November 20, 2023
The agreement, announced weeks ago, technically establishes Pax8 as a supplier of Sandler Partners. Pax8 is known as a prominent Microsoft cloud distributor and the owner of a fast-growing marketplace containing a variety of software licenses.
Sandler Partners' Mark Phaneuf
“Pax8 offers a cloud marketplace, allowing partners an ease of use and efficiency for selling licenses to their clients. They are one of the leading Microsoft cloud solutions providers in the industry and I’m very excited to partner with Pax8 to see how both companies can continue to grow at an industry-leading pace," said Mark Phaneuf, vice president of East for Sandler Partners. "With Pax8, we have the flexibility to offer hundreds of different additional cloud products as the technology industry evolves to meet our customer’s everchanging and growing demands.”
Phaneuf pointed to a few key software providers, including those in the cybersecurity space, that are new to the TSD. They include Proofpoint and SentinelOne. In addition to providing access to software providers not currently in Sandler Partners' portfolio, Pax8 will provide support for those licenses and bill the end users.
Pax8's Hannah Pryfogle
"Customers are calling Pax8 on Proofpoint support, on Microsoft support, on SentinelOne support," said Hannah Pryfogle, director of channel development at Pax8. "So they're not getting three separate bills from three separate vendors and three different phone numbers to call. It's just that one place. You can see Pax8 as a supplier in the TSD ecosystem, just with thousands of products."
On the other hand, Sandler Partners and its technology advisors expand the reach of Pax8 and its supplier vendors. And Pax8 can bridge the gap for its suppliers in reaching the agent space. The agent model works differently than the traditional resale model, requiring the vendor to provide monthly commissions to the sales partner and managed services and billing for the end user.
"I think a lot of cybersecurity vendors are just not aware of the agent channel. And there are so many that it can be hard to build relationships with all of them," Pryfogle told Channel Futures. "Since Pax8 has such a big presence in the MSP market, we have those relationships in place for agents to have access to them as well."
Pax8 is a known entity among technology advisors, but data from Channel Futures partner surveys show that TAs more commonly hold agreements with TSDs such as Sandler, Telarus, Avant or Intelisys, rather than with Pax8.
Phaneuf said Sandler Partners agents were asking for Pax8. But they wanted Sandler to mediate that relationship, Phaneuf said.
“We already had cooped-up demand for Pax8. Partners of ours had said, 'Hey, we'd like to work with Pax8, but we don't really want to sign a direct agreement. We'd like someone like Sandler who has a legal team and can help negotiate a stronger contract to protect us,'” he said.
Pax8 has built a strong reputation in the MSP community. The has engaged with the agent on some levels – notably making a big splash in 2019 by hiring ex-Intelisys cloud exec Andrew Pryfogle. Signing Sandler Partners represents the first agreement Pax8 is making with a national TSD.
“I think they've come to realize that they want to specialize in what they do best and then partner with Sandler Partners, which has developed a loyal partner community they can access," Phaneuf said.
On the other hand, Pax8 bridges a marketplace gap for Sandler Partners. While northern California-based competitor AppDirect integrates a TSD practice with its own proprietary marketplace, Phaneuf said partnering with a marketplace made more sense for Sandler Partners.
“We thought there were more strategic advantages to partner with a company that's doing it successfully. We want to take advantage of the marketplace, and they want to take advantage of our partner base," he said.
When asked if Pax8 will sign agreements with more TSDs, Hannah Pryfogle said the distributor is taking a measured approach to expanding in the agent channel.
"We still want it to be an elite enough program that we're not launching with a billion different TSDs, but we have goals to partner with the top TSDs in the market," she said.
"This is a great move on both sides. We mentioned that for the first time is 43 years, tech services are now larger than telco services and the moment of convergence is officially behind us," McBain said. "Partners and agents are expanding across the tech/telco stack and distribution is changing along with it. "
Kat Lopez Shelby, co-owner at Shelby Technology Solutions and a agent with Sandler Partners, said the Pax8 agreement enhances the Sandler Partners portfolio.
"Pax8 offers several suppliers that are outside of the channel. Several of the traditional MSPs that work with and network with [Sandler Partners] have recommended Pax8 numerous times because of their offering and the ability to bill direct. These additional suppliers help companies to meet the needs of their clients," Lopez Shelby told Channel Futures.
She and Profit Advisory Group president Barry Bazen agreed that the agreement helps Sandler Partners as it competes against AppDirect for agent business.
"It’s a logical evolution for Sandler. AppDirect got the jump on the other TSD’s, and Sandler decided to join the fray as opposed to letting their agents find these services elsewhere," he said. "I think that the other three will have no choice but to follow suit ... or else."
While marketplaces have dominated headlines in the MSP world in 2023, the technology advisor community has offered more mixed reactions. Many agents say that customers – particularly upmarket businesses – can't and don't want to buy complex technology solutions in a self-service fashion. Others say they expect marketplaces to play a bigger to role in more transactional technology.
"I do not think that 'all services’ (by far) can be serviced over a point/click app, but many can and will be," Bazen told Channel Futures. "Being the first TSD to offer these 'other' services is great, but won’t guarantee success unless the services are both evangelized and accepted by the agent community."
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