Pax8 Lands Well-Known Channel Leader, Influencer Rob Rae
The former senior VP of business development at Datto has a new title at a new company.
February 1, 2023
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Channel Futures: Can you take us back to last fall and the decision that led to your exit from Datto?
Pax8’s Rob Rae: It was really simple. I had been with the organization for nine-and-a-half years. I watched it grow from its infancy to what it became. We accomplished several things over the course of that time between growing the organization – I was involved in growing it worldwide – and expanding into bigger and bigger markets, watching the managed services areas grow. We went through venture capital, private equity, an IPO and then back private again. In my mind, it was just time to go into something new.
CF: Can you comment on your title? Corporate VP of community and ecosystems? What does that entail? What does that really say about what your role will be?
RR: It is kind of unique. Back then it was pretty simple: You had sales, you had marketing. And then we created this kind of business development piece in between sales and marketing.
Circa 2013, that was still kind of a relatively new concept. At events, you’d have marketing folks coming to sales folks. You didn’t have this dedicated accounting into dedicated community teams. Probably the most difficult challenge over the years is to explain what that actually means. Because it’s immensely difficult to quantify and attach an ROI to it. But I think what’s happened over time is when you look at organizations that are growing, they’re the ones that have invested in this community aspect of it, and this ecosystem part of it. When I’m looking around, even with all of the new job changes happening this time of year, there are a lot more of these titles coming out around community and ecosystem. So in my mind, I look at my skill set, I look at what I can contribute to organizations. And it comes back to that relationship with the channel. This channel has such a relationship part to it, a community aspect to it, the feeling like we’re one entity growing together. It’s something that is being invested in these days. And I think that’s where you’re seeing with these positions or titles.
CF: Datto is a fast-growing company focused on MSPs. Can you talk about some of the parallels between it and Pax8?
RR: When I look at what Pax8 is doing, aside from the revenue generation, it feels a lot like Datto circa 2016-17, which for me, personally and professionally, was probably the most fun I’ve had in my career. This is a phenomenal time to be a part of an organization that is past the startup phase, past the initial investment phase and now in hypergrowth. My role at Pax8 is to help them continue to foster that relationship with the communities. The other aspect of my career that I enjoyed significantly was the vendor relationships that were built in. And you know, every day there are new vendors coming into the space, and just being able to foster those relationships, meet new people — that’s an exciting part about all this.
CF: What’s your take on the state of the MSP right now, as we’re stepping into some economic turmoil this year? What’s the opportunity for the MSP?
RR: It’s funny when you look at the negative press that’s going on around technology companies concerning layoffs and those kinds of things. A lot of them aren’t really technology companies. [Our industry] tends to get lumped in with a lot of the apps – the Ubers and the Twitters – whereas, when you look at the MSP space specifically, I’ve always talked about the MSP space being the SMB, the channel doing our own thing. A lot of times the economic climate didn’t have necessarily the same impact on our channel as it would others. What we went through in 2008 was tough. We saw a lot of SMB end users consolidating and going out of business. That, of course, had an effect on the MSP channel, which of course had an effect on the vendor channel. I’m just not seeing that here. When I talk to MSPs – and I talk to thousands of them – everybody’s still growing.
Over the past couple of months I was doing some consulting for some venture capital and private equity companies still looking to invest money in this space. So it doesn’t feel the same. It doesn’t look the same. It doesn’t seem to be any type of retraction at all. And if anything, these are the times where if we’re not seeing retraction, then hyper investment is probably the right way to go about this. I think that’s kind of where we are.
CF: Can you give us an idea of what the Pax8 organization looks like now and how you think it will evolve with you in a leadership position?
RR: This is a brand-new role for Pax8. I’m not replacing anyone. I’m not coming in and taking anybody’s job away from them. I’ll just be leveraging a lot of my experience over the 25 years of doing this and bringing it to the organization, helping it mature faster, grow faster — those kinds of things. And then we’ll see where it goes. Pax8 has a really strong marketing team. They’ve got a really strong sales organization. They’ve got a really strong events team. Again, I’m just coming in here and helping take all of those different pieces to the next level, to take some pressure off, deliver some content, some thought leadership, some direction.
CF: You obviously knew the Datto channel very well. And I’m sure you had a good sense of what the Pax8 channel looks like, right? I’m kind of curious as to the overlap between the two communities. Do you think there are a lot of Datto partners that have worked with you that might not be working with Pax8, but would say, “Hey, if Rob’s going there, it’s probably worth a look”? What’s your sense of the potential overlap?
RR: I haven’t looked at the crossover, but I know they’re playing in some markets that are super interesting. So I think it’s more of understanding the MSP space, understanding the profile of an MSP and how they work, how they can grow,and then just focusing more on that. There is more of a services piece of it, which for me is relatively exciting, because it expands the conversation beyond, “here’s a product that you use or do not use” or “here’s a competitor that you use or don’t use.”
CF: Can you expand on the services side a bit? It’s potentially an area where partners want more information.
RR: You can see these moments where things are evolving, from the way technologies have shifted to the way we generate revenue. A few of these moments are happening right now. I think the 2008 recession, for example, accelerated the MSP business model even more, which I think is why you see the U.S. market leading that, specifically because the recession was harder here than I feel like it was in other markets. But when you look at security talk out there, a lot of talk about co-managed and moving upmarket. it’s almost like a step back into a resell mode, but resell with services and contracts.
We’re seeing a lot of those things starting to happen right now, just because of the state of technology, with security being more important and more dangerous threats than ever before. Large organizations not getting the same level of service or knowledge than in-house IT teams are. And when you look at an organization like Pax8, and just look at some of the more recent acquisitions — I’ll use Sea-Level Operations, as an example. They have a whole services arm of consultants. It’s not about product; it’s not about what’s in your stack. It’s more about how you build your stack, how you’re taking into market, pricing, and appropriately, all the things that MSPs tend to struggle with. One of the things that I really enjoyed when I was getting to know Pax8 through this process was that they’ve isolated and really narrowed in on weaknesses of MSPs. And it’s not the product, it’s not the technical knowledge. It’s how to bring all these things to market properly and continue to be relevant, to make money with it. And I think, again, expanding on the previous thought, that’s where we can leverage a lot of tools that they already have in place. It’s just now about getting out there and talking about it, and getting some examples of it.
CF: Pax8 has a reputation for fast growth. It’s certainly a dynamic company in that regard. But are there things that you could take from the Datto playbook in terms of accelerating partner growth that you think might be applicable here?
RR: I don’t think it’s necessarily a Datto playbook, specifically, as opposed to the MSP playbook. I’m looking to leverage things based on the maturity level of the market that we’re actually going after. And I think it’s coming at it from different angles as well, versus just the specific products that are in the portfolio. So I do see it as a little bit different. And I do see it as something that’s a little more expansive. I think another thing Pax8 does really, really well that we as a channel probably aren’t aware of is security. They have a whole bunch of security services that they’re offering. And there’s the whole idea of expanded training, education, peer groups, those types of things. I don’t want to say they are underutilized, but definitely under advertised. As word gets out more, they’re only going to benefit the MSP channel.
CF: Executives at different stages of their career go to work for other firms – build, leave, go off and do other things – and it gives them a moment to reflect on what they want to do. You left Datto after a stellar ride, and you had a little bit of an intermission before announcing the Pax8 position. Can you take us through some of your thoughts on that process? Is there anything that might help execs in similar positions?
RR: It’s funny you say that, because there was a rumor out there that I was actually retiring and opening up a chicken restaurant.
I’m like every other human being; I’m averse to change. However, I’ve also learned in my career that the longer you stand still, the slower your growth becomes. So for me, I compare it to when you buy your first house. You loved it, it was a memorable moment. But as much as you love it, you wish it had another bedroom, a finished basement, whatever the case may be. And I think in job hunting through this, I kind of did that same thing. I loved my time with Datto. It was a spectacular time for me and the people that I engaged with and all the people that I got an opportunity and privilege to work with. But then you tick off all the things that you love about it. And then you also tick off the things that are potentially missing, or that you want in that next career step. Taking some time, I was able to step back and look at all the things that I wanted that were potentially missing, or all the things that I wanted in, in a new job.
I made that list, and then just tried to find the best fits for each of those different things I wanted for myself. It’s not just a paycheck. It’s not just equity. It’s about things like the relationship like the community, the ecosystem, culture, workplace, executive team.
CF: Anything you’d like to add?
RR: I’m excited. I’m excited to be a part of this team. I’ve done a lot of homework; I took my time. I’ve made the right decision here. I’m just really excited about what we can do with this and where we can continue to rapidly scale the growth here.
CF: Anything you’d like to add?
RR: I’m excited. I’m excited to be a part of this team. I’ve done a lot of homework; I took my time. I’ve made the right decision here. I’m just really excited about what we can do with this and where we can continue to rapidly scale the growth here.
By Craig Galbraith and Bob DeMarzo
The industry’s worst-kept secret is finally out. Rob Rae, longtime channel leader at Datto, has some new digs.
Rae is joining cloud and services distributor Pax8 to head up community and partner ecosystems. It’s a move the company hopes will bring more MSPs into its fold given the strong following Rae created at Datto.
Rae arrived at Datto in 2013 to help build the backup provider’s channel in its pre-IPO days. His move to Pax8 is reminiscent of Datto’s pre-IPO hypergrowth in the mid-2010s. Will lightning strike twice?
Channel Futures first reported Rae’s plans to leave Datto as the company’s $6.2 billion takeover by Kaseya neared the finish line. At Pax8, he will have the freedom to work with partners and vendors as the company works out a corporate structure. He initially will have no direct reports, but expects that to change.
Rae is on the job now and reports to chief commerce officer Nick Heddy.
“Rob is a well-respected IT channel veteran and considered by many the most influential person in our partner ecosystem,” said Heddy. “He has dedicated his career to enabling the IT channel to grow, get efficient and build thriving businesses. We are excited to welcome Rob to the team, where we believe he will bring tremendous value to our partners, people and the industry.”
Rae’s employment status has been a hot industry topic for months. Even as some other top executives left or were shown the door when Kaseya announced the purchase of Datto last April, he stayed. Kaseya even made it a point to say Rae was sticking around. But he quietly left last fall just a couple of months after the acquisition was final.
Rae’s Background
In all, Rae has more than 25 years of experience in technology and business. At Datto, he not only was instrumental in the company’s partner growth, but also was a de facto spokesman for the MSP industry, tirelessly traveling as an ambassador for the sector. Furthermore, he played a key role in Datto’s process of becoming a public company and then going private again.
Moreover, Rae helped build Datto’s channel into one of the most vibrant indirect selling communities. He now jumps to what many consider the most compelling story in cloud distribution. Like Datto when Rae joined, Pax8 is a pre-IPO, private equity-backed firm. Many industry insiders believe Pax8 could go public soon if the IPO market rebounds in 2023; that, or sell to a larger entity in tech distribution.
“I have spent my career helping partners transform into modern MSPs, and in this new role, I will be able to leverage my experience across the entire technology stack,” said Rae. “I look forward to diving in, supporting global teams and continuing the great momentum for Pax8 and the IT channel industry.”
We caught up with Rae this week. The following Q&A has been edited for length and clarity.
Channel Futures: Why Pax8? Why now? Can you articulate your feelings about the organization, and why you made the move?
Rob Rae: After leaving Datto last October, I was looking for something new. There were some very specific criteria I was looking for. I wanted a company that was not only MSP-friendly, but was actually helping the actual MSP channel grow and investing in it quite significantly. There are a lot of organizations that were doing that, but by far, when you look Pax8 up and down — its commitment to the channel, the commitment to managed services, the reputation that they’ve been able to develop — has been significant. So it was definitely one of the front-runners right from the start.
See our slideshow above for the rest of Channel Futures’ Q&A with Rob Rae.
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