Over the past few quarters, the acquisition news coming out of Greenville has been quite telling of shifting roles among channel sales and service providers. Here’s some context:
This round of acquisitions underscores unprecedented consolidation in the tech sales and service channel, but the consolidation happening among the acquired and the acquirer companies isn’t the big trend to watch. The more important story for channel sales and service providers is the implication on what you sell, who you sell it to, how you take it to market, and ultimately, how you define yourself.
The rapid expansion of its line card is representative of ScanSource embracing the rapidly-blurring lines between ISO, agent, VAR, MSP, acquirer, and even developer.
For instance, particularly in tier 3 and smaller retail and hospitality markets, VARs have historically operated in a parallel yet complementary universe with ISOs, agents, and acquirers. Any more, it’s hard to assign labels.
VARs have really taken to selling payment services, as EMV drove demand for terminal refreshes and recurring revenue became an attractive opportunity. ISOs have a newfound and concerted interest in selling POS, (or as some traditional VARs might say, “POS” in air quotes), as the vendor community has begun to serve up full-support, low-cost/no-cost as-a-service offerings that have lowered their barrier to entry.
Likewise, MSPs are encroaching all over the retail and hospitality VAR’s traditional stomping grounds. Check out Abby Sorensen’s column Meet The POS Competitors You Didn't Know You Had for more on that. The story features an interview with a couple of NYC-based MSPs who are eating local VARs’ lunches in the very restaurants whose business they stole. Sure, they’re selling POS, but they’re leaving its care and feeding to vendor and ISV partners while they make their money installing the video surveillance, networking, telephony, and security services they’re making their real money on.
The pace of innovation is quickening as the vendor community makes hardware and software more accessible to enterprising sales and service companies—regardless of what they call themselves. The acquisition activity we’re seeing out of ScanSource is simply a reaction that innovation – but it’s a reaction channel players should take advantage of. The easier your distributors make it to expand your line card and add the services someone else is currently selling to your customers, the better for you.