A $20,000 cash windfall from unrealised Microsoft licences heralded new opportunities to grow, learn and develop with ‘born-in-the-cloud’ US distie.
As more high-profile Australian organisations succumb to devastating cybersecurity breaches, increasingly their managed services providers are in the spotlight.
Attacks on Medibank, Woolworths MyDeal, and Optus affecting up to 15 million people — or one in two Australians — underscored that no one is immune from cyber breaches. Even storied law firm, HWL Ebsworth that provided services to privacy watchdog the Office of the Australian Information Commissioner, was breached and its clients’ private legal matters leaked to the Dark Web.
Australia is a nation of small to mid-sized enterprises (SMEs) — just 0.2% of its 2.57 million businesses employ more than 200 people while 98 per cent turn over less than $10 million a year.
And, while SMEs employ two-thirds of working Australians, cybersecurity specialists tend not to be among them. So SMEs lean on trusted advisers such as Corp IT and their partners to manage risk and fend off attacks.
Corp IT co-owner, solutions architect Jai Dametto, said the Brisbane firm’s customers clamour for cybersecurity. But while protecting customers was a flourishing opportunity, finding talent and staying abreast of global best practices challenged the emerging managed security services provider (MSSP). “Driving internal change and fundamentals in the business is hard; for us as much as for our clients,” said Dametto. “Every facet of what we did has changed but the fruits are being realised now.“And with our focus on security, we're now pushing those certifications through our team to bridge the industry skills gap.”
Pax8 introduction delivered $20,000 Microsoft cloud cash windfall while streamlining costly and inefficient licence management
While reimagining the MSSP’s value offerings two years ago, Corp IT was introduced to Pax8, a ‘born in the cloud’ US distributor that had just landed Down Under. Dametto said Pax8 distinguished itself from homegrown distributors at the start.
“We’d been crying out for years for the capabilities that Pax8 provided. Previously, there was no automation and no integration with our professional services platform, which, for an MSP, is at our core,” said Dametto.
He said what now took three hours once consumed three staff days a month: “We couldn’t process invoices until the 20th, which blew out our cash flow”.
“And all reconciliation was manual. With our previous distie, we couldn’t even charge pro rata and I said, ‘Why not? Microsoft does’.
“So Pax8 was the first distie with the maturity in market to deliver those outcomes for us.”
As a Microsoft Gold Partner, Corp IT’s growth was tied to the software vendor so its newfound ability to recognise partial revenue for customer licences had an immediate and profound benefit. Dametto estimated that Corp IT invoiced an additional $5000 of pro rata accounts in the first month of its Pax8 relationship, adding up to an additional $20,000 a year in previously unrealised revenue.
“We didn't realise that we were missing out on thousands of dollars a month in unpaid licences. That was a cost because the overhead of manually reconciling pro rata was just insane.”
Distribution was broken – How cloud changed the game for Australia’s MSPs and reseller partners
Pax8 was born in the cloud from its founders’ frustration with traditional distribution of their own software as a service, MX Logic (acquired by McAfee), said James Bergl, vice-president of communities and ecosystem for Pax8 Australia.
“Distribution is broken, especially for today’s cloud businesses,” Bergl said. “It’s broken for vendors and partners.”
As Corp IT’s experience showed, streamlining billing and support could make or break MSPs operating on razor-thin margins.
A 2021 Forrester report commissioned by Pax8 found a three-year partnership with the cloud-born distributor delivered its channel partners a 249 per cent return on investment and $US25,000 a year revenue bump from automated billing. Sampled MSPs also benefited from a $US357,000 boost to selling opportunities.
“The process of selling, supporting, provisioning and billing SaaS licences is complex. End users expect expediency and the rare problems to be fixed quickly. And they want to be charged correctly for licences they consumed.
“It’s the same for MSPs because every minute lost administering licences — or waiting for support to respond — drives profit out of the business.”
Bergl said Pax8 recognised that Microsoft Azure is a rapidly growing market for Australia’s SMEs and an incredible opportunity to build a revenue stream, however, technical talent is sparse and MSPs often lack skills and/or time to realise their potential.
“While Pax8 has organically built it’s professional services capability, we recently committed to A/NZ MSPs by acquiring Umbrellar Cloud and it’s 50 Microsoft engineers who specialize in Azure migrations, architecture, design, and cloud security hardening.”
Bergl said Pax8 has transitioned the Umbrellar Cloud team to a “cost-recovery model”, reducing the financial burden associated with digital transformation.
Cybersecurity practice transformation – A ‘white gloves’ service for aspirational MSPs seeking new ways to serve clients
Like many MSSPs, the 20-person Corp IT struggled to access cybersecurity skills.
Dametto said Pax8 supported Corp IT’s cybersecurity practice transformation with a three-day workshop and cloud enablement that sped its embrace of Centre for Internet Security (CIS) Controls v8 that provides “prescriptive, prioritised and simplified best practices” to safeguard computer networks.
“We realised this was a sensible approach that we can deliver against. It aligns to what we need and all the other frameworks such as NIST, PCI, and Essential Eight.
“Security needs to be a dictatorship rather than a suggestion. I can't underline how important that is when you're talking about security.
“So Pax8 was crucial for us to define that path forward.”
Pax8 Academy elevates training for next-generation MSPs with all-you-can-eat learning option and peer support
Beyond enhancing MSPs’ cybersecurity skills, the distie is also upskilling partners’ business knowledge through its Pax8 Academy. Its ‘training as a service’ (TaaS) was founded on a learning management system (LMS) with 400 assets assigned to roles in an IT business, such as organisational leaders, owners, technology development and support, and service delivery.
“Pax8’s instructor-led training empowers employees within our MSP partners to subscribe to a virtual, instructor-led training on a monthly basis,” Bergl said.
“It covers the full spectrum so, as MSPs upskill, they can access professional trainers regardless of their role — every single month.”
Bergl said Pax8’s one-on-one coaching practice would soon be supplemented with peer groups to share lessons learned through the Pax8 partner network.
For Corp IT’s Jai Dametto, the son of a TAFE teacher and reformed chef, TaaS was Pax8’s ‘killer app’ because skills were critical to enduring success.
“Pax8 Academy set the tone for what we were going to do for security as a service,” Dametto said.
“We’ve never had a distie provide their own training to make the industry better.”
Although Dametto has sent a handful of staff to Pax8 Academy, it’s the distributor’s fresh philosophy that was revolutionary in his estimation.
“So a one-time-charge per month to have all your staff do as many courses as they want. It’s a pleasant surprise because Pax8 is aligned to what all MSPs should be looking at — Azure, cybersecurity, modern methods of service provision.
“And Pax8 is touching on what we're investigating — Microsoft’s Power and Dynamics products — so we can grow through the Microsoft ecosystem.
“It’s a big deal. Pax8 Academy is like nothing we’ve seen from a distie before.”
Pax8’s Bergl said the cloud-born distie would continue to innovate and disrupt the Australian IT channel: “Pax8 is truly committed to our partners’ success”.
“We continue to develop the cloud marketplace of the future while fostering a community and ecosystem that delivers higher profits to our partners and prepares them to adapt and thrive in a complex and dynamic sector.”
Are you missing revenue and opportunities in flourishing sectors such as cloud and cybersecurity? Are you losing revenue because your distributor hasn’t kept pace with your business or your staff training isn’t up to date? Find out how Pax8 is redefining distribution in the cloud era.
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