Nothing surprises me anymore. What used to require defending (the business model of managed services) is now the hottest game in town. When I saw the news that Best Buy had purchased one of our members, mindSHIFT, for $167 million, I thought it was a misprint. While I wish Best Buy tremendous success in their new endeavor, I do have questions that I'm sure are right now being asked by the managed services channel?
Will the two organizations get along? I've seen some unusual combinations in managed services over the years; some of them work out, some don't. Now, with regards to this deal, I wonder how two organizations, with what I believe I can safely say have vastly different IT service delivery cultures, are going to end up as a single cohesive unit. Another question is does Best Buy want mindSHIFT to blend into their culture? Still another question is whether mindSHIFT and its customers would be better off being left alone?
Some M&A deals do end up being better off in the long run if the entities are kept at arms length. The CA Technologies acquisition of Nimsoft comes to mind. If mindSHIFT is allowed to operate as a separate entity, perhaps this deal will have a good chance of bearing fruit.
Channel confusion? Best Buy doesn't have a channel presence. It does, however, have a direct retail end-user presence. Like Microsoft, Google, and Apple, Best Buy is now entering the professional managed services world with this acquisition. What do they intend to do with it? According to the press announcement, the purchase appears to be focused on going direct to the small and medium sized business community.
"There's no question that acquiring the skills, capabilities and clients of mindSHIFT has the potential to help expand Best Buy's global services capabilities in the vast small and mid-sized business market," said George Sherman, senior vice president of Best Buy Services. "As important, the mindSHIFT team will bring added experience, talent and resources to the remote support capability we have been building within our multi-channel tech service unit Geek Squad."
Already feedback is flowing in from the MSP community expressing doubts as to whether this acquisition is going to seriously impede their managed services business.
Which standard will prevail? mindSHIFT is the result of organic managed services growth as well as several key MSP acquisitions over the years. Curiously, several of those acquisitions involved not only MSPAlliance members but key leaders within the MSPAlliance community. Both Alpheon and Invision were MSPs purchased or merged with mindSHIFT over the years; both MSPs were advisory board members; and both companies were influential in shaping many of the key poliices of the MSPAlliance, including the Managed SErvices Accreditation Program (MSAP, now the UCS audit). mindSHIFT was a deeply process driven and professional grade MSP. How will that type of managed service organization fit into a business that is undeniably rooted in retail?
Once again, I wish both organizations all the best. It is very nice to see our members reach success at these levels. However, I will not be the only one keeping a close eye on how this deal unfolds in the next year. Will this acquisition make Best Buy more friendly and legitimate to the SMB? Only time will tell.
