New Intelisys President Makes Big Plans, Bullish for TSD's Future

A month into his new job as president of Intelisys, Ken Mills is envisioning the advisor model of the next three decades.

The ScanSource-owned tech services distributor (TSD) announced Mills' hiring on July 2. He filled a president position that ScanSource CEO Mike Baur had been handling in an interim manner for the better part of a year. Mills, who came over to Intelisys after serving as CEO of Epic iO, said he has quickly jumped into the business and is building plans for adding new investments and focuses at the company.

Intelisys' Ken Mills

"It has been fast and furious. Lots of decisions. Lots of stuff happening. Lots of engaging with partners, suppliers and the teams," Mills told Channel Futures. "We are digging deep into what this business looks 30 years from now. How do we create a sustainable opportunity for this advisor channel for the next 30 years?"

As a TSD, Intelisys provides supplier agreements, sales engineering support, back office resources and other resources to technology advisor partners (known by many suppliers as agents). It drives $2.68 billion in annualized billings for its supplier partners, making it one of the largest – if not the largest – TSD in the channel.

After several key executives left Intelisys in 2023, Intelisys has reloaded its executive team in a big way. In addition to tapping Mills, Intelisys has added a central sales leader and chief marketing officer and made key promotions. Most recently, the company announced on Thursday that Patrick Chen has moved to vice president of advanced technologies, up from director of regional engineering.

Related:Intelisys Appoints Epic iO, Dell, Cisco Vet as New President

Operationally, Mills said Intelisys "will refocus on business value" in the coming year.

"I don't want to say that Intelisys wasn't focused on business value. Of course it was. But I have a maniacal focus on business value," Mills said. "So our supplier service organization, our commission organization, our sales organization, our solutions architect organization, our orders organization and partner support organization — all of us are looking at very closely to see, are we set up for success? Are we bringing the right value? And where else can we bring more value?

Several initiatives and goals emerged in Mills' interview with Channel Futures.

Partner Segmentation

Advisors (agents) have grown increasingly diverse in their business makeup over the last 10 years. Notably, many agencies have evolved from only one or two employees to dozens of people. Some have built their own back offices and hired their own sales engineers — resources that TSDs provide. Some businesses have received backing from private equity firms tjat are managing hundreds of millions of dollars in customer spend. In the meantime, those small agencies remain very much in the business and may require a wider swath of resources from the TSD.

Related:ScanSource Investors Get the Skinny on New Agency Business

Mills wants to more programmatically recognize those differences. He said he wants to build business-value programs focused on the different partner profiles.

"From the big partners with lots of internal support to the small partners that need more support on a daily basis from us as a TSD, to others that may be in the middle, we're going to tailor our business value set of services we bring more directly to those different segments," he said.

For example, a smaller partner may request full-on marketing support, while larger partners might not need anything more than co-marketing help at an event and may simply focus on the transactions the conduct through Intelisys.

"We are going to tailor what that looks like based on these partner segments. I think we've too often looked at partner as a partner as a partner. It's more nuanced than that," Mills said.

Emphasizing the Financial Resources

Regardless of partner size or capability, advisors rely on TSDs to take on legal and economic risk on their behalf. Mills said Intelisys won't shy away from talking about ScanSource's cash flow allows Intelisys to function as a sort of bank for partners.

"We're not FDIC-insured in a traditional bank way, but we very often lend money, more so than in any other TSD that I'm aware of, to our partners to help them grow their business and help them through challenging times," he said.

Mills said at times Intelisys has advanced commissions payments to the advisor when suppliers were delayed in paying or were in a dispute with the advisor.

"We're taking that risk if that payment doesn't occur. Those are things that we do to use the balance sheet that we have as part of ScanSource in the best interest and opportunity for our partners. That's a huge advantage," he said.

Advanced Technology

Patrick Chen's appointment as vice president of advanced technologies represents Intelisys' ambitions to further the advisory model's journey into new markets.

While the TSD and TA space has the reputation of coming from telecommunication, Mills said these companies have widened their capabilities to consult on technologies that span from telecom to IT. And irrespective of the type of technology, businesses will always need advisors who can help them make the best purchasing decision, he said.

But that means TSDs must scope out and sign emerging vendors that advisors can bring to end users.

"If we had this conversation two years ago, we would not have said LLMs would have any impact on this market. We could have tangentially said, 'Hey, AI is going to have an impact.' But we would not have said large language models in 18 months would just be disrupting markets in entirety," Mills said. "So what is the next thing that happens two years from now that we didn't think about? Where will robotics come into play? Where do other AI solutions come to play? How do LLMs really become more than a chatbot and clickbait? There's always going to be something around the corner that the advisor community can provide value for."

Finding Balance with Suppliers

Channel Futures asked Mills, who previously led one of Intelisys' suppliers in Epic iO, about what it has been like to experience contract negotiation from the TSD side of the table.

Mills said he as a supplier wanted to form equitable agreements that "motivated" partners to sell.

"I think the short-sighted suppliers try to grab all of the contractual value for themselves. Therefore they actually take all the business value opportunity away, because it's not in the TSDs or the partners' best interest to work with that supplier because there's too much risk, and the balance of risk-reward is too weighted one way," he said.

He said that in challenging or uncertain economic eras – this one included – some suppliers in the TSD portfolio may start to doubt their investments.

"You start to get suppliers that that can make knee-jerk decisions around, 'I can cut costs by not just paying this channel.' I think we're in that that kind of wave where there's pressure on the channel because [suppliers] think it could be expensive. And then all of a sudden, you know, that wave kind of turns and then you want to get back to growth," Mills said.

Mills said he believes that "ebb and flow" may smoothen in the coming years, bringing more consistency in vendor-partner relations.

"I think that the smart suppliers are going to see the long-term value of investing in the advisory channel is one of their core routes to market, and I think you'll see less of that bumpiness from the suppliers that have a longer term view," he said.

An Intelisys Perspective on NewCo

Partners continue to ask Mills about ScanSource's March announcement that it would form its own advisor company. Mills reiterated that NewCo will be a subsidiary of ScanSource rather than Intelisys.

"I'm not running NewCo. I don't get paid on NewCo. My compensation is not tied to the success of NewCo," he said. "As far as I'm concerned, they're an advisor like any other."

He said ScanSource in its ownership of commissions platform RPM has drawn the proper lines of privacy between data associated with other TSDs.

"I would be shocked if you can find one TSD or partner that has said we have misused the data of RPM in those years. At some point, we've got to get some credit for being a sincere, ethical company. And we intend to do that exact same thing with with NewCo. In fact, we've removed access from people that had access to information that they should not have if they're going to work with NewCo. So they no longer have any more access to data than they would as an individual partner," he said.

Encouraging Community Ownership

Mills said he's encouraging members of the channel to share in the conversation about the future of the space. And that means thinking years and years out.

The trend of rising commissions-pass through – in which TSDs give up more and more revenue to the agent in order to win the deal – is a topic in particular where Mills said partners need to think about the big picture. If the TSDs' margins on deals shrink to the point where their fee resembles that of credit card processing, that changes the level of service they can provide to partners, Mills said. Moreover, it can lead to a "much less stable channel" across the board.

"I don't want in five years to say, 'That was a great run.' I want in five years to be thinking about the next five years," he said. "And if the channel as a whole does not take some ownership about the next 30 years, we'll be having conversations and beers about what a great ride that was. And that is not where we want to be."