Further down the channel, an analysis by Forrester on behalf of marketplace provider Pax8 found that the marketplace model benefits partner MSPs by simplifying billing and support and improving selling opportunities. Forrester composite organization, built from interviews of nine current partners with experience building, selling and scaling through the Pax8 marketplace and platform, experienced “a total present value of profits and cost savings of $832,082 over three years versus investments and overhead expenses of $238,675, adding up to a net present value (NPV) of $593,407 and an ROI of 249 percent. For starters, Pax8 marketplace partner were able to move away from outdated, manual billing processes and simplify billing by leveraging a single platform and automation features. Outside of the Pax8 marketplace, the interviewees utilized spreadsheets from distributors and direct vendors for client billing, said Forrester researchers. Using spreadsheets meant that it took account managers two full days each month to bill for most cloud services, and these processes could consume as much as two weeks when billing for cloud platform usage. “Account managers saved as much as 55 percent of their time, which was previously spent managing billing,” said Forrester analysts. Manual methods are also susceptible to human error and make it difficult to audit and unify billing practices. “A billing error in any one month could wipe out the margin available for an MSP,” warned Forrester. With the marketplace’s billing integrations, manual processes became digitized, automated and consolidated. “Account managers could now capture changes in licensing costs or tiers in an automated way, creating efficiencies. It also helped organizations to consolidate account billing for customers across all services managed via Pax8,” said Forrester in its total economic impact analysis. The platform also allowed some organizations to capture revenues of as much as $1,500 a month that previously went unbilled due to missed account updates caused by disorganized, spreadsheet-based processes. All told, the improved account billing efficiency generated benefits of $177,000 over three years for the composite partner sales organization. The interviewed Pax8 partners also shared savings related to support costs, both for direct client support and for getting support from Pax8, as compared with previous distributors, show the impact analysis. “The MSPs noted that user onboardings and cloud product provisioning were significantly more efficient for their technicians when using Pax8, and ticketing was also easier,” continued the report. Indeed, the automation of technicians’ work in ticket creation led to a 15 percent increase in their efficiency. Along with improving technician productivity related to ticket creation, Pax8 also served as a unified platform to manage client requests across the breadth of cloud services offered on the marketplace. “Previously, MSPs’ prior processes relied on getting support from several different distributors or vendors to solve specific support issues,” said the report. “Improved ticketing efficiency led to improved resolution times, benefitting MSPs’ relationships with end clients,” it continued. “Furthermore, Pax8 saved vendor support costs for the interviewees’ organizations, as Pax8 would handle issue support free of charge.” At the same time, it provided support for all products across its platform, reducing the time required previously to generate requests AT YOUR SERVICE: XaaS Pax8 Marketplace Profit Stream and Cost Savings for Channel Partners Profit Stream & Cost Savings Year 1 Year 2 Year 3 Year 4 Present Value Improved account billing efficiency $71,199 $71,199 $71,999 $213,597 $177,061 Improved selling opportunities $105,233 $140,020 $194,400 $439,653 $357,441 Reduced support costs $109,125 $120,375 $131,625 $361,125 $297,580 Total benefits (risk-adjusted) $285,567 $331,594 $397,224 $1,014,375 $832,082 Source: Forrester; Pax8 Source: Avasant Research. Source: CompTIA IT Partner Plans for Solutions and Services Offering in 2020 Mostly extending existing products/services Equal att ntion to new & existing products/services Mostly focusing on new product/s rvices (i.e. emtech) Wait and see approach Shifting from transactional business to consulting Virtual and Augmented Reality Adoption and Customer Experience Profile Adoption Investment ROI success TCO success Satisfaction Low Moderate High Source: McKinsey & Co. Effectiveness of new sales models in reaching and seving customers Existing Apr 2020 Existing Aug2020 Existing Feb 2021 Existing Dec 2021 As effective or more so compared with prior to COVID-19 % of respondents levant and anging rapidly levant and lding steady ly somewhat evant and minishing or sure 37% 29% 20% 9% 7% 54% 75% 83% 92% Much less Somewhat less As effective Somewhat more Much more 9 18 27 39 7 15 31 29 20 5 24 34 25 13 4 33 6 37 22 48 CHANNELV ISION | MARCH - APRIL 2022
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