I have been bothered by the Best Buy acquisition of mindSHIFT, mostly because I haven’t been able to make heads or tails of their rationale for doing the deal. It seemed like a very strange combination. Particularly, because mindSHIFT was a fairly mature MSP, did not sell into the residential market, and Best Buy did not seem to have any way to use the acquisition in their business model. Even the Dell acquisition of Silverback or the Konica Minolta purchase of All Covered each had a logic behind the transactions. But there had to be a reason for the deal beyond just a major electronics retailer wanting to own a managed services provider. So, what is it?
Best Buy is likely going to be launching a managed services channel play into the SMB marketplace. It’s the only move that makes any sense. Here are the reasons why:
- Best Buy is following all the other electronic retailers and vendors (i.e. Staples and Konica Minolta) by heading into small business services; cloud and managed services make the most sense
- mindSHIFT has the capacity to deliver a nationwide array of services aimed at the SM
- Best Buy can’t approach the SMB without a channel model
So, if I’m right, what does this mean for the average MSP out there? If Best Buy is embarking on a managed services channel strategy, there are a number of important obstacles they must solve in order to compete for the lucrative SMB market.
First, mindSHIFT did not have a lot of channel expertise (it sold direct) so Best Buy is on its own to develop a channel program that will be effective.
Second, Best Buy is primarily known as a residential electronics store, and not a resource for businesses. Best Buy will have to cultivate internal expertise and knowledge (meaning it will need to leverage mindSHIFT completely) about the SMB market and it will have to embark on a massive educational campaign to get small businesses to view Best Buy as a resource for their IT management needs.
Third, Best Buy will have to become a trusted player within the MSP channel community in order to recruit enough MSPs to make this venture successful.
Something tells me we will be hearing more from the retailer in the near future. Until then, we will have to wait and see…