ScanSource's Intelisys Finds Ways To Help VARs, Agent Partners Work Together

Intelisys, a ScanSource company, believes that the line between VAR and telecom agent partners is starting to blur. But instead of jumping into a new and unfamiliar business model, these different partner types are joining forces.

Petaluma, Calif.-based Intelisys was bought by IT distributor ScanSource in 2016 for $83.6 million plus earn-outs. The two companies, at the time, touted the possibilities opened up by combining an IT services and hardware provider with a telecom and cloud solutions provider. The combo could disrupt the industry – especially for telecom agent partners and traditional VARs.

Intelisys and ScanSource believed that their consolidation would trickle down into the partner community. VARs might telecom practices and recurring revenue to their mix. Agent partners, on the other hand, might add ancillary communications hardware, such as headsets, to their portfolios.

[Related: Intelisys Channel Connect: Master Agent Rolls Out Ambitious Cloud Training Agenda, New Tools For Partners]

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It hasn't happened that way yet – agents and VARs aren't really interested in learning the other one's business – but Intelisys is working hard to make sure the right find one another.

"It's like finding an electrician or a plumber, each does different things, and they don’t want to be the other," according to Craig Schlagbaum, vice president of indirect channels for Comcast Business, an Intelisys supplier partner.

However, as partners strive to fulfill their clients' needs by becoming strategic service providers, partners are finding each other, he explained.

"Agents know networking, but they don't really know about applications," Schlagbaum said. "Instead of trying to learn about each other's business, what probably makes more sense is bridging it all together with a referral mechanism between different kinds of partners so solution providers know who to go to, and who to work with that is an expert in the particular area."

Intelisys has been helping interested VARs build out recurring revenue practices. The master agent has seen "massive" interest from VARs in building a recurring revenue practice and has added more than 1,000 VARs to its partner community over the past three years, according to Andrew Pryfogle, senior vice president of cloud transformation for Intelisys.

But not every VAR is ready to build out their recurring revenue stream alone. For that reason, Intelisys has been playing matchmaker between VARs and its traditional agent, or sales partner base. "There's been an increase in teaming as a result of VARs that are getting engaged with telecom," he said.

Intelisys has created a convergence team in Greenville, S.C., the headquarters of ScanSource, that is helping VARs build recurring revenue by getting them plugged in with various training programs, like Super9 or Cloud Services University, or getting introduced and brokering meetings with sales partners who can help.

Intelisys can also help VARs and agents determine the payment terms of their deal, said Brian Leonard, director of marketing for Intelisys.

"We control the payout, so there's no ambiguity. There is trust that they are going to get paid their piece," Leonard said. "We are seeing more and more of those conversations happening."

As a way to grow their recurring revenue businesses quickly, some VARs are even showing interest in acquiring agents. Pryfogle said that Intelisys has also seen one instance so far of an agent acquiring a VAR organization.

"We are seeing a lot of evidence that convergence is accelerating," he added.

Customers want to buy complete solutions from their trusted advisors, but the convergence between VAR and agent partner models and their product portfolios will take time.

VARs putting effort into building their own telecom practices today may not bear fruit for two years, Pryfogle said. "Frankly, it's going to accelerate M&A activity as organizations look to close gaps in their skill sets by acquiring another business."