Intelisys Partners Could Win Big in Deal With ScanSource
Amid the fallout of this week’s acquisition of master agent Intelisys by distributor ScanSource lies the fate of roughly 2,000 sales partners, many of them VARs undergoing various stages of transformation to managed services or other new models.
Indeed, ever since talks intensified during the first weeks of spring, Intelisys officials said they were consumed with ensuring any deal would be one where they could look their partners in the eye and promise more opportunity.
A few hours after the announcement this week, some of the principal architects of the new entity offered their thoughts on what the union means for Intelisys partners.
Jay Bradley, President of Intelisys
(ScanSource CEO Mike Baur) reached out to two of our principal owners in March. He flew up to New York, met with (Rick) Dellar in person and (Rick) Sheldon on video.
Mike had said, “hey, this might be a good combination. This is some research we’ve done and you guys are the biggest and the best and research has confirmed that. You know, let’s have a conversation about how we might come together.”
And Dellar said, “well, we’re not for sale.”
And Mike said, “well, will you talk to me about it anyway?”
When they got more of us involved … what we looked at so strongly is, did the cultures mesh? We’re in a relationship business. Part of why partners really are excited about doing business with us is because we protect them and we make sure that they’re seeing the right opportunities and selling the right carriers and so on and so forth.
So what we really took a look at in those early conversations with Mike and his team was, do we have a cultural fit here that we can be proud of?
Can we take this marriage out to our partners and say, “look this is another way to scale? This is another way to add opportunities, to sell new products and services, to your bag of tricks.”
So that’s what we focused on. As we got to know these guys, we determined that this is something that could work and then the conversation went from there.
Andrew Pryfogle, SVP Channel Transformation, Intelisys
We’ve been working with VARs for the past four-plus years in trying to help VARs make this pivot to recurring revenue, specifically around cloud but also very much around connectivity.
That’s probably the lowest hanging fruit in their businesses, is the existing telecom spend that their existing customers have every month that those VARs have zero share of today.
So we’ve been having lots of those conversations … but I think scattershot is probably a fair description of the results. What we have found as we have learned from these relationships is that there are some headwinds that these guys fight against.
The first is, how do I make a shift to a model that cash flows much differently from what I’ve ever done before.
I’m used to getting paid up front and enjoy my margin up front on a deal. Not having it paid out to me over a matter of time. So that’s been one significant challenge. The way we’ve addressed that challenge … is our Advance Commissions Program that helps solve that cash flow problem for many, many VARs that have been wanting to do this but haven’t had the means to do it.
What that does is it pays a VAR up front at the time of booking, so that they don’t have to wait the five or six months for a deal to get installed and billed and commissioned out to them. It puts money in their pocket immediately and that has really moved the needle tremendously with our VAR partners that have been wanting to get there faster.
The other thing is our commitment to education. CloudServicesUniversity.com is a platform that we’ve built over the past couple of years that now has over 3,000 sales partners registered. Over 1,300 of them have earned certifications.
The biggest evidence of that being effective for us and our partner community is that over 80 percent of our “cloud wins” are coming from university attendees. It’s having a huge impact on our partner community.
The bottom line is our partner community is a couple thousand sales partners around the country. When we start to apply these best practices to a much larger community at ScanSource, we think the opportunities are boundless.
Mike Baur, CEO, ScanSource
One last point on Andrew’s comment about the cash flows and their advance commissions program: They were using their balance sheet as a small private company to fund that. We’ll have the ScanSource huge balance sheet to fund that as this new entity evolves.
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