Best Buy's acquisition of mindShift, a $100-million MSP, won't have any impact on the business of smaller MSPs, according to several executives attending ConnectWise's IT Nation 2011 conference in Orlando.
Cam Ferrante, president of CamNet, a Albuquerque, N.M.-based MSP, said he's only "vaguely concerned" and likened the acquisition to Best Buy's purchase of Geek Squad in 2002. That had negligible impact on the channel, he said.
"They have their level of customers and service and we have ours. I think most folks here [at IT Nation] offer a higher level of service and more sophisticated service than what would be available through Best Buy," Ferrante said.
Matt Hyatt, CEO at Rocket IT, Duluth, Ga., also noted that Best Buy has not had much success gaining market share from the channel through the years.
"I don't think they can do it. They're a big, giant corporation and I don't think they get it. I think any clients they do get would be clients we wouldn't go after anyway," Hyatt said.
Matt Nguyen, owner of Worksighted, a Holland, Mich.-based MSP, said it's difficult to know what will happen because Best Buy and mindShift haven't publicly shared details of their strategy yet.
"They've tried to get Best Buy to do all kinds of things in the past. Now they're trying to get into this [managed services] market. I think people off the bat have a bad association or connotation with Best Buy because they haven't been known to provide good service in the past," Nguyen said. "I don't see how Best Buy can [generate] good sales for their new partnership unless they put some big dollars behind it. I just don't see Best Buy being able to talk a customer into switching over to a new partnership."
Mike Jennings, president of BEI, a Reston, Va.-based MSP, admitted he's glad Best Buy bought mindShift because he competes against mindShift in the Washington, D.C., area and he hopes Best Buy will "kill it."
"Big companies tend to not be able to offer the good relationships that [smaller companies] can," Jennings said.
Best Buy has deep pockets to invest into mindShift, but all the dollars in the world won't matter if it can't duplicate the relationships that small MSPs have, said Francisco Segarra, operations manager at BCA, a Miami-based MSP
"I can't say that Best Buy has the same culture, the same multi-cultural [capabilities] that we have in South Florida. Best Buy is there, but we've been in business for more than 20 years and have a more intimate relationship with our clients," Segarra said.
Arlin Sorensen, CEO of Heartland Technology Solutions, a Harlan, Iowa-based solution provider, also believes Best Buy will have minimal impact on the managed services market because it's a relationship-oriented business, while Best Buy relies more on transaction-oriented business.
"I don't believe they can execute the relationship piece of what really controls SMB customers. It may some have impact on some enterprise areas if they go there but at the end of the day, our customers buy from us because they know and trust us," Sorensen said.
Next: Best Buy Could Raise MSP Awareness
One positive aspect of Best Buy is that the company might raise awareness for the managed services market to a broader set of customers, Sorensen said.
"The danger is it's awareness for the wrong reason. I don't know what they're going to do with it. It's sort of like when Dell bought Silverback [Technologies]. They never really did anything with it, at least it didn't seem like it," Sorensen said. "I'm not afraid of what's happening. It could be a good awareness and most small businesses don't go to Best Buy to learn how to run their technology."
Arnie Bellini, CEO of ConnectWise, the PSA platform used by many MSPs, said he doesn't give the Best Buy-mindShift strategy much hope.
"I haven't seen it work yet. When you have a culture of a large company like Best Buy and try to merge that with a relatively small company like mindShift, the cultures clash and the innovation is crushed," he said, adding that he doesn't think small MSPs need be concerned about Best Buy entering the managed services market. "What effect did Staples have when it bought Thrive [Networks in 2007]? They've had success but they've not affected [MSPs]. Thrive is a ConnectWise partner and they're great. But they're not affecting the rest of the IT nation."