Best Buy boldly leaping into managed IT services for small business

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.

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TOPICS: SMBs
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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.

Topic: SMBs

Josh Gingold

About Josh Gingold

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.

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  • RE: Best Buy boldly leaping into managed IT services for small business

    Hey wow, we are about to witness new crap flinging monkey's in the industry. After all, I hired one of their tech's only to catch him rubber cementing a key to a laptop keyboard. Which I promptly fired him as well. Can't wait to see what kind of a joke this is.
    Nate_K
    • RE: Best Buy boldly leaping into managed IT services for small business

      @Nate_K Maybe they let him go for a reason? After all, when the next employer hires and fires him, his last job would be you.

      You can't blame the employer for crappy employees, even Best Buy.
      Aerowind
      • RE: Best Buy boldly leaping into managed IT services for small business

        @Aerowind

        "You can't blame the employer for crappy employees, even Best Buy."

        Seems to me that this is one of the principal things that you CAN blame a company for. If they hire and retain crappy employees my business goes to a company that is better run with more talent.

        I really don't see Best Buy having much credibility on managed I/T. I certainly would not trust Best Buy with an business I owned.
        SlithyTove
  • RE: Best Buy boldly leaping into managed IT services for small business

    "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."

    Oh, man, to have been an original investor...
    dsf3g
  • RE: Best Buy boldly leaping into managed IT services for small business

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    mallextreme2011
  • GS Dumb A**

    As a small independent MSP I get most of my managed business from other SMBs because they do not want to deal with the bigger company's. If it's anything like Geek Squad than us independents have nothing to worry about because they are going to focus on selling equipment instead of taking care of it! I to was a witness to how bad Geek Squad techs really are. I was at my local Best Buy to return an item (the return counter is joined with the GS counter), as I was waiting my turn in line an older lady was bringing her desk top in for a repair. A GS supervisor (or whatever they call them) was taking care of the lady. He took the PC set it on the workstation behind him and began to examine it. He tried several times to get the computer to come on with no luck. He finally turned to the lady and said "your problem is a bad power supply and or the motherboard, I would suggest we look into replacing the pc". At this point I began to laugh out loud. I walked over to the lady and the "Agent" taking care of her and said "why don't you try taking that cord on the back of the PC and plugging it in". After looking at me with an even dumber look on his face, he walked over, plugged it in, pushed the power button and was surprised to see the PC come to life. I just smiled at him and said "yea that's what that cord was just hanging there for, it actually sends power to the pc". Clearly embarrassed, he excused himself to get a MRI disk, I took the opportunity to ask the lady what the problem was. Turns out she had a virus on it. I handed her my card and gave her my price and returned to the returns line. I watched as the lady told the tech to just give her the pc back and she left. When i left the store about 20 minutes later the lady was waiting for me in the parking lot. I got the work, and lots more from her as well as her family and friends. She has been a loyal client for the last year. I also picked up my largest client from Best Buy as well, an attorney who I met in the router isle. I no longer shop at Best Buy for quick parts, but go there on the weekends to pick up new clients. All you got to do is just catch the pissed off and frustrated one's leaving the GS counter!
    jc961