Pax8 Makes Case for New Approach to Cloud Distribution

When born-in-the-cloud distributor Pax8 first started talking to partners about what it was doing, it had nothing on its line card. Still, the concept – a cloud distributor designed specifically around cloud services – spoke to channel partners who were fed up with the way traditional distributors’ approached the cloud.

Now, the Denver, Colorado-based distributor recently crossed the 1,300 partner mark, and added 169 partners in March alone. Ryan Walsh, Pax8 SVP of Partner Solutions says the company will grow to 120 employees, from 80 employees, by year-end.

“I think the message is resonating that distribution for the cloud needs to be different, and I think the channel partners are showing us that they are willing to give us a shot and see what that looks like,” Walsh said.  

Part of what that looks like from Walsh’s perspective is a more focused approach than traditional distribution, he says. Pax8 selects vendors that provide a high quality and innovative product, good margins for partners, and can enable instant provisioning, he says. Its vendors include BitTitan, Carbonite, and ProfitBricks.

“If I put my reputation on this I need to know that it works and it works well,” Walsh said. “We don’t sign somebody who says, ‘oh yeah, I go through distribution and you’ll just be another one.’ Some of our vendors didn’t have tier-2 distribution when we signed up with them.”

This approach to vetting vendors has also allowed Pax8 to provide advanced integration with solutions like ConnectiWise and AutoTask, Walsh says.

“Traditional distribution very good at inventory management, processing, financing, but when you look at cloud business you have to look at it from quote to cash. You can’t start in the middle which is when you take the order. You’ve got to be good at going all the way up to how do you market and sell it to a prospect base that is greater in number than most of our partners are used to dealing with,” he said.

With cloud services, once an order is placed, there is an expectation of delivering that service, onboarding, ensuring billing is right, and support is in place, but “anywhere along this continuum you could knock an opportunity out or disappoint a customer if you don’t do those well,” he said.

“We find that the focus on understanding what that means to handle quote to cash cloud business is a big reason folks come to us,” Walsh said.

In moving from a break-fix business, partners often look to Pax8 to help them acquire customers to move from intermittent sales to high transaction and high frequency.

“We’re finding that our channel partners need help selling and marketing cloud business and it’s completely different than how you would do that with on-prem technology,” he said. “While a partner in the past might have used a referral method, in the future you’ve got to automate. It’s this balance between high automation and high touch.”

One of the more recent initiatives to support partners at Pax8 is its Cloud Wingman program, which the company launched in February. The program provides sales and marketing solutions, as well as a dedicated Cloud Solutions Advisor which serves as partners’ own personal Cloud Wingman, according to its website.  Its services could eventually extend to providing white-glove service for partners who need more assistance in selecting targets and how to follow up with prospects, Walsh said.

These approaches require Pax8 to spend more time working with partners upfront, but “we’re finding that our partners need more assistance and we’re big believers in teaching them to fish,” Walsh said.