After selling his seven-year-old software company to McAfee in 2009, John Street was – like so many entrepreneurs – looking for a new problem to solve in the IT solution provider space.
He found it in the cloud services market.
“The old line distributors weren’t in tune with how you push software-as-a-service (SaaS) product through the channel,” Street said. “What we really should do is fix distribution for the cloud market.”
That was the impetus for Pax8, a software vendor that aims to capitalize on the cloud revolution by offering a platform that allows MSPs and other tech solution firms to easily order cloud-based IT services from a wide range of vendors and seamlessly deliver them to end users with automated provisioning and billing.
The Denver, Colo., firm launched in June of 2012 and has been active in the market since 2014. The company currently boasts relationships with 11 vendors and more than 1,000 partners.
At the center of the business sits the Pax8 Command Console, described as a cloud commerce console that leverages APIs to integrate about 100 popular cloud services from major providers.
“(With) ProfitBricks, you can define a network and hit provision and it turns it on,” Street explained. “We’re getting a lot of attention (through) ProfitBricks.”
Key to Pax8’s strategy is making it as easy as possible for solution providers and their end-user clients to obtain the services they need on an OPEX basis, avoiding capital expenditures.
“In order to sell into the SMB market, it has to be transactional,” Street said. “Our product enables SMBs to go onto the platform, order quantities of cloud products and make it transactional.”
Another major pain point for MSPs involves the complex nature of cloud billing, which can intimidate solution providers who want to offer cloud services.
“You have to take the processing of that business from quote to cash: Quote, order, provision it and bill it,” Street said. “It gets (especially) complex when you have usage-based pricing.”
“That’s hard to do,” he continued. “That’s what we focus on so that the partners don’t have to worry about that.”
Too many MSPs resort to elaborate spreadsheets in an effort to manage the arcane task of tracking which end users are using what cloud services and for how long, said Ryan Walsh, senior vice president for partner solutions at Pax8.
“It keeps (some of) them from going to the cloud,” he said. “We facilitate all of that for them; we know the customer, we know the quantity, we know when the customer has crossed a price tier.”
The security products, like many of the services available through the Pax8 marketplace, rely on APIs for integration.
“Most of our products have APIs,” Walsh said. “For those that don’t, we automate the data collection that it takes to provision. Pax8 takes on that work.”
As a result, the services available through Pax8 are compatible with a range of popular MSP toolsets, like ConnectWise.
The principals at Pax8 feel the early response to their product shows they’re on the right track. They’ve yet to see another “true distribution play” in the cloud space.
The firms that are dabbling in cloud services marketplaces largely steer customers to their preferred partners, Walsh said.
“It restricts choice,” he said. “We can find best-of-breed vendors. We find that our partners really like that choice.”
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