Best Buy boldly leaping into managed IT services for small business

Summary:The global retailer is set to close next week on its acquisition of a leading managed service provider for small and medium business which may have a much wider impact on the MSP market.

Next week’s expected closing of Best Buy’s $167 million deal to purchase mindSHIFT Technologies represents a watershed moment for small business IT services.

In the acquisition announced last month, Best Buy will add more than 5,000 small and medium business clients for cloud, data center, and professional services on top of its existing (and considerable) business and retail services.

The move is especially important not only for what it means to Best Buy and mindSHIFT, which both stand to gain a great deal in terms of business and customers, but also what it may mean for independent managed service providers who may find it more difficult to compete in markets where the new company operates.

And the stakes are high.  Best Buy estimates the current SMB market for managed service providers at about $40 billion and the backing of a company such as Best Buy will likely allow mindSHIFT to expand and gain new market share much more quickly then it could ever do on its own.

Right now, mindSHIFT has 500 employees in offices throughout the eastern U.S. but Best Buy has about 836 locations nationwide and so the potential for growth is enormous -- and even likely -- based on the precedent already set with Geek Squad, which is essentially the consumer equivalent of mindSHIFT.

In 2002, Best Buy entered into a joint operation agreement with Geek Squad and quickly grew the company from fewer than 75 employees in just a few markets to more than 20,000 worldwide in just over 5 years.

A company representative confirmed today that the deal is expected to close by the end of next week or perhaps shortly thereafter.

Topics: SMBs

About

Josh Gingold is the Managing Editor of Business and Technology Research Libraries for CBS Interactive with primary responsibility for the presentation of key research and commentary through a combination of blogs, white papers, and Webcasts. Josh's past experiences include a variety of editorial and production assignments for CNBC, CNET... Full Bio

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