Best Buy For Biz ... Not

One of the big questions that hovers over the channel right now is just what impact the massive small-business effort being mounted by Best Buy for Business will have on the channel and the market.

STEVEN BURKE Can be reached at (781) 839-1221 or via e-mail at sburke@cmp.com.

In our cover story this week, CRN Distribution Editor Scott Campbell weighs all sides of the Best Buy equation, providing an inside look at the Best Buy strategy and the market reverberations. One thing is clear from the breadth and scope of Best Buy’s effort: There is going to be further erosion of product margins as a result of the rush by vendors to be affiliated with Best Buy. What the Best Buy/vendor partnerships prove yet again is that in the small-business market, most vendors could care less about partner profitability or solutions. That’s something VARs are going to have to carefully weigh as they build their small-business practices and partnerships. As major vendors grab for market share with channel strategies riddled with conflict, more VARs will partner with smaller vendors that have strong technology products and a 100 percent channel-focused effort.

The Best Buy bid also is going to further fuel the rapid march by small-business-based solution providers into managed services, a move that has led to an all-out price war among managed services platform vendors. CRN Senior Editor Dan Neel once again does a bang-up job providing managed services scoops with a detailed look at the price war in our lead news story.

The Best Buy for Business effort no doubt also is going to result in more than a few botched jobs that will have to be cleaned up by solution providers. That’s something vendors better think long and hard about. If one vendor has to be singled out for margin erosion in this Best Buy initiative, it is Microsoft, which has given the retailer Gold certification status. Microsoft has done what no one thought possible: further devalued the tattered Gold certification and driven down Microsoft software margins even more.

When we look back at channel history and whether Best Buy for Business delivers on bringing robust solutions to technology-starved small businesses, my bet is the answer will be: Best Buy for Business … not.

What do you think of Best Buy for Business? Let me know at (781) 839-1221 or via e-mail at sburke@cmp.com.