ScanSource’s Baur: MRR ‘Mailbox Money’ Key to Success

ScanSource Partner Summit 2019 Opener

ScanSource this week welcomed about 300 partners and suppliers to its 2019 Partner Summit, held in Indianapolis on the eve of the Indy 500. The theme: Accelerate Your Business.

Key topics under discussion at the conference included the distributor’s new FastLane program, which stresses opportunities for ScanSource and Intelisys partners to network and, hopefully, collaborate on solution selling. The program also brings educational resources and the opportunity to earn incentives. Every $25,000 in business a FastLane partner does with ScanSource earns a point that can translate into monthly giveaways and VIP experiences. Selling Aruba, Avaya, Cisco, Mitel, Zebra and select other suppliers counts at 125 percent of purchase value.

ScanSource has also rolled out under FastLane an Ignite team to help its VARs and resellers build recurring revenue practices. Partners that sell mobile devices, including security cameras, barcode scanners and PoS systems, can work through Advantix Solutions and Intelisys to activate data plans from AT&T, Verizon and other MSOs; the devices can ship with SIMs already loaded. Partners also get help with sales, accounting models and choosing the right suppliers.

The Ignite program plays into other hot topics at the summit: transitioning to a monthly recurring revenue model, selling full solutions and heeding the voice of the customer.

“Recurring revenue is the secret to success for the channel,” said ScanSource CEO Mike Baur, who opened the Wednesday programming with a call to move beyond typical labels — integrator, ISV, consultant, VAR, MSP, telecom agent.

“Everyone’s a partner,” said Baur.

From speaking with partners at the summit, however, it’s clear that going on three years into Intelisys becoming part of ScanSource, there are still silos. Much of the energy at the event was around acknowledging the need for a reset and breaking down those walls. The incentive, of course, is fiscal reality: Customers want the option to buy everything from connectivity to productivity suites to security in an “as-a-service” model, preferably from one solution seller.

In short, says Baur, “Reduce the complexity and simplify the options.”

Scroll through our image gallery below for highlights and a recap of the event.

Datapipe's Robb Allen
Customer Experience

Baur says the CX opportunity will represent a $100 billion total addressable market by 2023, broken down into six strategic growth areas: devices, CX, connectivity and cloud, SaaS, services, and operational innovation.
To meet demand, he says ScanSource’s strategy is to acquire rather than build, with several of its recent buys in support of improving the customer experience and moving reseller partners to MRR. The RPM Software buy, for example, is about efficiently processing commissions.

Baur says ScanSource is paying out $250 million per month in recurring payments and is seeing 26 percent MRR growth every quarter.

“Mailbox money,” he said. “This is the magic of recurring revenue.”
Fast Lane ScanSource Partner Summit 2019

Baur provided insights into the genesis of FastLane, saying that in the past “we spread the love like peanut butter,” providing the same services whether a partner brought in $1,000 a month or $100,000. Going forward, the more business a partner does, the more “all in” ScanSource will be in terms of investment.

He also asked partners to keep the lines of communication open.

“My biggest fear is that we’ve gotten so big that we don’t look fast or agile,” he said. “Got a problem? Tell us, we’ll fix it.”
Panel ScanSource Partner Summit 2019
FastLane Panel

A lineup of ScanSource executives filled in partners on the finer points of the FastLane program, which has four pillars: acceleration, connections, development, and of course, rewards.

(left to right): Tony Sorrentino, president of sales, North America; Ansley Hoke, SVP, marketing, North America; Brian Cuppett SVP, sales; David Hertwig, SVP, sales; and Scott Agatep, EVP, solutions & services.

Key points for partners: ScanSource used to have five business units but collapsed these into one earlier this year. The company is pivoting back to a focus on specialization and aligning teams to better serve partners. Its sales crew is larger, with dedicated account executives and 30 percent more bodies on the account management beat. Solutions selling is king.

Agatep called out expanded service offerings, such as configuring devices with connectivity before shipping them, and says that up to 27 percent of inbound support calls are from end customers that ScanSource services for its partners.

“We’re productizing our services,” he said, citing a life-cycle management offering to avoid end-customer downtime; site surveys for Wi-Fi deployments; and helping sales teams move smoothly between capex and opex through the new Ignite team that bridges gaps between ScanSource and Intelisys product lines and expertise.

Hoke says marketing teams are now “extensions of key accounts” to help partners capitalize on growth areas: incremental business development with adjacent techs, new markets, thought leadership, keeping partners top of mind with customers, digital journey mapping, and amplifying the voice of the customer.

“Everything is moving to as-a-service revenue,” Agatep said. “You’re going to see a lot of that from us over the next year.”
Rob Lamb ScanSource Partner Summit 2019
Salesforce & CX

Rob Lamb, head of customer evangelism for Salesforce, says CX is worth investing in, for partners and their end customers.

“The majority [of customers] say they’re disappointed in the services that their partners are delivering,” says Lamb. “But 67 percent will pay more for a great experience.”

He adds that solution selling creates an interesting opportunity to monetize relationships at multiple touch points: “Products are not defensible space,” says Lamb. “Partners need a deliberate plan to evolve."

That means start building experiences today for the customers of tomorrow. Success is about making your customers not just trust you, but love you. Individual services are not as important as the experience. And AI is getting real: Check out Google Duplex. 

“I cannot say it enough: Listen to your customer. Make sure everything you do is built around the customer. You’re never done.”

The key to Salesforce’s huge growth, according to Lamb: “Perpetual dissatisfaction. Complacency is the enemy.”
Dixon ScanSource Partner Summit 2019
5G and Wi-Fi 6

ScanSource CTO Greg Dixon had just 15 minutes to update the audience on 5G and the future of wireless communications.

“We’re so anxious for 5G that some of the carriers have implemented a sort of 4.5G,” said Dixon. However, a full changeover will not be fast, or inexpensive. The four MNOs have 300 cellular towers, each able to cover about 10,000 feet. But 5G requires a whole new network of millions of small cells that will cover only 1,000 feet each.

“Do the math on that,” said Dixon. There’s a huge amount of construction and spending that needs to happen.

Meanwhile, Wi-Fi 6 will be here in the nearer term and will deliver four times the speed of current networks. Both technologies offer more bandwidth, better capacity and reliability, more efficient energy usage and expected adoption in 2020 to 2021.

So where do we place our bets for IoT? Dixon leans toward 5G for now, but at some point, could there be a singularity of sorts?

“Maybe the whole notion of wireless LAN and wireless WAN goes away, and it’s just a network!” he said. Gotta love thinking big.

For now, he says there are opportunities for partners in replacing every existing wireless device to take advantage of 5G and Wi-Fi 6 while also providing that connectivity.

“You don’t have to choose sides,” he said. "It’s called solution selling."
McLaren ScanSource Partner Summit 2019
McLaren Group

Karen McElhatton, CIO of McLaren Group, asked the crowd if anyone was fortunate enough to be tooling around in one of her employer’s cars. No takers.

In February, ScanSource announced a partnership for the 2019 Indianapolis 500, where McLaren and driver Fernando Alonso hoped to compete at the 103rd running of the historic sporting event. Unfortunately, McLaren didn’t qualify, but partners did learn about the opportunities around autonomous cars.
MRR Panel ScanSource Partner Summit 2019
MRR Panel

A standing-room-only crowd packed in for a panel discussion on transitioning to a recurring revenue model.

(left to right): Katie Wyckoff, VP of Sales for Shamrock Consulting Group; Cleveland McBeth, VP, Worldwide Reseller Financial Services, ScanSource; Dan Sterling, senior regional partner manager, ScanSource; Jeff Sumner, CEO and co-founder, Corporate Technologies Group; Chris Marlar, VP, supplier services, ScanSource.

The panel acknowledged barriers that have hindered integration of Intelisys and ScanSource partners, from lack of a common lingo to the need to build new comp plans for sales teams and choose the right suppliers. Wyckoff said relinquishing the control that comes with on-premises solutions and trusting as-a-service companies to work with Shamrock's customers required a change of mindset.

The payoff? CTG's Sumner says he has line of sight to 90 percent of 2020 revenue.
Afternoon Session ScanSource Partner Summit 2019
Cloud Is Now

“I love hanging out with partners,” said Andrew Pryfogle, senior vice president, cloud transformation, Intelisys, kicking off afternoon sessions. “They’re risk takers.”

They have to be: As Pryfogle, an advocate for all things cloud, pointed out, the business landscape is changing rapidly, as is technology. AI, for example, has moved from descriptive to predictive, with prescriptive scripts being used now. Autonomous mode on the horizon. Cloud is mainstream, with Cisco comping its salespeople 3X to move to Flex, its cloud collaboration solution. Avaya, Mitel, Microsoft, Google — all are very clear that the future is cloud. Office 365 might not pay out big revenue for partners, but Microsoft Teams is another matter, says Pryfogle.

SD-WAN is “a generational opportunity for the channel,” he said. And CX is “the big why” for decision-makers.

“Cloud is powering CX,” says Pryfogle. ”At the end of the day you should be counseling customers that it’s too risky not to move to cloud.”

All this change is complicated. He says that’s a good thing.

“Where there’s complexity, there’s channel,” he said. “That’s a very good-news story for all of us.”
Lucas Oil Stadium

ScanSource closed its 2019 Partner Summit with a party at Lucas Oil Stadium, home of the Indianapolis Colts. Partners could go on the field to toss some passes and see if they could put one through the uprights. Many tried, a few succeeded.

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