Pax8’s peers have reacted with a mix of admiration and dismay to its latest marketing stunt – a full-page advert in the New York Times blasting the term ‘distributor’.
Running on Sunday, the ad – which was attributed to Pax8 CEO Scott Chasin – accused the world’s two largest IT distributors, TD Synnex and Ingram, of “selling the past”.
Chasin argued that commentators were “wrong” to call Pax8 – which aggressively brands itself as a marketplace – a “distributor”.
“They called us a distributor becaue they didn’t know what else to call us. But we were never like them,” he wrote.
He added: “…If you’re looking for someone to sell you the past, here are a couple of companies that do it well: Ingram Micro and TD Synnex.”
The ad picks up on a theme Pax8 has been hammering for several years. In November 2023, Pax8 Co-founder Ryan Walsh told IT Channel Oxygen that the market was finally ready to accept it as a “cloud commerce marketplace”, rather than pigeon holing it as a distributor.
So eager is Pax8 to distance itself from the term distribution that it declined to help us with our 50 Must-Know UK Distributors report in November, in which it ranked 28th.
Pax8’s stunt comes amid efforts by a number of distributors – among them Ingram itself – to rebrand more as platform companies. In its recent IPO filing, Ingram billed its “self-learning” Xvantage platform as a “significant milestone” in its evolution, name-checking it a whopping 22 times.
Nathan Marke, COO at Giacom, which also tends to go to market as a marketplace, said Pax8’s point that platforms are disrupting distribution “is well made”.
“Giacom has gained market share through our own platform play, but where Pax8 focuses on global software distribution, our platform offers a one stop shop across comms, cloud and IT for the UK channel,” Marke said.
“But we both represent only a part of the supply chain. Creating a true, scaled ‘Distributor 2.0’ will require a platform, but also vendor breadth, depth and trust, global logistics, an almighty balance sheet, an exceptional team AND global execution – and of course this doesn’t exist today. Pax8 will be keen to ensure that it attracts platform rather than distribution valuations from its investors whilst at the same time waving a flag to the global players as they build their 2.0 plans – which I’m sure was the purpose of the piece in the first place.”
Dave Stevinson, CEO at QBS Software – which also bills itself as a software platform – said he felt QBS has “many similarities with Pax8”.
“I must admit to never feeling comfortable with the term distributor to define us either,” he said.
“I am sure the overwhelming majority of the readership of the New York Times would not care how Pax8 choose to define themselves.
“Perhaps they are motioning towards a further capital raise, or perhaps an IPO on the New York exchange and are seeking to shape investor sentiment.”
“I agree with their points of difference to the broadline distributors that they reference – yet there are also points of similarity too. Does this open up a taxonomy classification?”
Hayley Roberts, CEO of cybersecurity VAD Distology, said she simultaneously “loves and doesn’t love” Chasin’s ad.
“How can I not like the fact that Pax8 are being disruptive with their statement of doing things differently because the channel is evolving and yes, we must do things differently to survive. I also hate the term distribution as it sounds old fashioned and is not a good description of what, quite frankly any of us who sit at that level do. And I am a huge supporter of shaking the tree and saying it how it is and challenging the norm,” she said.
“However, I believe the channel is a huge industry sector that serves so many partners and technology needs that individually we cannot be everything to everyone. This is why I love the channel. There is room and choice for everyone. So whilst we might compete at times, we all have our USP’s and there is so much good business to do, that’s the beauty of it.
“I never slate any competitor in the distribution space but not because sometimes I don’t want to. It’s bloody annoying when you have competition, and you are not the only distributor working with a key vendor. But that’s where it’s interesting and allows us at Distology to shake things up and make ourselves stand out, be better and stay in our lane of what we want to be recognized for. We all have opportunity and limitations but those are the rails we run on and god its exciting to navigate all these challenges.
“Long live that layer we sit at we currently call distribution!”
Mukesh Gupta, CEO of cybersecurity distributor e92plus, dismissed the ad as marketing spin, however.
“It’s a great PR stunt to be fair, but ultimately it’s about what role they are playing – and everything they talk about is essentially distribution,” he said.
“What is a marketplace? They are facilitating partners as buyers and vendors as sellers coming together, and they are managing that exchange and the transactions. While there’s no warehouse for physical products, they are still the middleman – and whatever terminology is used, it’s fundamentally distribution.
“Their value is in the automation of the online platform, for us it’s our expertise and relationships. We’ve invested in our people, our teams, and ensuring they are supporting our vendor and reseller/MSP partners in growing their business, using our knowledge and experience in cybersecurity.”
“Their advert has got plenty of us talking about distribution and what labels we can use, what it highlights is the different approaches we are taking, but essentially the value and innovation we bring to the channel.”
TD Synnex’s UK MD and SVP Dave Watts shrugged off Pax8’s broadside, saying the distributor is “proud of who we are”, and that he “welcomes the conversation about the importance of distribution” (see Watts’ full reaction here).
IT Channel Oxygen has approached Ingram for comment, and will updated accordingly.
In a statement to IT Channel Oxygen, Pax8 said: “We have nothing further to add at this time.”
