8 million and an 8.9-percent rise in GAAP net income to $24 million in its most recent quarter .

All in all, it was a great quarter for the distributor, said John Eldh, president of the Greenville, S.C.-based company. Eldh, who in February took over as ScanSource’s president after driving the firm’s hybrid distribution strategy, told CRN in an exclusive post-earnings meeting that the key for future growth is the strategy of combining the company’s mobility and related digital products and services into complete solutions for its channel partners.

ScanSource’s digital business is growing faster than its hardware business, but the hardware business is still a much larger part of the distributor’s revenue, making them both important going forward, Eldh said.

[Related: ScanSource Gets New President, Reports Q2 Growth: 5 Things To Know]

“From a revenue perspective, and from its importance to our gross profit, importance for the company, hardware is extremely important to us in terms of our profitability and our growth,” he said. “But we see the digital part of our business growing faster this quarter. And in the last few quarters, we’ve seen our hardware growth be very, very strong, and even challenge that digital growth in some periods. But overall longer term, we think digital will continue to grow faster.”

ScanSource’s hybrid distribution strategy is also important to the distributor’s channel partners, Eldh said.

“[Hybrid distribution’ has expanded their market opportunity and helped them drive differentiated growth and helped them move into recurring revenue,” he said. “And maybe most importantly, helped them to say ‘yes’ to customer requirements because they now have a one-stop shop in ScanSource where they can come for all the components that make up the solution.”

There’s a lot going on at ScanSource that is not reflected in a simple quarterly financial report. For details, read on.

 
Joseph F. Kovar

Joseph F. Kovar is a senior editor and reporter for the storage and the non-tech-focused channel beats for CRN. He keeps readers abreast of the latest issues related to such areas as data life-cycle, business continuity and disaster recovery, and data centers, along with related services and software, while highlighting some of the key trends that impact the IT channel overall. He can be reached at jkovar@thechannelcompany.com.

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