I always enjoy conferences hosted by distributors because their broader industry perspective positions them to help retail IT VARs and ISVs (and me) see around corners.
So when ScanSource President of Specialty Technologies Mark Morgan showed a future-forward slide comparing the channel in 2016 vs. 2027-32 on the main stage to kick off ScanSource Partner First 2026 Aug. 31-Sept. 1 in Nashville, I took note.
Morgan’s slide included these insights highly applicable to the retail IT channel:
- 2016: Deep vendor and product certification; 2027-32: Agentic AI deployment and governance
- 2016: Vendor partner program navigation; 2027-32: Multi-supplier and ecosystem orchestration
- 2016: Volume hardware and software resale; 2027-32: Vertical and domain specialization
- 2016: Early cloud migration literacy; 2027-32: Recurring revenue and consumption pricing mastery
- 2016: Relationship-based selling; 2027-32: Outcome-based, success partner selling
“This is one of the most interesting moments in time in our channel,” Morgan told the nearly 1,000 attendees. “We see growth opportunities. Some say growth in the channel is waning. We don’t see that.”
“You do have 6-8 more competitors than you had five years ago. Our goal is to help you punch above your weight class and do it with more recurring revenue and less risk. We want to help you embrace AI, security, and infrastructure. We want to train you to build a practice around AI. We encourage you to embrace a model different from what you’re doing today.”
“We’re building a model the whole channel should embrace. We want to help you build a repeatable growth engine that creates continuous engagement with your customers.”
I sat down privately with Morgan as the conference closed to dig deeper into his statements and ScanSource’s updated offering, and to discuss how they relate to the retail IT channel in particular.
Morgan, who joined the distributor in 2003, spoke to me about the decline of conventional resellers and who (or what) will take their place. “We’re seeing new sellers – people who don’t want to sell the traditional way,” he said. “They want an asset-lite business model. They want to focus on being the trusted advisor to the customer.”
Getting closer to the customer isn’t just something Morgan is preaching. He said ScanSource’s recent efforts to learn their partner customers better has yielded new insights. “You don’t know what you think you know about the channel,” he said. “We built some AI tools in house to learn more about our customers. Then we did more digging to find the differentiators.”
As a result, ScanSource has adapted its offering to where nearly a quarter of its revenue (23%) is now recurring through services and its Intelisys connectivity and cloud services division while device sales represent 77% of revenue. One-third (34%) of ScanSource’s gross profit is from those recurring revenue sources with a stated goal to grow to 50% within three years.
So how can high-initiative yet historically traditional retail IT channel VARs and ISVs take advantage of these emerging technologies and services?
The first step for many is to pause their ultra-busy execution mode to determine their strategic go-forward plans. The best solution providers are people of action, but sometimes you need to reflect on the right path to your destination instead of immediately charging forward.
This reminds me of the cartoon depicting a machine gun salesman being ignored by a medieval-era king and his soldiers who are armed only with spears and a sword. “Tell him we haven’t got time for any of his bright ideas,” says the king. “We’ve got a battle on our hands!”
One RSPA member VAR I talked with at the conference offered a potential lesson for ScanSource and other distributors and vendors seeking to shift solution provider behavior.
The VAR told me he’s open minded, but he and his team don’t have time to weigh every option – or even half the options – presented to them by current and prospective partners. “It would help if you would understand my business, then suggest to me one or two starting points,” the VAR said. “But don’t stop there. Propose a roadmap of the next services and products you think would fit me and my merchants.”
That feedback reminded me of the book Simplify, which I reviewed on this blog about a year ago. One insight from the book is: “The essential first step — make the user experience easy and simple — requires empathy with the user and a genuine simplifying mission.”
During my nearly 30 years in the channel, I’ve preached to solution providers to lean on your distributors and lean on your vendors. That’s even more true today in this AI-powered world – and Morgan recommends taking it a step further. Lean on everybody, he essentially says.
“Canalys says 82% of channel partners are not fully ready for AI,” Morgan said. “We want to train you to build a practice around AI.
“We believe the channel is moving towards more partner collaboration. This is Channel 2.0. This is a renaissance of the channel.”
More Thoughts & Insights from Partner First 2026
A main stage panel featuring Keith D’sa of Axis Communications, Kalpit Mehta of Brady, Steve Guillman of Cisco, Michael Brandenburg of RingCentral, and moderator Katherine White of ScanSource discussed the top trends for retail solution providers:
- Business intelligence: “Marketing and operations see the value in the data. Be a business intelligence partner.” (That aligns with what we heard a month ago at RetailNOW 2026: Ready or Not, AI-Powered Data Analytics is Your Future.)
- Automation for efficiency: “Merchants are asking for solutions, not the latest technology.”
- Convergence of security and networking: “AI is presenting an opportunity to refresh hardware more than two years old that isn’t AI-ready.”
- Customer experience: “Help merchants leverage a mix of AI agents and staff to handle every call from customers.”
During his main stage talk, ScanSource Chairman & CEO Mike Baur provided a history of ScanSource and how that influences the distributor’s growth-minded philosophy today:
- “We’ve been operating a little bit on defense. Now we’re on offense. We want to accelerate our growth through you, our partners.”
- “We want to be a differential leader in a converging technology ecosystem.”
- “We want to make sales calls with you as a partner. You sell your products in your lane, and we sell our services. We all win.”
- “It’s easier to expand your footprint in your customer when there’s new technology to offer them.”
- “Think new services, not new products, that you can rent from us. We believe you need managed services. If we can do that and rent it for you, your business looks a lot smarter.”
- “I don’t believe we can underestimate AI. It means opportunity for everyone in this room.”
Speaking of AI, that was the topic of the breakout “From Concept to Cash Flow: Real-World ROI with Zebra’s AI” led by Zebra CTO Tom Bianculli. He described AI as “a $100 trillion technology supercycle,” encouraging VARs to take AI to the edge, empower frontline workers, and generate recurring revenue:
- “On-device AI combined with cloud-based AI can help a frontline worker perform a task in milliseconds without tokens.” Bianculli showed a demonstration where the process of scanning a label and entering key information into the merchant’s tracking system was reduced from 26 seconds to 0.66 seconds using AI.
- Frontline AI streamlines store operations in ship from store (saves time order picking), backroom picking, online order picking, shelf management (save time per shelf modification), and out-of-stock recognition (prevents lost sales).
- Bianculli’s top three AI outcomes for solution providers were driving higher hardware revenues, growing business services by attaching “lucrative value-add services,” and the ability to optimize and differentiate.
The RSPA Community is providing AI guidance for VARs and ISVs through the RSPA AI Resource Hub. Developed through a collaboration of nearly 40 RSPA members, the AI Resource Hub is designed to help retail IT VARs and ISVs navigate the rapidly evolving world of artificial intelligence.
