Partners say tech services distributor Intelisys has regained stability with a re-focused partner engagement model and a new route to market.
After facing executive turnover and competitive pressures in 2023 and 2024, the ScanSource-owned TSD forged a new identity this year. The company firmed up relationships with loyal, high-growth technology advisors and is using its new SaaS marketplace as an on-ramp for non-traditional sales partners.
"They're highly focused on using their go-to-market strategy to attract new partners who want to just transact via a marketplace, and then continuing to have their traditional TAs transact via the normal channel route," Onward Communications President Tricia Ward told Channel Dive.
Intelisys' performance over the last two years reflects the competitive nature of the TSD market.
Acquired by publicly traded distributor ScanSource in 2016, Intelisys is the only TSD to share its financial numbers and is subject to more scrutiny than its privately held rivals. In August, ScanSource reported 1.3% net sales growth for Intelisys in fiscal year Q4 ended June 30, a fall-off from mid- to high single-digit growth in previous quarters.
The sales slump reflected a challenging 2024, according to ScanSource Chairman and CEO Mike Baur. Customer bookings in Intelisys' agency model often take months to turn into a monthly commission stream, he said.
Finding stability
Intelisys had other issues leading into 2025.
The company was without a president from August 2023 until July 2024, when it appointed Ken Mills. It also needed to replace executives and staff that rival TSDs had hired away in 2023 and 2024.
Intelisys also faced competitive pressures, as other TSDs lured TAs with higher commission splits, driving Intelisys to shrink its margins.
Mass consolidation among TAs also took a toll. Dozens of Intelisys' largest partners agreed to deals with private equity-backed roll-ups, which further reduced margins.
"This was what private equity does: compress their cost by renegotiating with their trading partners, like a tariff," Baur said in March.
Intelisys made multiple moves to combat share shift and margin compression. The company launched an advisory business to acquire and retain retiring ScanSource agency partners.
Intelisys is also focusing on partners that are growing.
"There are partners that have achieved platinum and higher that aren't necessarily growing anymore. They're kind of running off their existing business. While [Mills and SVP of Sales Eddie Acosta] appreciate that and never want to get rid of those partners, they do want to focus more on people who are continuing to grow and that are aggressive and are trying to continue to build the business," ClearSync Solutions CEO Richard Rodriguez said.
Ward said the Intelisys team has accepted partner M&A as a fact of life.
"They realized that it's going to happen regardless of what they do," she said. "I think they're on more stable footing, and I think that has enabled them to have more of a focus on their strategy and less on the noise."
Unlocking hardware and software
ScanSource still needs to crack the code on enabling hardware sales for its agent base.
The company's Specialty Technology Solutions segment, which represents its traditional hardware resale business, declined 7.1% in its latest fiscal year. Baur said ScanSource could get a hardware boost through equipping Intelisys agents to sell it.
The company acquired Intelisys with the stated goal of driving more multi-product deals that combine hardware, cloud and carrier offerings. Some of ScanSource's long-time value added reseller partners have embraced the Intelisys mode, but converting Intelisys TAs to selling ScanSource hardware has been harder.
TAs selling hardware may depend on ScanSource convincing OEMs to count the distributor's certifications on behalf of the TAs. Baur told Channel Dive in November that the company is asking for the exemption. Ward said it's something she and her agent peers have been requesting for years.
"We still can't effectively as a TA sell Cisco or Fortinet because we still have that same barrier. We're not certified. The people who partner with VARs are already doing that," Ward said.
Intelisys in the last year has unlocked opportunities in SaaS by launching a marketplace. Ward said the marketplace has allowed Intelisys to recruit vendors and sales partners that don't want to adopt the agency model. The marketplace has become a differentiator for Intelisys' sales teams, Ward said.
"I think the focus on a marketplace and being able to curate suppliers in that marketplace is a positive step," she said. "If you look at AppDirect and what they've done with their marketplace, I think there's tremendous potential in there for Intelisys."
