Pax8 Preps Partners for the Age of Self-Serve Everything

The distributor’s next-gen marketplace arms MSPs to let clients buy the way they wish to—alone. Plus: Pax8’s first IT management stack and vendor reactions to Pax8’s AI-based opportunity engine.

Gen Z is so done with people.

Gen Zers who buy things are, anyway. “75% of this cohort does not want to talk to a human,” said Canalys analyst Jay McBain during a keynote at Pax8’s second annual Beyond conference in Denver this week. “They’ll go buy a car, which is the second most expensive thing in their life, without talking to a human.”

It’s not just Gen Z either. Rob Rae (pictured), Pax8’s corporate vice president of community and ecosystems, recently purchased a car online for the first time without so much as a test drive. “I wouldn’t even think about doing that pre-pandemic,” he says.

Covid trained most of us, in fact, to buy everything online, and it’s a habit no one’s likely to give up soon. “Even though the pandemic’s over, a lot of us never went back to going to a grocery store,” Rae observes.

Fewer and fewer SMBs want to buy technology the way they used to either. The same people willing to plunk down $50,000 on a new car without visiting a dealer, McBain notes, have no qualms about making a $1 million security purchase on their own too.

Meanwhile, vendors inspired by product-led growth success stories like Slack and Zoom are more than happy to sell those people all the software they want without an MSP or distributor in the loop. Which is a problem in security at least, because million-dollar cyber deals that don’t include partners usually end in tears, according to Marcin Kleczynski, CEO and co-founder of Malwarebytes, a company that works hard to make its business solutions as intuitive as its consumer applications.

“Our product is a great tool, but in the end even though we can make security so easy, you still need some security experience,” he says.

All of which, as we wrote after the first Beyond in 2023, is why Pax8 has poured years of effort and a lot of money into a next-generation online marketplace designed to add so much value that vendors, MSPs, and end users alike wouldn’t think of doing business anywhere else.

Last year at Beyond, the company made bold promises about that marketplace, noted Chief Product Officer Libby Mcllhany during a pre-event press briefing. This year, she continued, “I’m pretty excited to say that we have delivered.”

Indeed, Beyond attendees have had access to the new marketplace since Tuesday, and other Pax8 partners will get their first chance to put the site through its paces on Monday. They’ll encounter everything there from useful features like the ability to juggle multiple ordering carts for multiple clients simultaneously and a reimagined quoting experience to truly strategic ones like the Opportunity Explorer, an AI-powered tool that uses past purchasing data to spot future upsell and cross-sell opportunities.

I want to begin though by discussing the system’s customized storefront functionality, because it’s arguably both Pax8’s most direct response to the way end users increasingly want to buy IT and the feature most likely to attract partner pushback.

Last year, in fact, some MSPs at Beyond told Pax8 that ordering on behalf of clients is part of their full-service support model, while others worried about the chaos likely to ensue when customers set loose on product listings they don’t understand purchase all the wrong things.

To its credit, Pax8 didn’t back down from its hard to dispute conviction that businesses want to buy on their own and MSPs who don’t let them will miss out. Your clients research everything from office equipment to accountants on their own already, Rae observes.

“If we assume that SMB technology is the same and assume that at some point end users will be doing their own research, therefore buying decisions, therefore purchasing without talking to anybody, why not give them the ability to do it through the MSP’s website?”

To make partners more comfortable with that prospect, Pax8 has modified its storefronts based on feedback collected from over 300 marketplace beta testers. MSPs can now create customized catalogs for storefronts limited to products they sell and support, for example. Those who wish to can view and approve self-serve orders before they go to Pax8 for provisioning, or hide pricing on a storefront and drive those orders into their current sales workflow.

They can do all that on a case-by-case basis through multiple sites tailored to specific clients, industries, solution areas, and countries, moreover, and accompany everything they sell with the deployment, training, and management services product-led growth customers need to be successful, whether they know it or not.

Pax8 hopes the whole package coaxes reluctant partners into bowing to the inevitable. “The buyer’s changing, and that buyer wants to do things in a self-service way,” says Ryan Walsh, Pax8’s chief strategy officer. “Maybe your customer base isn’t reflective of that,” he tells MSPs, “but that’s the future.”

Vendors react to Pax8’s AI growth engine

McIlhany, during a keynote presentation, pointed out another benefit for MSPs of selling through the new marketplace.

“Every purchase and subscription change that you or your self-service customers make generates valuable data,” she said.

And more than anything else, it’s data from the over 550,000 SMB end users Pax8 partners support that makes the new marketplace a “game changer” in the words of President and Chief Commerce Officer Nick Heddy (pictured). Together with the distributor’s machine learning technology, he and other executives say, all those sales and usage records will allow the site to pair MSPs with exactly the solutions they need to sell more and make more.

Pax8’s wagering that matchmaking dynamic will excite vendors about the new marketplace too. Not that most vendors need much incentive to buy into the site. Pax8 has over 35,000 partners at present, and a marketplace listing is the only way to reach many of them.

“We talked to a lot of MSPs,” says Connor Swalm, CEO of phishing awareness training startup Phin Security. Most buy from whoever’s on their favorite distributor’s line card and ignore everyone else. “A single pane of glass for billing and whatnot is the biggest concern for them,” Swalm explains.

Other vendors, however, view the marketplace and its built-in AI as potential growth engines. Pat Hurley, vice president and general manager for the Americas at Acronis, for example, notes that the company has struggled to make MSPs aware of everything in its Cyber Protect Cloud suite, which includes modules for BDR, EDR, MDR, and as of this Wednesday (just as we told you here at Channelholic weeks ago) XDR.

“With all these different services available in the platform it’s been challenging for us to break through,” he says. The Opportunity Explorer could very well train an eye-catching spotlight on those cross-sell opportunities.

“We’re optimistic that the marketplace can provide a more complete picture of who we are and what we do,” he says.

Still, most of the vendors I spoke with about the marketplace are best described as hopeful it will boost revenue rather than confident it will. “I do expect it to drive more business for the MSPs,” says Steve Petryschuk, a director and tech evangelist at Auvik. “Will it be additional network management business profit? I think the jury’s out on that one.”

We may be waiting a while for the jury to come back in too. Even Walsh, referencing feedback on the Opportunity Explorer collected during beta testing, concedes that MSPs won’t acclimate to the marketplace’s distinctive design and new capabilities overnight.

“That’s a great example of where they said the interface is powerful, but there’s some time that they need to get used to something so different,” he says.

Where things net out at the end of that process could surprise Pax8, its vendor partners, and everyone else too. The ultimate impact of anything AI-related, in fact, is impossible to predict right now, warned author Malcolm Gladwell during a guest speaker appearance.

“This is an interesting point that I’ve thought about a lot, which is the people inside a technological revolution are usually the last to understand the true implications of their work,” he said. “You have a set of people who are extraordinarily gifted and innovative and who blaze a trail in creating a technological solution, and they think they know what the solution’s going to be used for and they are always wrong.”

Pax8, its partners, and everyone else experimenting with AI will be no exception, Gladwell predicted. “You guys are the front and center in this revolution,” he said. “Trust me, you do not know what it’s for.”

Pax8’s Buy Now button stays in the picture

Eagle-eyed Channelholic readers may have noticed that I just spilled a lot of ink about what the marketplace means for vendors without saying anything about the “Buy Now” button that Pax8 encouraged vendors at last year’s Beyond to put on their website someday (read about seven paragraphs into this for more background). That’s mostly because Pax8 had nothing to say on the topic this week during its onstage demo Tuesday or marketplace press release Wednesday.

So I asked why. TL; DR on the reply: The button’s still coming but turned out to be a more complex undertaking than expected.

“What we found was that there was a whole set of wraparound features that we really needed to have in place in order to make it as valuable as we wanted to make it,” McIlhany says. “We’re actually waiting to fully productionalize it until we have some of those other features built out.”

Specifically, she continues, vendors asked for better ROI data than they originally received. “We were doing some reporting in a more low-budget, human-driven way, but we’d really like to build out really clear analytics and usage information,” McIlhany says.  

MSPs, meanwhile, requested more than just bare bones referral data about Buy Now clickers. “We wanted to make sure that that pairing and that matching also involved nurturing and enabling partners to have a longer conversation with those customers,” McIlhany says.

According to Kleczynski, who looks forward to using the button, there are technical issues to resolve as well. “I’m a big believer of if they want it, let them transact,” he says. “The complications are wiring up the backends to make sure that they can talk to each other.” That engineering work, he continues, is still in progress.

According to McIlhany, Pax8 is piloting a revised version of the button now, and fully intends to release a GA edition eventually. “We are definitely developing it, but we want to wait until it’s really ready for prime time to bring to market,” she says.

Pax8’s first IT management stack

Lost in the hullabaloo surrounding the launch of Pax8’s big-bet marketplace was the addition on Monday of three new vendors to the distributor’s line card. Pax8 represents over 130 vendors at present, so signing three more wouldn’t normally be noteworthy, except that these vendors all make IT management software and Pax8 has never offered IT management software before.

Or it hadn’t prior to last Wednesday, anyway, when Pax8 began offering solutions from Auvik. That’s four new IT management vendors in five days, each of which is the first of its kind in the Pax8 catalog. Not coincidentally, each plays a critical and complementary role in running a managed services practice: SuperOps makes a unified RMM/PSA solution, Kalibr8 makes a SaaS management app, MSP Bots makes RPA software, and Auvik does network management.

“It’s the whole stack,” observes Walsh (pictured).

Given that Pax8 was founded 12 years ago and partners exclusively with MSPs, it’s a little surprising that the first such stack took so long to arrive. According to Walsh, though, building out a robust set of solutions in hot-selling markets like productivity, security, and BDR was more urgent until the rise of giant private equity-backed MSPs turned management automation into a must for smaller practices looking to compete.

“You’ve just got to be more efficient with what you’ve got,” he says.

Though Auvik, Kalibr8, MSP Bots, and SuperOps are each the only vendor of their kind Pax8 sells at present, Walsh suggests they won’t be forever. “We’re going to have the partner community and our own team vet additional options within a category and what makes them different and unique,” he says.

Furthermore, though the four companies haven’t yet woven their products together with each other or the new Pax8 marketplace in any special way, that too seems set to change.

“You can expect deeper integration,” Walsh says.

Which from here in the cheap seats sure looks like a sensible plan. Offering newcomers to managed services in particular a state-of-the-art marketplace full of leading cloud solutions, plus training resources through Pax8 Academy, plus outsourced professional services assistance, and a complete set of pre-integrated tools for launching and running a practice sounds like a pretty compelling value proposition. It’ll be interesting to see if that’s where Pax8 is headed.

SuperOps goes all in

It’ll also be interesting to see how many of Pax8’s current and future management partners invest as deeply in the distributor as SuperOps, which in addition to selling its RMM/PSA platform on the Pax8 marketplace plans to embed that marketplace inside its RMM/PSA platform, probably by later this year.

“Everything will be there at their fingertips, just like everything that’s in there now,” says SuperOps channel chief Juan Fernandez (pictured), “RMM, PSA, documentation, network monitoring, project management, time tracking, and now marketplace.”

SuperOps will also soon offer membership in Pax8 peer groups to its partners along with a fully integrated, white label version of Pax8’s outsourced tier one and two help desk service as an optional add-on.

“This is the first time that they’ve formally announced that they will be doing this with a specific vendor,” Fernandez says.

SuperOps took advantage of the attention its Pax8 announcements brought it this week to unveil a new MSP-specific business intelligence dashboard called Vision X as well.

“Imagine, as an MSP, you know exactly which customer is consuming your technician’s time, or which products or services to sell, to become more profitable,” Fernandez wrote in a blog post this week. “Now, imagine your PSA-RMM tool not just pulling out reports and insights but also pointing you in the right direction, so you can grow your business.”

The idea, he added in a conversation with Channelholic, is to give MSPs answers to questions most don’t know they should be asking.

“We are not business operators,” he says.

Also worth noting

• CEO Michael George told us Syncro would soon add AI-powered ticket management, and now it has. Stay tuned, readers. I’ll have something for you on Syncro’s AI strategy more broadly next week.

• Microsoft’s CSP partners can now transfer NCE license-based subscriptions to each other.

• Geoff Waters is the new CRO at Barracuda Networks.

• At its 2024 re:Inforce conference this week, AWS unveiled malware protection for S3, passkey MFA for root and IAM users, and two new AI certifications.

• SentinelOne shipped serverless container security for AWS users during re:Inforce too.

• Check Point’s new CloudGuard WAF-as-a-Service lets its partners offer clients a fully managed web application firewall.

• KnowBe4 now displays website reputation data from Webroot directly inside its PhishER Plus security awareness training solution.

• IRONSCALES now offers GPT-powered spear phishing simulations to users of its Complete Protect email security solution.

• Cyberinsurer SPECTRA is offering new certification and cyber resilience warranties through Ingram Micro.

• Hyperautomation vendor Pia now has usage-based pricing.

• Granite Telecommunications has a new multi-carrier SIM solution that automatically connects users to the strongest signal from any carrier anywhere in the world.