Cloud distributor Pax8 adds bill-forward consumption billing option for ConnectWise MSPs

Pax8 has converted its recommendations that MSPs practice bill-forward consumption-based billing into a console option for ConnectWise, and plans to offer the same for other RMM and PSA vendors.

Ryan Walsh, senior vice president of Partner Solutions at Pax8

Cloud distributor Pax8 has given ConnectWise MSPs more choice in how they bill their customers with the addition of a new on-demand service to enable a choice in how they handle consumption-based cloud billing. It gives MSPs the option to bill customers in arrears or forward in a recurring-revenue, SaaS model.

Pax8 has a strong relationship with ConnectWise, and has steadily enhanced their integrations, but until now, the arrears-based usage billing option has been how the system itself was set up – even though Pax8 has been coaching  MSPs how to use the bill-forward model.

“The integration from the very beginning supported usage-based billing, but in arrears,” said Ryan Walsh, senior vice president of Partner Solutions at Pax8. “However, partners told us more and more that this was a headache, and created issues for them in managing customer expectations.”

Walsh said that Craig Donovan, Pax8’s VP of Product discussed this extensively with partners, and they came up with a better way.

“The idea was to turn consumption usage-based billing into a bill forward with SaaS-based billing, which satisfies the headache of the fluctuating bill while still providing the power of usage-based billing,” Walsh said.  “It lets MSPs take advantage of this big struggle with overages and turn it into an opportunity.”

It also lets ‘Bezos’ Law’ – a variation of Moore’s law by the Amazon CEO that postulates that the cost of cloud computing will drop by 50 per cent every three years – work to the advantage of the MSP. Setting a fixed cost  going forward gives the customer more predictability, and thus keeps them happy, but because of the declining price curve of cloud computing costs, it also gives the MSP a wider profit margin.

Walsh indicated that these benefits for MSPs is why Pax8 is calling attention to this now.

“When Craig tell this to partners, it is really being received well,” Walsh said. “What we have been doing until now is essentially coaching the MSPs how to handle the billing forward option –how to SaaSify the  usage. What we are doing now with ConnectWise it not making it just a recommendation, but actually building it into the console. Now the integration lets the partners themselves decide what they will do – traditional consumption-based billing or SaaS-based billing forward.”

Pax8 believes that interest in this will be extremely broad.

“We recently had a Microsoft-sponsored Azure workshop, and we invited partners who were serious about building an Azure practice to hear about this, and Microsoft told us that it was the highest-attended MSP event they had ever had,” Donovan said.

ConnectWise is their first partner to receive this integration, but Walsh said that they will not be the last.

“We will absolutely be doing more of this,” he said. “We are focused on Autotask at the moment, but we will be addressing that topic. It’s a sign of more to come, as we broaden into other PSA tools.”