Pax8, Partners Are Feasting After Early Pandemic Cash Fears Turned Into ‘Big Fat Nothing Burger,’ CEO Says

“When the pandemic hit, our clientele is largely small business, and I personally thought we may have a lot of defaults, we may have a lot of cancels. I wanted to make sure that we had the financial resources to weather the storm, and the storm turned out to be a big fat nothing burger,” Pax 8 CEO John Street tells CRN

Pax8 grew 90 percent in 2020, as the shift to work from home saw a massive spike in cloud adoption that now appears custom-made for a born-in-the-cloud distributor.

“We‘re going to have about 90 percent growth this year, and we’re disappointed,” Pax8 CEO John Street told CRN. “We expect to more than double again next year. The only reason we didn’t hit 100 percent growth this year is because we literally took our foot off the gas. The only reason we slowed down is because when the pandemic hit, our clientele is largely small business, and I personally thought we may have a lot of defaults, we may have a lot of cancels. I wanted to make sure that we had the financial resources to weather the storm, and the storm turned out to be a big fat nothing burger.”

MSPs who have adopted in the Wingman experience said they have also experienced growth that they attribute directly to the Greenwood Village, Colo.-based distributor.

“We grow faster because we’re a Pax8 partner,” said Zac Paulson, CEO of True IT in West Fargo, N.D. “We’re seeing growth in a couple different places. We’re seeing it in security. They have the right vendors. They have all the buckets covered. And they’re just easy to work with. That consumption model that they have set up for distribution, I’ve been out of the other distributors for a number of years now, because Pax8 makes it very easy.”

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Paulson said his Pax 8 account manager has helped to drive the growth as well. Since the usual conferences have moved online, he said his view into the hottest products is limited.

“Now that we‘re not going to those, our account managers stepped up and really just said, ‘Hey here’s what’s new. Here’s what’s trending. Here’s why it’s trending. Do you think this is a fit for you guys?’ I feel like that level of proactive engagement is probably what’s causing us to grow better with Pax8.”

Street told CRN that the company expected to add 250 jobs this year and experience 100 percent growth. Instead the company added 191 jobs and experienced 90 percent growth.

“The key to all of this is simplifying the journey for the MSP,” Street said. “I want to emphasize that because one of the real opportunities we always saw with the distribution market was everybody was talking about profitability for the MSP. And the prime driver of profitability is if you make their journey really easy, they can put on more clients. Do more with less. That’s really been our mantra all along, to keep making it easier and easier.”

At the outset of the pandemic, Street said there was concern that the wave of small business closings, and the massive economic hit to restaurants, and hospitality could hurt the bottom line.

“In the March, April, May time frame we kind of took our foot a little off the gas to make sure we weren‘t going to have a lot of pathology from the virus itself,” Street said. “We were very pleasantly surprised that not only were we not seeing defaults and cancels go up, but we’re actually seeing even quicker adoption of products. So we committed and we have invested in adding staff. So we’re seeing lots of good tailwinds. “

Small and medium-sized businesses that represented the core of Pax8 customers managed to buck the trends that saw other businesses of their size close down.

“We didn‘t have a lot of restaurants and leisure-travel-type clients,” Street said. “In fact, a lot of clients were more progressive businesses that were already doing stuff in the cloud. We’ve been keeping our ears close to the ground with all of our MSPs, and our feedback among the partners that are most active is that their businesses are growing too through all this.”

Dustin Bolander, chief information officer at Clear Guidance Partners, an MSP based in Austin, Texas, said in addition to making the billing and provisioning much easier than legacy distribution, he said Pax8 helps partners steer through the maze of Microsoft’s rebate programs.

“I‘ve never had luck with Microsoft’s rebate program,” he said. “I had honestly pretty much given up, and Pax8 was really pushing me to use it again. Going back to my previous distributor, I can’t remember ever getting a payout from Microsoft on any of the add-on programs. The Pax8 guys really pushed me, they’re like, ‘This is money on the table. You get these rebates for X, Y and Z happening’ They coached me all the way through getting set up and then helped me resolve it.”

Daniel Johnson, CEO at machineLOGIC, an MSP in Englewood, Colo. said Pax8’s deep partner engagement, and the community of MSPs that go along with that has given him co-managed opportunities with other solutions providers and raised his Microsoft partner status from silver to gold.

“In general, working closely with a fast-moving organization, it helps you pick up momentum,” he said. “Pax8 created such an open community for people to exchange ideas and best practices that it really helps the MSP community grow at a much higher rate. So absolutely we attribute some of our growth to the Pax8 equation.”