Ultimate Guide to Partnering® 272 – Unlocking SMB Potential: How PAX8 and AI Are Disrupting the Cloud Channel
Unlock the secrets to explosive growth in the digital landscape!
Subscribe to our Newsletter: https://theultimatepartner.com/ebook-subscribe/
Check Out UPX: https://theultimatepartner.com/experience/
Is your business ready for 2026?
Welcome back to the Ultimate Guide to Partnering® Podcast.
Join Vince and Hayley McSpirit from PAX8 as they explore the immense opportunities within the Small and Medium Business (SMB) space, particularly through the lens of cloud marketplaces. This session delves into how PAX8 is disrupting the traditional channel by being a cloud-first organization , empowering MSPs and SMBs to rapidly adopt and leverage AI, often quicker than larger enterprises. Discover the evolving role of MSPs , the power of community-first approaches , and how marketplaces are becoming the critical platform for delivering comprehensive, integrated solutions to this underserved yet highly lucrative market.
Key Takeaways
The SMB market represents a significant and often underserved opportunity for cloud and AI adoption.
- PAX8 differentiates itself as a cloud-first marketplace, focusing on providing best-of-breed technology and a complete customer lifecycle for MSPs and SMBs.
- SMBs and MSPs are at the forefront of AI transformation, capable of adopting and transforming with AI much faster than larger enterprises.
- The traditional channel is evolving, with MSPs increasingly becoming software development companies (ISVs) and system integrators, driven by new tech opportunities.
- Community-first approaches and strong partner engagement are crucial for supporting MSPs in their growth and adoption of new technologies like AI agents.
- Marketplaces are becoming the primary vehicle for delivering integrated solutions and enabling new business models, including the reselling of AI agents by MSPs.
If you’re ready to lead through change, elevate your business, and achieve extraordinary outcomes through the power of partnership—this is your community. At Ultimate Partner® we want leaders like you to join us in the Ultimate Partner Experience – where transformation begins.
.
Key Tags:
SMB market , MSPs , PAX8 , cloud marketplace , AI transformation , channel disruption , cloud-first , digital natives , software development companies , ISVs , community-first , customer lifecycle , agentic AI , business growth , technology adoption , partner ecosystem , Microsoft , innovation , procurement, cybersecurity, data security , unified solutions
Transcription:
[00:00:00] Hayley McSpirit: And as the new wave of AI as well has come in and, and we see MSPs and SMBs at the forefront of that, to be able to transform far quicker honestly than enterprises. And so we think that we are best placed to, to be doing that.
[00:00:18] Vince Menzione: We believe this time is like no other. We believe we refer to these as the tectonic shifts,
[00:00:24] Intro: all the hyperscalers in the world, if you add them all together.
Managed services will be one and a half times larger because it is the customer buying behavior that has created a need for all of us to rethink our models. Until we have data quality, the effectiveness of AI cannot be realized and effectiveness of the partnerships cannot be realized. Can you figure out, first, what your purpose is and how Microsoft can support your purpose and how you can support Microsoft purpose?
Now we have a partnership. It’s the ultimate partnership.
[00:00:56] Vince Menzione: Welcome to The Ultimate Guide to Partnering. I’m Vince Menzi, own your host, and my mission is to help leaders like you achieve your greatest results through successful partnering. We just came off Ultimate Partner Live at Microsoft Redmond Campus, our most powerful event.
Yet, over two days, we gathered top leaders to tackle the real shifts shaping our industry. If you weren’t in the room. This episode featuring Haley McSpirit, the SVP of Pax eight, brings us right to the edge of what’s next in the SMB segment. Let’s dive in. So this is gonna be an incredible session. We have, uh, the next half hour or so, you’ve heard me talk about this moment right now in the SMB space in a big way.
We’ve talked about marketplaces, the marketplace moment. It’s continuing to evolve. You heard about, about the incredible investments you see. You know, it’s kind of the tip of the spear with Cy talking about it, but you also heard Sandy talk about this as well, just this incredible investment opportunity around marketplaces.
There’s another area where marketplaces are having another significant impact, and this is in the SMB business, right? We thought about the s and i, I’ll just share, as a Microsoft executive, we didn’t quite know how to manage this SMB business when I was a, a partner leader GM at Microsoft, uh, it’s, it’s, it’s handled very well.
But there are organizations that do an even more incredible job and there’s a huge opportunity in this MSP space. In fact, there’s gonna be a workshop on MSPs. Hopefully you’ll be able to attend that session. Uh, but we wanted to get the market leaders in the room and we were very fortunate to have PAX eight in the room.
And Haley McSpirit is gonna join me up on stage really talking about the future. Of SMBs and this marketplace opportunity ahead of us. And for those of you who don’t know PAX eight, I’ll have Haley take us through it. But I’m, I’m delighted to invite ha Mc spirit to the stage. Great to have her here. She didn’t have to travel as far as some of us.
Great to see you, my friend. Good to see you. Uh, you’re gonna be here and I’m gonna be on this side of you. Thank you. Uh, we got to work together at Microsoft, so it’s great to have you here.
[00:03:04] Hayley McSpirit: Thank you for having me.
[00:03:04] Vince Menzione: Um, you were in an incredibly innovative portion of Microsoft. I’ll tell you. You tell your story.
Yeah. But, uh, we got to interact when I was, uh, after I left Microsoft, in fact, and was leading a large ISVs organization. So, so great to have you in the room.
[00:03:19] Hayley McSpirit: Yeah. Thank you for having me, uh,
[00:03:19] Vince Menzione: up on the live stream as well. Yeah. Uh, great opportunity for discussion today, so I’m so glad you could join us.
[00:03:25] Hayley McSpirit: Thank you. Thank you for having me. So where would you like to start?
[00:03:29] Vince Menzione: Um, you know, I’ve been talking about PAX eight. Mm-hmm. I, I do think that PAX eight leaned in, in a very significant way on the SMB market. Uh, how are you different than the rest of the channel, though? And it seems like the evolution of PAX eight is important here and how the company evolved and where, where it’s going.
But, uh, you’re making waves in the market as well recently, and I think there’s some conversation we’ll have. Uh, we won’t trip any wires in this conversation, but, uh, let’s know that you’ve made a big noise in the market, which I think has been heard. Right. And, um, how does PAX eight see itself differently and what is the industry getting wrong about PAX eight?
[00:04:08] Hayley McSpirit: Yeah, well, so yeah, let’s, let’s say we like to make some waves and, uh, we’ve recently launched. Some brand campaigns Yes. Out there. Um, to disrupt the market. We are really going back to our roots in terms of how we like to be a disruptor, how we like to have a big place. And um, actually I think also. Put focus on the SMB.
Yes. So the SMB market is, um, an area which we thrive in, and which we see a huge opportunity. And so where we see a differentiator for us is we truly are a marketplace and we truly bring together what our partners, um, are looking for in terms of that best of breed technology and that complete customer lifecycle, which is the piece that I heard Nicole talk about earlier around how we really need to continue Dr.
Driving that. Um, and I think, you know, PAX Eight’s different because we are a cloud first organization as well, so we’re very much focused on that. And as the new wave of AI as well has come in and, and we see MSPs and SMBs at the forefront of that to be able to transform far quicker honestly than enterprises.
And so we think that we are best placed to, to be doing that as well.
[00:05:20] Vince Menzione: Yeah. You mentioned first of all the cloud. Approach is incredibly significant. And we’ve had this conversation backstage. Uh, I’ve been to some of the events where some of the SMB market comes, uh, some of the MSP market comes to, and it really isn’t cloud first.
It isn’t cloud significant. Mm-hmm. And I’ve been in the room speaking at some of these groups and some of these meetings where a lot of these organizations are kind of playing in the past. Right. And, um. It’s really great to see the embrace that Pax has had. And I’ve, I haven’t been to, I’m, I’m hoping to come to your event this June.
Oh, I hope to see, yeah. I’m gonna be there. This, it’s a great event this June, but I’ve heard they’re really happening, so I thought maybe you could talk about that a little bit. It’s almost like a, I don’t wanna use the word cult ’cause that’s always misinterpreted. Yeah. But there is a very strong, uh, engagement with the, with the partners in, at your events.
[00:06:06] Hayley McSpirit: Absolutely. So, um. I mean, it is a great event. I think that’s an opportunity to come together. And Community First has been such a driver for PAX eight around the MSPs out there and being able to support them in the enablement of their journey. Uh, and so we’ve, we’ve. Put a lot into that as a way of bringing partners together, help them understand where the market’s going.
Um, we’ve talked, uh, you, I’ve heard our CEO Scott Chaison talk about the AgTech AI and the future and had some very bold statements last year on stage around ai, which actually has sort of moved forward very quickly and, and so interesting. A little bit more of a visionary in terms of seeing where it’s going.
And I think that event is a way of us really. Starting off, it coincides a little bit with the end of the Microsoft fiscal year, beginning of the new ones, which is helpful as a big partner of ours, and we’re very grateful. And to be able to build that momentum into the next 12 months of supporting those partners through growth.
I mean, it’s, a lot of the sessions are focused on academy and focused on how do we help them build their business, um, and think about how do they integrate other solutions, um, as they grow. So. Yeah, it’s a great opportunity. It’s a great place to, um, come and hang out and spend time and get to know people, but also an opportunity to learn.
And one of the things that you may have seen or, or be aware of is we also launched last year our Voyager Alliances program, which is our way of helping partners see where they are on their journey.
[00:07:40] Intro: Interesting. And
[00:07:41] Hayley McSpirit: so that’s very much. Uh, helps, helps signify to the market and to our partners, how we can help them build their business and what’s available to them within the Pax PAX eight ecosystem of services and, and other things to take advantage of.
[00:07:55] Vince Menzione: So, PAX Eight’s not been in the market for a hundred years. Uh, you came into a mature marketplace. Mm-hmm. Probably less than a decade, maybe a decade ago,
[00:08:03] Hayley McSpirit: around about that. Yep.
[00:08:05] Vince Menzione: And what has made PAX eight. Different, like, how does PAX eight think about the market differently? How, how, how have you, how’s your approach been different or unique?
[00:08:13] Hayley McSpirit: Yeah. So, um. A distribution is an interesting word inside of the walls of Pax A. And we like to say that we are not distribution. Okay? We aren’t, we are a marketplace first. And uh, we have been very bold about how we position that in the market. Yes, and how we think about what we offer. And the reason why we see ourselves as differently is because we’re founded on a marketplace and a platform.
So if you hear any of those, the terminology, and when we think about the marketplace, that is the true moment of where the e-commerce comes together with the fulfillment and the whole lifecycle of that from a licensing point of view, as well as product features and functions. But then the extensibility of our platform is where we really see the difference.
So where we focus on the integration with third parties, where we are looking at. The enablement of what we call embedded marketplaces. So how do we help others come towards PAX eight and really, um, embrace the opportunity to enter into the SMB space, which for some is a little bit daunting or a little bit expensive.
Um, if you’re looking at building out into the true S of SMB. And so that’s where we see ourselves as different to the market. Okay. And that we are thinking truly about that and then underpinning it with ai.
[00:09:25] Vince Menzione: So the value you’re bringing to the partners software development. Companies mm-hmm. And the like that want to enter the space is you’re helping guide them into that SMB market.
[00:09:34] Hayley McSpirit: Absolutely. I
[00:09:35] Vince Menzione: look at, I look at some of the big ISVs that are in the room that have been, that’ll be talking at our event, and a lot of them don’t have a very strong SMB focus.
[00:09:43] Hayley McSpirit: Yep.
[00:09:43] Vince Menzione: So that’s where you come in. You help guide them through that process.
[00:09:46] Hayley McSpirit: Yeah, we do. So there is sort of two ways of looking at it when we think about SMB and what PAX eight can offer.
Yeah. One is, um, those partners as MSPs who want to serve the SMB on a, on a SMB size and stature themselves. So how do we help them continue to grow their business directly as our hero in this, in this story. But then when we look at those, um, software houses, software development houses, or. Companies or ISVs or digital natives.
I think we’ve got lots of different words, but however we want to term it, um, and look at how they want to enter into the SMB market or perhaps we. We’ve configure how they think about the SMB market. We see ourselves in a pivotable spot because we understand we live and breathe it every day. I mean, where I would say is we, we serve the underserved in terms of that market segment.
When I talk to Microsoft, they, they share that, you know, we are really thinking about SMB and I love Microsoft Daily. Um, but when I say, what’s SMB, they’re like. Well, a hundred seats and above, and I’m like, yeah, a hundred seats is, is still a little big when we think about our average customers. So there are lots of really small businesses out there.
Um, and so what we’re, what we’re positioning is, um. Help us, uh, let us help you by being your SMB custodian. Let’s be your SMB as a service solution. How we can create either a modular approach that suits your business, um, or a complete package of, of service offerings that we can give to you, uh, that enables you to essentially.
Park that SMB business outside of your day to day, um, and alleviate some of that overhead costs for yourselves, and then we would partner to run that. But
[00:11:28] Vince Menzione: Interesting. You
[00:11:29] Hayley McSpirit: know, you can take it different ways.
[00:11:30] Vince Menzione: Yeah, no, I, it’s, it’s very, it’s fascinating to me, in fact, because, um. Nicole was on first this morning mm-hmm.
Talking about this market, right. This small medium market and SM BSMB market. Mm-hmm. And that is, it is a rich opportunity area. It’s, and that, uh, most partners shy away from it because they don’t know how to address it. Mm-hmm. Or they try and address, address it with the wrong set of skills or the right, wrong set of investments.
Mm-hmm. Like direct sellers. Mm-hmm. Going on a hundred. Person organizations mm-hmm. Are pretty small. So there’s some things you do within the organization to help drive that. Right. How do you, how do you, how do you address the, let’s talk about the SM SMBs themselves. Yeah. The, uh, let’s talk about them as a group of organizations.
How do you think about the MSPs themselves?
[00:12:15] Hayley McSpirit: The MSPs or the SMBs, or. Well,
[00:12:17] Vince Menzione: let’s talk about MSPs. I’m sorry. Yeah, no, that’s okay. I was conflating the terminology here, but these are, these are organizations that are managed service providers.
[00:12:25] Hayley McSpirit: That’s right. Yep.
[00:12:26] Vince Menzione: And the, the kind of the growth of the SP market started with.
The, the hardware business. Right. It was like, I have a laptop or I have like a 50 laptops and somebody needs to come service me.
[00:12:37] Intro: Yep,
[00:12:38] Vince Menzione: yep. And it was very old, old it, old school it mm-hmm. Is the way I would look at it. Mm-hmm. How do you think about that market today?
[00:12:45] Hayley McSpirit: Yeah, so it’s an interesting one. Um, I actually heard the, the term, if you’ve heard some that boots slammers or like
[00:12:51] Vince Menzione: boot slams.
[00:12:52] Hayley McSpirit: I think it’s that car, but you know, like
[00:12:53] Vince Menzione: it’s not this type of boot. Okay. No. Maybe I’m, maybe
[00:12:56] Hayley McSpirit: it’s like my British isms coming out, but essentially, you know. The, the traveling salesman kind? Yeah, the original, uh, reseller. The, how do I just fix break, fix? What’s that? You know, going through and just servicing individual customers with, um, immediate support needs.
Um, and then as you look now and the evolution of the MSP, it really is that complete services package. Yeah. Um, and we have some. Really fascinating conversations right now going on with some of our, um, MSPs who are coming to us and saying, look, AI agents, we, we get it. We’re on board. We wanna do it. Help.
Help us create those. Mm-hmm. And help us resell those through your marketplace. Interesting, interesting. And how quickly can you do that Pax? Eight. And why are you not doing it now? Right. Like so, which we are, we’re starting, we are moving very quickly and we’ve created a, um, internal AI transformation office where we are research development creating.
And how do we repackage that quickly and. Even faster, uh, so that we can provide that context. And also guidance for the MSPs because they’re, they look to us and say, well, you know, Microsoft and others, they’re out there talking about the world of ai. Um, help us become that. I mean, we truly believe, um, and a year ago I would’ve said, I don’t think I do believe, but now I do that some one day that there’ll be a completely autonomous.
MSP that will not have, as an AI agent, that will not have people, it will just be running on its own. So I think interesting. I think we gotta be moving with the times, and I think that’s where the MSP evolution of that next generation of MSP is coming faster than ever. So
[00:14:37] Vince Menzione: it makes sense. And it also from a scale perspective makes a tremendous amount of sense.
We had Sandy and Pat up here a little bit earlier talking about Agen ai. Mm-hmm. Yep. And some of these ISVs and some of these organizations and. Also how ISVs and sis are emerging capabilities. Yep. In some respects, you, you replace that SI component, right? You take that ISV solution set. And layer it down to the MSP so they can deliver it to the customer.
Is that what I understand?
[00:15:02] Hayley McSpirit: Yeah. There’s that. I mean, I also think that the lines, the, the lines between distinction of partner types is blurring. Yeah. Yeah. Sorry. I think, I think that’s, no, but I think it’s, it’s interesting to see, I mean, when you, when you reference. Uh, the MSP now evolving. I actually think the MSP is becoming an ISV and is becoming a, a systems integrator.
And they, they’re becoming all of these things because of the opportunity out there with what’s available in terms of the tech and also in terms of what the market’s asking. Um, and I think that SMBs, SMBs size of organization and MSPs serving the SB are the ones that are gonna be there first. Um, I think that you, you see copilot chat and we.
We engage with co-pilot chat and we think it’s great. We’re, we’re customer zero on co-pilot, so we are all in. Very nice. Um, but the other component is we, we are seeing our MSPs actually move past chat because they’re like, yeah, well I don’t, I’m, I’m all in. Right. So I don’t need to start with the chat.
Yeah. Whereas for the enterprise, that’s a little different. There’s a need to kind of bring that phased approach in because you’ve got a lot more investment to make. You’ve got a lot more processes to deal with. Yeah. So yeah, we’re kind of all in there.
[00:16:15] Vince Menzione: So where’s it heading? I. So talk about the future
[00:16:18] Hayley McSpirit: robots.
No, I dunno. Where is it heading? Um, I mean, it might, uh, the, uh, you know, for us it’s how do we nail the, what is the value proposition of AI solutions for s SMBs and for Ms. P serving. The SMB and how quickly can we get there and how can we ensure that it is safe? And the secureness to that. I think there was a conversation earlier about the data and getting the data right.
I mean, that’s our number one blocker out there. Um, making sure that data’s secure and data is right, so we can make it, make headway in that. But, um, we we’re, we’re very much in the, in the exciting space, so.
[00:17:01] Vince Menzione: So, um, I know you’re gonna talk about this event that’s coming up in June, which I’m thrilled to join you at.
Uh, tell us more about it and why the partners here and that are watching us on the livestream should join us.
[00:17:14] Hayley McSpirit: Yeah, absolutely. So Beyond is our flagship event and uh, it’s taken place in Denver. The eighth through 10th. Um, we also have beyond, uh, in EA as well, which happens later on in the year, in the October timeframe.
And this is our, I mean, it’s, it’s already 75% sold out, which is fabulous. Wow. That’s fantastic. We are just really excited to, to have such an amazing group of, uh, partners attend and, you know, signed up as soon as, as beyond was over last year. We have, um, over a hundred ISVs, our vendors, um, participating. We, um, really.
We’ve brought in some amazing speakers, uh, in terms of industry speakers.
[00:17:57] Vince Menzione: I’ve heard some names, some very interesting names. Yeah, Malcolm Gladwell was with us last
[00:18:00] Hayley McSpirit: year and, um, some Olympians as well on stage, which is always wonderful. But then in terms of the topic and content, it’s, it is about bringing the community together.
It is about talking about the trends and really how do we enable those MSPs, um, and what can they do to, to dig into the, into the data as well as. Be hands on. So there’s a lot of enablement sessions. It’s a great opportunity to really get a sense of what SMB communities are all about. Um, and it’s just, it’s just a really fun, I mean, I’ve been to, and I’m sure you have, I’ve been to a lot of Microsoft events, which are I have, which fabulous.
Um, but I think we do it
[00:18:38] Vince Menzione: better. Yeah. You’ve got some amazing speakers this year as well. Yeah. Got
[00:18:41] Hayley McSpirit: some good speakers.
[00:18:42] Vince Menzione: I don’t want to, I don’t want to tip my hat that I know about some of the names that’ll be there.
[00:18:46] Hayley McSpirit: I know, but it’s perfect. It,
[00:18:48] Vince Menzione: yeah. And then we also have our Ms. P event, uh, a session that’s going on this afternoon and tomorrow.
So hopefully you’ll have a chance to jump in with some of our leaders.
[00:18:55] Hayley McSpirit: Absolutely. Absolutely. Because
[00:18:56] Vince Menzione: I do think there’s a huge opportunity for organizations to come on board in a bigger way.
[00:19:00] Hayley McSpirit: I,
[00:19:01] Vince Menzione: yeah,
[00:19:01] Hayley McSpirit: would love those conversations. I mean, we are really seeing an interest with those, those enterprise ISVs that are just like, I would love to have a conversation about how I can enter this SMB space and we can do everything from design consulting to pre and post sale to customer lifecycle management.
It’s, it’s. S the whole package, um, of that SMB as a service that we, we just would love to, you know, have more conversations, engage and, and also learn like what else are we seeing out there? What else can we learn from others? So. Yeah.
[00:19:31] Vince Menzione: Well, we’re delighted to have you today. Thank you. Thank, hopefully you get some time to spend.
I know there’s a lot of networking happening outside this room as well as inside this room, so hopefully we get to spend some time with our ultimate partner members here today. I’m
[00:19:41] Hayley McSpirit: excited to do so. Yeah. Thank you for having me. So great to have
[00:19:43] Vince Menzione: you, Hailey.
[00:19:44] Hayley McSpirit: Yeah,
[00:19:44] Vince Menzione: thank you so much. Thank you. Thank you. So great to have you.
Thank you. Thank you so much. Thanks for tuning into this episode of Ultimate Eye to Partnering. We’re bringing these episodes to you to help you level up your strategy If you haven’t yet. Now’s the time to take action and think about joining our community. We created a unique place, UPX or Ultimate Partner Experience where leaders come to learn from each other.
It’s more than a community. It’s your competitive edge with insider insights, realtime education, and direct access to people who are driving the ecosystem forward. UPX helps you get results, and we’re just getting started. We’ve got big plans for you this summer as we’re taking this studio, and we’ll be hosting live stream and digital events here, and it’s all coming to you soon.
So visit our website, the ultimate partner.com to learn more and join us. Now’s the time to take your partnerships to the next level.