By Julian Lee
There is a new CEO Scott Chasin. A new vision where AI robots may be entering the MSP game and Rob Rae works until he is 90 with his companion bot. Pax8’s President, Nick Heddy said the company is on the right track and hitting targets, backed up by its revenue growth to $2 billion and a 50% growth of this year’s event over last. Ryan Walsh continues to guide the company’s strategy and “dance” academy (see end of article for video).
The transition from distributor to marketplace provider is a challenging process. Channel partners already have many choices to find and buy products. They also have more products to choose from than ever before. Product procurement, fulfillment, and ease of use are all basic must-haves at this point.
So, where is the distributor’s differentiator?
Channel partners require next-level support and tools to elevate their performance, not just products to sell.
I wrote an article several years ago on how the most successful MSPs will be operating their own branded marketplaces while simultaneously promoting themselves on other marketplaces. The best MSPs will look more like a vendor than an MSP. As a matter of fact, several MSPs have already built tools that they are now reselling to other MSPs [Keep following as we make some big announcements on the new road map for building the next generation MSP].
Marketplaces are the new SEO battlegrounds!
Pax8’s announcement regarding its private-label marketplace brings them one step closer.
Why is this so important for the future of MSPs?
It all boils down to maximizing business value and future-proofing. MSPs can only achieve this critical goal if they have very strong control over their customers’ technology stacks as well as the procurement process.
If you’re a consultant or influencer, it probably doesn’t matter who does the transaction, but MSPs do rely on it. They may not make a lot of money from the actual sale of the licenses, but it helps them to maximize their stickiness with every customer.
It is also important for MSPs to leverage third-party organizations (including vendors) who they can trust with their customers’ data!
Vendors often request customer information for legitimate reasons, but it can also serve as a “insurance policy” to retain the client in case the partner leaves.
“You can leave whenever you want, but it will be difficult to take your clients with you”.
Unfortunately, the era of partners buying from distributors, receiving the items, and shipping to their clients without the distributor or vendor ever knowing the client, is long over!
Drop shipments marked the beginning of end-customer anonymity, followed by deal registration and now marketplaces and vendor-direct billing (think Apple’s marketplace where the vendor does not even know the end-customer and on top of that, Apple decides what the vendor makes).
Some vendors (and distributors) play customer “switcheroo” games with channel partners, causing some to lose the deal to a competitor or buy direct from a vendor. This dirty trick is still alive and well, and keep in mind that it’s much easier to accomplish after they have the customer information (especially if they also manage the actual transaction and renewals)!
According to Elizabeth McIlhany, Pax8’s Chief Product Officer, they will be offering their partners a private-label instance of their marketplace, and if they keep to their word, which appears to be the case, MSPs can be somewhat confident that they will remain in the transaction game.
Equally crucial is the MSP’s potential for growth. Land and expand within every customer is the fast track for sales growth. With the Pax8 platform, MSPs can see what their clients purchased and what they may potentially upsell or cross-sell. The only downside is that it only applies to items purchased and sold through Pax8.
Pax8 is also looking to assist MSPs in generating net new clients and expanding into new markets. I believe they do an excellent job of providing them with a wider variety of vendor options as well as some much-needed training and marketing assistance. Both activities are mission critical to fuelling growth.
Overall, Pax8 is doing a lot of good things for their partners to help their businesses move in the right direction, including addressing the elephant in the room: cybersecurity with the funky-dressed genius Matt Lee, CISSP, CCSP, CFR, PNPT.
Distributor marketplaces are still in its early stages and we continue to monitor all. Expect this area to heat up. The ultimate winners will be the MSPs if they choose right! Rob Rae and Ryan Walsh, are entirely channel-focused, so you could count on them to have your back!
Of course there was a lot more to learn from the event and I met up with several vendors and talked about some new announcements so watch for all that coming to www.e-channelnews.com. I also caught up with several MSPs like Mike Pearlstein and John Krikke to get some insights in what’s happening on the front lines! My community of over 100K MSPs is where we find our inspiration and get our marching orders!
Watch for a few podcasts with Caroline Goles and the others I interviewed at the event on eChannelNEWS… (great job John Trent and Kristen Rider Beatty)
And the Pac8 A-team: Urvish Badiani , Allan Weiss , Tania Fortin and others!
All the very best for Pax8 Beyond 2025!
NOTE to vendors: If I missed you, please feel free to reach out to eChannelNEWS. Maybe we can do a news interview?
Anyone from the event is welcome to connect and/or follow me on LinkedIn. Subscribe to stay ahead of the channel game.
