ScanSource to Acquire Intelisys in Bold Move

… if the ordering process becomes more difficult or if the support they need is not as available, this could force them to look elsewhere.”

In the U.S., the SMB market spends about $150 billion on telecom services; just 10 percent of that revenue goes through the indirect channel today. The distributors see this as an ideal time to go after this market. SMBs don’t typically have a large IT staff and they heavily depend on the channel for help and support, as cloud becomes a bigger part of their future IT plans.

“We’ve always put ourselves in the position of finding markets that are underserved by the channel, but markets are going to be served more by the channel in the future than they will be by a direct sales force,” said Baur.

Tricia Wurts, president of Wurts & Associates Inc., a channel consulting business, agrees, noting that ScanSource has a track record of understanding when to get into markets ahead of the curve.

“I also think that the cultures of the two companies meld really well given their mutual philosophies of customer care and value-add,” she pointed out. Wurts also noted that Intelisys, for example, got into cloud early and launched its Cloud Services University education center for the channel.

That said, equally important to the success of this acquisition is the adoption of a recurring revenue business model by ScanSource VARs.

“This is exactly why we acquired Intelisys; they have the secret sauce on how to do this,” said Baur.

Jay Bradley, president, telecom services, Intelisys, agreed.

“This is what we do. We built the largest partner community in the nation selling recurring-revenue services,” he said, adding that the company has a number of programs to help VARs move into the recurring-revenue space.

The company’s mission has been to empower its independent sales channel to find success with the carriers and supplier partners with which it does business.

Intelisys’ Advanced Commissions Program is at the core of helping partners build an annuity stream. It allows them to get paid on a deal as soon as they book it, versus five to six months later.

“This helps solve their cash-flow problem,” said Bradley.

Another program for agents, VARs, IT solution providers, systems integrators and MSPs, is the Partner Investment Program – low interest loans that average about $75,000 – to help partners build out their businesses.

While ScanSource couldn’t comment on what a road map for bringing together the two companies channels might look like, it has a number of events scheduled for October when its partners – more than 25,000 – could expect to hear more about what’s in store post-acquisition.

Intelisys has about 2,400 sales partners.

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