Pax8: The Strength Of Street Knowledge

Pax8 CEO John Street could have retired off the money he made selling his first two forays into IT – USA.net and MX Logic -- but he saw a problem in how major distributors worked with MSPs.

’The thing that’s counterintuitive in this market -- and this is the groupthink of distribution -- they’re so focused on everybody being margin-sensitive, and people aren’t that margin-sensitive,’ the former Arthur Andersen accountant told CRN. ’What they are is time-sensitive.’

Six years ago, Street set out to change the distribution model.

’I said to Klaus [Dimmler, chief operations officer] ’Nobody is going to be dumb enough to start another distribution business, so we won’t have much competition,’’ Street said.

Pax8 now has 4,000 partners, with 250 to 300 new partners signing up every month. The Greenwood, Colo.based company also has increased revenue 317 percent over the last year. In the last three months it has launched two new products, Pax8 Stax, which organizes and manages all of a customer's software subscriptions, with the ability to add and subtract software licenses at the click of a button; as well as Wingman Professional Services, which helps customers with IT problems that are too advanced, or too time-consuming for their shops.

Those products are designed with one purpose, which is to give hours back to MSPs, Sreet said.

’These guys need time,’ Street said. ’You need to give them time back. So if we can solve their billing issue, which is they’re in spreadsheet hell trying to figure out how to rebill all these services, if we make provisioning really easy, and then give billing back, and then give them lots of marketing ability and assist there, then you’ve got some real value-add. So we launched with that in mind.’

Pax8 partner Bret Meche, who runs Premiere Data Systems in Lafayette, La., said traditional distributors were ’just not set up for my business,’ which demanded the ease of use that Pax8 provided.

’When we were introduced to Pax8, they approached our business in a new way, and it was easy to sign up and get started,’ he said. ’The Pax8 technology that powers our billing and provisioning is fast and accurate. But what we love most of all is their integration with ConnectWise. Pax8’s full integration ensures we can do all or our cloud ordering and purchasing where we do business – in the ConnectWise Manage portal.’

The efficiencies are where partners can carve out a profit, said Nick Heddy, Pax8's senior vice president of sales and marketing. Functions that could take a tech an entire day, such as setting up a new client with a suite of products to cover IT infrastructure, email and security, take minutes with Pax8 Stax.

’With us, if you have your Stax template built out, you can say ’OK, how many employees does this have? OK. Now provision.’ There’s 80 sync tools that allow you to pull in all the user information,’ he said. ’I am now taking what took my tech a morning or a day, and it's done in 15 minutes.’

According to Street, traditional distributors were not helping MSPs develop their business, but instead focused on selling them products. Meche called Pax8 Wingman experience ’the best in the business’ for MSPs who need a partner.

’When I need anything, I just give my Cloud Solutions Advisor a call, and they take care of it,’ he said. ’We’ve seen about five to seven hours per month in time savings with the Pax8 ConnectWise integration because we were able to eliminate manual billing. Pax8’s technology, combined with ConnectWise Manage, ensures automated and accurate invoices for my customers.’

Street said the recipe for their success lies in their platform, which the company updates frequently -- as often as every two weeks -- using feedback from partners, which is delivered to Chief Technology Officer Michael Dehmlow, who then turns that into a solution.

’Where the platform is today is really our secret sauce,’ he said. ’We have a brilliant platform. I’ve got great technical people working on it. And we’re a very agile shop, so we’re able to adapt to the market very, very quickly. … We want everybody to be able to buy product from their native platform, but if you need some product for your clients, just go out and get it. And we want to make that as frictionless as possible.’

Meche said the agility that Street boasts about is not just a sales pitch.

’We have had extensive conversations with the VP of product development about how to better the ConnectWise integration, and they did everything we asked them to do. I have never worked with a company so willing to go above and beyond for my success.’