Wasabi picks cloud distributor Pax8 for first distribution deal

Wasabi is looking for Pax8 to significantly broaden their pool of quality partners, including through Pax8’s relationship with Veeam and with the RMM/PSA providers.

Jennifer Kula, VP of Alliances and Channels at Wasabi

MIAMI – Cloud storage vendor Wasabi has broadened their go-to-market strategy, which is increasingly focused on Managed Service Providers [MSPs], with their first distribution deal. They have partnered with cloud distributor Pax8, who they met on the trade show circuit, in a relationship that will leverage Pax8’s new partnership with Veeam. The announcement was made at this week’s VeeamON event here.

Wasabi markets itself as ‘the hot cloud storage company.’

“Hot cloud storage is the next generation of cloud object storage,” said Jennifer Kula, VP of Alliances and Channels at Wasabi. “The first generation of object storage didn’t deliver on the promise of the cloud. It wasn’t better performing, it wasn’t easier to manage and it wasn’t less expensive. Our founders set out to make it higher performing, and so change the economic model of how cloud works.”

Those founders are David Friend, Wasabi’s CEO, and Jeff Flowers, the CTO, who have founded five successful technology companies, most recently Carbonite, which they launched in 2005. They formed Wasabi in early 2015, and the service came out in May 2017. Today, they have over 75,000 customers, with between another 4,000 and 5,000 in trial, 800 channel partners, and over 200 interoperable technology partners.

Wasabi has a highly disruptive pricing model, with a rate of $5.99 per TB per month.

“They caught our attention because they have found a way to reduce storage costs by 80 per cent – without charging egress fees or API request fees,” said Ryan Walsh, Chief Channel Officer at Pax8.

“The first-generation object storage providers used third party and open source tools to write data to disk,” Kula said. “They were not optimized for cloud object storage. Part of what Jeff Flowers and the team he brought here was able to do was leverage their work with file systems around storage to build a file system from scratch that would be optimized for object storage. We literally read each bit of data that goes onto the disk, to optimize the amount of data that goes on, and we have other efficiencies like layered shingle magnetic reporting drives. Only three or four companies are using them, including DropBox.”

Wasabi’s customers span the gamut from small companies to the very large.

“It’s a bell curve, from those with a TB or two of data, to a lot who use between 10 TB and 50 TB a month to the enterprise, who use multiple petabytes of data,” Kula said. “It’s truly a horizontal application.” She indicated they are used broadly across all the core storage use cases, including  backup, DR, archiving, data analytics, and surveillance.”

Wasabi started out with the same direct selling model they had used in their proof of concept stage, before noticing that many of their customers were MSPs, who could mark up the price to their customers by several times and still come in well under their own competition.

“MSPs found us, and began buying from us on behalf of their customers,” Kula indicated. “We then made a major shift in that direction in our go-to-market strategy.”

That included the launch of their first channel program at the beginning of April. It’s a relatively simple two-tiered model – Authorized and Advanced partners – where 5 PB of data makes you an advanced partner. Wasabi also allows MSPs to white-label them or use ‘powered by Wasabi’ on their offering.

Cloud distributor Pax8, which itself made major news at the VeeamON event when it added Veeam to its limited boutique distribution roster, is Wasabi’s first distribution partner. A key feature of the Pax8 model, which is attractive to Wasabi, is the Pax8 Stax BI tool that they introduced a year ago, which automates the process of identifying gaps in MSP customer solution stacks, and recommends offerings to fill those holes.

“Pax8 also offers Azure, with which we compete, but because we are just object storage we fit in a little differently,” Kula said. “Because we are S3 compatible, we will be bundled in with Veeam a lot in the Pax8 Stax, which will let an MSP customer find the lowest cost solution.”

Pax8 also represents a way that Wasabi can work with RMM [Remote Monitoring and Management]  and PSA [Professional Services Automation] providers like ConnectWise, Datto/Autotask, and Kaseya.

“We looked at partnering with those companies directly and decided not to go in that direction,” Kula said. “Their requirements as a vendor for margins did not match the commodity-based offering we provide. Those partnerships also would have represented a lot of effort, because you have to reach out to all of them to get good scale. Pax8 partners with them, so our partnering with Pax8 allows our provisioning and billing to pass back through them.”

While Wasabi stills sells direct, Kula said that more and more of the business is going through MSP partners.

“We still have a hybrid model, but we are growing to be very channel-centric,” she stated. “We are converting the culture.”

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