ScanSource Exec: IoT Solutions Stack Work Continues Because The Technology Could Be 'A Machine That Prints Money'

The Internet of Things has long been on the channel's radar, and to hear ScanSource CTO Greg Dixon tell it, many of the most eye-catching applications for technology integrators remain in the "science project" phase.

However, Dixon believes solution providers are closer than ever to visualizing how IoT can help their customers achieve specific business outcomes. He said the Greenville, S.C.-based distributor is approaching the day when it can arm partners with those capabilities, too, now that master agent Intelisys is in the fold.

"The big piece that comes from our relationship with Intelisys is the connectivity," Dixon told CRN. "We now have all these connectivity companies. We can now make money on every single piece of a solution. IoT is no exception."

[Related: Business-Outcome-Based Model Key To IoT Sales Success For Solution Providers]

Many partners remain skeptical of IoT's potential, Dixon admitted, and those pursuing it find themselves tasked with navigating some complex engineering and development work. There's also the challenge of finding practical IoT applications within target ScanSource verticals (including retail, health care, transportation, manufacturing, and distribution) that can result in straightforward business outcomes such as lowering operations costs or increasing regulatory compliance.

In large hospitals, for instance, IoT allows nurses to track the real-time location of high-value assets such as blood pumps via sensors. That data can then be anonymized across hospital networks and synthesized within an analytics engine, Dixon said, that helps health care providers optimize their bloom pump expenses.

A data analytics partnership remains one of the key missing pieces in ScanSource's IoT quest.

"We need a raw analytics engine partnership," Dixon said. "That's a part of the solutions stack. If we can solve everything else, I'm confident we'll have all of the solutions stack components in place."

Once concrete use cases are established, Dixon said the company would filter its plan into "consumable" pieces and provide partner training via an IoT solutions engineer.

"He'll help you conceive what this is going to take, where to mount the sensor, how to communicate this thing," he said. "With our help, we can start to actually solve business problems and create business outcomes that really do affect [customers]."

As the distributor pushes partners to pursue more recurring revenue streams – an often difficult transition for businesses built around hardware transactions – the company sees an upside: They can build their IoT practices from the ground up and sell solutions straight to line-of-business decision-makers.

"It is patently in the new model," Dixon said. "As you take on this new thing, it builds your monthly recurring revenue stream – we're creating a machine that prints money. If we can set this thing out there, it accelerates and gives you some safety in terms of transitioning your business."

Martin Gil Jr. traveled to ScanSource's Global Partner Conference with his father Martin Sr., general director of Mexico City-based Teica. Although Teica plans to search for brands that already work in IoT as part of its recurring revenue push, Gil Jr. said ScanSource needs to take firmer steps toward IoT integrations that work.

"Everyone talks about IoT, but it's a really long path," he told CRN. "We need to start searching, developing and making sure what we're offering makes sense."

Implementation of IoT in the channel will be slower than technology's champions might like, said Dixon, who thinks ScanSource might be able to capitalize sometime in the next three years. Others have gotten a head start, such as electronic components distributor Arrow, which already had a firm handle on sensors before they were modernized into easily-portable beacons.

But ScanSource CEO Mike Baur said the company is committed to developing relevant IoT solutions for its channel, utilizing existing customers and the expertise partners have already developed in hardware, software, specialty services and, with Intelisys, connectivity.

"Once we get all those pieces in place … all of that becomes part of the Internet of Things. We build a portfolio that allows us to become a true IoT company. That's where we end up," Baur told CRN.