Why MSPs Have Nothing to Fear from Best BuyBy Pedro Pereira | Posted 2011-11-22 Email Print
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Sure, Best Buy is a giant in consumer electronics retailing and already has its Geek Squad which competes with those solution providers targeting the S part of the SMB market. But even with its acquisition of a real managed services provider, MindSHIFT, Best Buy won't make a dent in the managed services market. Here's why.
Don’t panic, folks. Best Buy’s planned entrance into the managed services market will have as much impact on the IT channel as a gnat flying into a pane of glass. You may get a little spot on the glass, but the pane won’t budge.
The reason is simple: Best Buy cannot compete with the managed services providers (MSP) that for the better part of a decade have introduced and perfected the delivery of remote monitoring and management to small and midsize businesses.
Sure, the behemoth retailer will acquire thousands of customers with the planned acquisition of MindSHIFT but that is still drop in the bucket of the expanding managed services market.
In a statement announcing the MindSHIFT purchase, expected to close by year’s end, Best Buy says it is gaining 5,400 small and midsize customers and 25,000 managed desktops. The retailer also expects a competitive advantage in the marketplace as it presumably looks to new customers once it completes the integration of MindSHIFT. With the acquisition, Best Buy will join Staples in a class of retail chains with a managed services business.
To be sure, Best Buy has the capacity to expand the MindSHIFT business. The company certainly has a sweet opportunity to convert a lot of retail PC buyers into managed services customers. With the increase in telecommuters and consultant-type computer users, remote monitoring is a powerful value-add.
But when it comes to competing with business-to-business MSPs, I seriously doubt Best Buy will cause a ripple.
Of course anything is possible, and it wouldn’t be beyond the realm of possibilities to see Best Buy establish itself as a serious MSP. But that would take considerable effort and unwavering focus by the folks in charge of the managed services operation.
And we all know that large companies that make most of their money from established operations – retail sales, in this case – don’t always understand what it takes to make a go of an ancillary business with a more targeted customer base.
My sense is that Best Buy’s MindSHIFT business will be to MSPs what the Geek Squad has been to the IT break/fix channel.
Think about it. How often do you run into the Geek Squad, outside of seeing the logo on their black-and-white cars on the road? Probably not much, and when you do, it may be through a frustrated customer who has just had a bad experience with Best Buy’s in-house support techs.
I don’t want to be too harsh on Best Buy, especially since I am a happy retail customer, but suffice it to say that its "geeks" aren’t exactly tough competition for your average road-tested IT services provider. There’s plenty of fodder on the Web about the expertise, or lack thereof, of the Geek Squad, so I won’t get into that.
I’m not suggesting the MindSHIFT technical staff lacks expertise or will end up with websites dedicated to stories of bad experiences, a la Geek Squad. However, if Best Buy has any hope of expanding the business in a meaningful way, the retail giant will have to invest in people who understand the managed services model and can deliver the goods. Low-paid "geeks" with limited technical experience simply won’t do.
Any MSP can attest to the difficulty of finding the right talent to run an RMM-based business, or the need to invest time and money to train technical staff unfamiliar with the model.
With all this in mind, it’s important to have perspective about the likely effect that Best Buy’s MindSHIFT acquisition will have on the MSP channel. I contend it will be not much at all.
If anything, the commoditization of RMM should serve as impetus for MSPs to add not only new services but also boost overall value. After all, there is plenty of growth left in the managed services market. Insight Research projects the U.S. managed services market will grow at a 12 percent clip to $47 billion in 2015. The market was estimated at $29 billion in 2010.
MSPs would be wise to keep an eye on Best Buy, but most importantly, stay focused on their own business strategies and find viable new ways to serve customers.
Pedro Pereira is a columnist for Channel Insider and a freelance writer. He can be reached at email@example.com.