Vendor lineage
ScanSource
Distributed products that were on their way to becoming commodities, and tried to arrive first.
Mike Baur and Steve Owings founded ScanSource in Greenville, South Carolina in December 1992, to distribute barcode and point-of-sale equipment. Most accounts name the two of them; one describes six founders with Baur as the architect, and both are recorded here. It listed in 1994, raising $5.5M.
**The founding thesis is the part worth keeping, because it is a real strategy rather than a description.** Baur's stated aim was to be a distributor of *transitional* products, and he named the two transitions he was hunting: proprietary moving to open, and high-cost moving to low-cost. The idea was to find products heading for commodity status and get there early - while a specialist channel still needed explaining to, and before the broadline distributors arrived to sell them on price.
**And the arbitrage underneath it is the clearest illustration of what a distributor sells.** The number of barcode-focused resellers was in the hundreds. The number of computer-focused resellers was in the hundreds of thousands. What ScanSource offered the barcode manufacturers was not warehousing; it was access to a channel three orders of magnitude larger than the one they already knew about. That is the distributor's product, stated as plainly as it ever gets.
The channel-only policy followed from the same logic: no direct sales to end customers, ever. A distributor that sells directly is competing with the resellers it depends on, and resellers can count. Holding that line is what makes the rest of the arrangement work.
The portfolio widened the way these businesses do - Catalyst Telecom for business telephony, later communications, physical security, and eventually cloud and payments through acquisitions including Imago, POS Portal and intY. It is a Fortune 1000 company today, around $3B, with roughly 2,100 staff **in North America and Brazil** - Brazil being unusual enough in a US distributor's footprint to be worth noticing.
**Set beside Westcon-Comstor, the two make a useful pair.** Both are specialist distributors rather than broadline ones, and both grew by being the people who could explain a category. But they specialised in different directions: Westcon went deep on networking and security, Comstor specifically on Cisco, while ScanSource went deep on the things that read and print - scanners, terminals, printers - and then followed its resellers outward into telephony and security. Neither tried to carry everything, which is precisely what distinguishes them from Ingram Micro and Tech Data, the broadline houses whose arrival in a category is the signal that it has finished transitioning.
1993 Alpha Data Systems
A ten-year-old company in Marietta, Georgia, bought in May 1993 - months after ScanSource itself was founded.
Early scale in the AIDC business, and the first of a long line of tuck-in acquisitions.
2011 CDC Brasil
Then the largest value-added distributor of commercial automation in the region. ScanSource's entry into Brazil.
The first half of a Latin American business assembled by purchase rather than built.
2015 Network1 (Intersmart) R$156,928,000 plus EBITA-linked earn-outs over four years
A leading Brazilian value-added distributor founded in 2004, operating across Brazil, Mexico, Colombia, Chile and Peru with ~400 staff, 8,000 customers and 60+ vendors. Announced 15 August 2014, completed January 2015 - the largest acquisition ScanSource had made to that point.
Network1-ScanSource, and ScanSource's Latin American communications business.
Bought THROUGH CDC Brasil, the subsidiary acquired in 2011 - so one acquisition was the vehicle for the next.
- Channel Futures interview with Mike Baur: the transitional-products thesis - proprietary to open, high-cost to low-cost, 'catch them early' - the 1994 IPO raising $5.5M, and the arbitrage between hundreds of barcode VARs and hundreds of thousands of computer-focused VARs
- Company Histories: formed at the end of 1992 to serve POS and AutoID resellers; the May 1993 purchase of Alpha Data Systems of Marietta, Georgia; Catalyst Telecom and the move into telephony
- Encyclopedia.com: the AutoID and POS product range, and Ingram Micro and Tech Data moving into the POS arena as broadline competitors
- Greenville Business Magazine: Baur as co-founder in 1992, president from inception to 2000 then chief executive, and the company at roughly $3B with 2,100 employees in North America and Brazil
- PortersFiveForce: founding on 18 December 1992 in Greenville by Baur and Owings, the channel-only policy with no direct sales to end customers, and the Imago, POS Portal and intY acquisitions between 2014 and 2019
Secondary summary. Used for the specific founding date, the channel-only policy and the acquisition list; the founder count here agrees with the majority account.
- MatrixBCG: an alternative account describing six founders led by Baur, and the value-added distribution model built on technical services, training and financing rather than competing with resellers
Minority account on the founder count, recorded because it differs from the majority rather than because it is preferred.