Channel Connect 2023: ScanSource Maps Out Practical Pathways for VAR, Agent Partners

By: Jim Roddy, President & CEO at the RSPA

Last year’s Channel Connect conference marked a paradigm shift for ScanSource as the distributor urged its traditional VAR partners and voice/data/cloud services agents to become “hybrid” solution providers selling far beyond their current linecard. This year’s event, held Oct. 16-18 at the Hilton Orlando, focused on the practical pathways VARs and agents can navigate to begin the steps towards hybrid provider status.

To me, the 2022 event felt like ScanSource asked partners to hop onto a boat and take a tour of the ocean – showing them both the pristine waters and choppy waves of the hybrid model – the right first step to introduce a new concept. But few were ready to plunge into the unfamiliar deep sea. Channel Connect 2023 was more of an Olympic swimming pool with ScanSource directing partners to choose an additional lane to swim in:

  • You’re a POS/payments VAR? What do you think of trying mobility, cloud services, or security?
  • Could networking and connectivity be the right next step for you?
  • You can also consider becoming an agent by adding UC (unified communication) and CX (customer experience) technologies.

JR Cook, SVP of Strategic Relations for ScanSource’s Intelisys division, said it bluntly on the main stage minutes into the general session: “We want to challenge you to check out the technology you’re a little uncomfortable with.”

In the final hours of Channel Connect, I met with ScanSource Chairman & CEO Mike Baur to better understand the direction of the $3.5B distributor and its hundreds of channel partners.

A phrase Baur used a few times during our conversation was “the Mercury Moment,” referencing 2006 and the years after when Mercury Payment Systems first introduced integrated payments to retail IT VARs. Back then, several resellers were hesitant to adopt this new outside-their-comfort-zone offering, but those who did significantly increased their revenue and profits. Baur feels what ScanSource is presenting to its partners in 2023 is a new “Mercury Moment” for the retail IT channel.

“We are looking at what the end user wants, how they want to acquire technology and services, and who they trust,” Baur said. “We say, ‘Why not our channel?’ The channel says, ‘We’ve never done that.’ We say, ‘We’ll help you.’ That’s the same thing we saw with Mercury and RSPA (member) organizations. They were a group that knew how to be successful, but they were a little slow to move. The successful companies said, ‘What else can we do?’”

Baur confirmed ScanSource’s shift from messaging about aspirational total solution providers to focusing on next steps VAR partners can take to venture down that path. “We learned this takes time – more than I think we knew and more than what most partners knew,” he said. “Last year we were almost declaring that if you don’t do this right away you’re going to lose out, and I think we oversteered some of our agents – we scared them. That’s why this year we’re saying take a pathway. You don’t have to go fast. We can help you along the way.

“There was concern from our partners this was going to be too hard if they had to move fast. I talked in my keynote that ScanSource is playing the long game because we know the reseller channel also has to play the long game.”

Part of that long game will be separating the ScanSource and Intelisys partner conferences in 2024. But don’t take that as a sign ScanSource is backing away from its hybrid solution provider dreams, Baur said. I asked him about that directly because I appreciate that Channel Connect exposed unified communications solutions to retail IT VARs who had never considered them before.

“We’ll still bring some of those products to that channel conference, and the UC suppliers will know the message to deliver to that group,” Baur replied. “The message will be simpler – it will be more tailored and will meet our partners where they are. We’re going to make sure this is more digestible. When we share the whole big message, it’s daunting.”

This situation reminds me of how POS solution providers methodically adopted managed services. At first, break/fix POS resellers didn’t even know managed services existed. When POS technology started running on the network and in the cloud, the door to services theoretically opened wide – but very few VARs raced in that direction. Over the course of the past decade – yep, 10 long years – retail IT VARs added one or two products or services across one or two (or more) years and slowly adopted the recurring revenue managed services business model.

For ScanSource, this is only year two of the journey to “hybrid” solution provider status. Nothing permanent in our channel happens overnight.

Register today for RSPA Inspire, the retail IT channel’s premier leadership conference. Experience Networking Nirvana!

Retail Panel: Behind the Storefront
I was honored to moderate two Channel Connect panels, the first focusing on the retail vertical. Lora Coggins (an RSPA Board member) of Toshiba, Gopal Ramachandra of NCR, and Frank Codina of Honeywell discussed “Behind the Storefront: Technology Essentials for the Modern Retailer.” We talked self-checkout, machine vision, e-commerce, retail media networks, labor management software, analytics, IoT, AI, security, and more.

The responses to a question I asked about sustainability stood out to me. Every organization on the panel has a page on their website about sustainability (I even saw a couple sustainability reports) but I rarely hear VARs mention sustainability. Should VARs be talking sustainability with their merchants? Answers included:

  • This won’t necessarily be a sales conversation. It’s the VAR’s opportunity as a trusted advisor to show empathy and build a stronger relationship with the end user.
  • Sustainability offers a mutual benefit to the merchant and the VAR. The VAR can provide technology solutions that result in less waste for the merchant.
  • If you recommend digital receipts, not only will that save the merchant money and labor related to paper rolls, but it creates more data the VAR can use to understand the merchant better and help them run their business better.

Hospitality Panel: Maintaining the Human Touch in a Tech Driven World
Wednesday morning I moderated “Man and the Machine: Maintaining the Human Touch in a Tech Driven World” about how technology can keep – or elevate – the hospitable aspect of the hospitality vertical. I was joined on stage by representatives from three RSPA members: Craig Witsoe of Elo, David Vander Dussen of Epson, and John Maieli of Star Micronics. I jotted these notes during our discussion:

  • Technology can help restaurants make fewer mistakes. That results in less waste and cost savings for the restaurant and a better customer experience for the guest.
  • Many restaurant owners started at the bottom as servers, so they’re more in tune to what will make for both a better employee experience and better customer experience.
  • Everyone is talking about self-service and we’re seeing more self-service technology. But this is only the beginning. You ain’t seen nothing yet with self-service.
  • It’s impolite to not meet a guest where they are and provide them the path to engage with you the way they want.
  • Where we’re likely to see more AI applications is in fast food, like at the drive through where conversations and tasks are repetitive. Restaurants are learning that upsell requests generated by AI at the end of the order positively impact customer satisfaction where upsell at the beginning of the order hurt customer satisfaction.
  • Labels are helping restaurants reduce waste which helps them combat rising food costs.
  • Talk with your customers and listen to what they need and want. Don’t get hypnotized by trends.

Marketing Advice for VARs and ISVs
As RSPA has documented every year in our annual Retail IT Channel KPI Study, marketing is not a strength of most VARs and ISVs. ScanSource staff offered plenty of guidance through an education track 100% dedicated to marketing. Among the quotes that jumped out to me:

  • “The goal in marketing isn’t to sell more stuff. Our business is about building trust, engagement, and thought leadership.” Josh Johnstone, Solutions Marketing Director
  • “Make sure your blog posts are personalized. The goal should be to help your customers and prospects understand your industry and technology, not make you look smart.” Kyle Mills, Channel Marketing Director
  • “Be careful not to inject your own preferences into your messaging. You are not the target audience. Be sure your audience loves your content.” Luke Coburn, Intelisys Marketing Technology Manager

People, Culture, and Building Teams
Talk about a coincidence: Day 2 of the RSPA Inspire 2024 leadership conference will focus on company culture; Day 2 of Channel Connect kicked off with an panel offering advice on culture led by ScanSource/Intelisys EVP Paul Constantine who I first met in 2006 at RSPA Inspire.

Some of the most instructive insights from the panel were:

  • The goal is to have dissent among the team and have diverse viewpoints. The leader can hear the team out and then make a decision – the most logical and intelligent decision.
  • Ask employees what motivates you and what demotivates you. We did that with one employee and his productivity doubled because what we thought was motivation was actually demotivation. Stop doing what demotivates people.
  • Great leaders prepare and then ask questions. They don’t make statements.
  • Trust happens when employees feel included and supported. Then you can challenge them, work more closely, and get their best performance. Make your employees feel involved and listen to them.
  • You need to allow people to embrace the new work/life balance while still understanding your primary responsibility is to serve your partners and customers.

Don’t forget to register for RSPA Inspire, the retail IT channel’s premier leadership conference. Experience Networking Nirvana!

Jim Roddy is the President and CEO of the Retail Solutions Providers Association (RSPA). He has been active in the retail IT channel since 1998, including 11 years as the President of Business Solutions Magazine, six years as an RSPA board member, one term as RSPA Chairman of the Board, and several years as a business coach for VARs, ISVs, and MSPs. Jim has been recognized as one of the world’s Top Retail Influencers by RETHINK Retail, a Leading CannaTech Influencer by The CannaTech Group, and is regularly requested to speak at industry conferences on SMB best practices. He is author of two books – The Walk-On Method To Career & Business Success and Hire Like You Just Beat Cancer – and is host of the award-winning RSPA Trusted Advisor podcast. For more information, contact