Joint Venture a Disaster for Some ACN Members

By John Hazard  |  Print this article Print

Members of the Apple Consultants Network are calling Apple's Joint Venture SMB service offering the J.V. Squad, knocking on the service's capabilities. Apple's introduction of the $499 program for small businesses will cause some partners to go out of business, consultants said.

The simple setup and maintenance offered by Joint Venture are the bread-and-butter business of a large segment of the ACN channel, and for those providers, it likely means the end of their business or at least the business they knew, both Shavit and Greenbaum said.

Many in that class of ACN provider are former Apple Store employees and not a far cry from the J.V. squad themselves, Shavit said.

"Many of them realized they were offering this advice for free at the store, why not go out on my own. Others are service providers who just saw low hanging fruit offering those simple setup and repair services," he said. "Both have made a living out of using the Apple Store as their first-line of lead generation. Those who relied on that low-hanging fruit will starve. It’s being plucked by Apple and rightfully so."

Apple is taking their business, that’s a certainty, he said. The ACN members in that position need to change their business model, "they need to step up to the varsity team, or go out of business." Greenbaum and Shavit put themselves in a different class of service provider, those who do their own lead-generation and rely on more seasoned customers with mixed environments and offer best-of breed solutions. ACN members in that group will likely see some attrition of their most infrequent customers with simple system needs.

In fact, both members speculated that Apple may be setting up a two-tier system whereby Joint Venture provides setup and maintenance for first-time service customers ("green customers," Shavit said) and more advanced customers will still gravitate to ACNs who offer those services.

Apple Puts Itself in the "Gun Sites"

In taking on business service, Apple may be going a bridge too far.

"They’re putting themselves right in the gun sites," Shavit said. "You can return product that didn’t work out. You can’t take back advice about a server set up caused you to lose data, lost productivity. They’re opening themselves up to a liability.

"I can just imagine an Apple Genius telling someone 'plug everything into airport and all should work’ and two days later the customer is in there 'what did you do to me? I’ve been down for two days, not billing anyone.’" he said. "That kind of lost productivity, that could doom Joint Venture."

By its nature, Joint Venture, won’t be able to offer best-of-breed solutions most businesses require and will struggle to service mixed-use environments.

"I imagine their advice on a lot of things will be 'you need new hardware,’ " Greenbaum said.

They also face challenges in building and keeping a staff that small business users will trust to protect their business.

"They don’t have it now," Shavit said. There’s a reason they call it the J.V. team.