Small Business IT: Big Box Retailers Strike Out

How ironic: Staples recently surveyed small business owners about their IT priorities -- even as Staples recently punted on one of their biggest IT investments of all time. It's the latest proof that Big Box retailers -- Staples, Best Buy, and the list goes on -- will never understand small business IT engagements.

The big picture goes something like this: Best Buy, Staples and other electronics retailers want to sell hardware, software and IT support to small business customers. Part of that strategy involved Best Buy acquiring mindSHIFT and Staples acquiring Thrive Networks a few years ago.

Both mindSHIFT and Thrive have ranked among the top so-called Managed Services Providers (MSPs), which remotely manage and maintain customer networks. (For a deep dive on MSPs, check out a site I previously co-launched, built and sold called MSPmentor; a professional information services company called Penton now owns the site.)

Reality Check

The Big Box retailers failed to rapidly scale their remote IT support businesses. As a result, mindSHIFT and Thrive each were sold off to new owners.

So where does that leave us today? Walk into any Best Buy or Staples, and you'll see promotions for PC tuneups, monthly IT support contracts and more. But the services are low-level commodity offerings that often involve lengthy, potentially expensive contracts.

For instance, I recently visited Best Buy's Geek Squad counter, and made a simple request:

  • Please take a close look at this business PC's hard drive;
  • remove all spyware, malware and crapware; and
  • install basic anti-spyware software.

Best Buy's reply couldn't even meet that low-level request in a simple manner. Instead, Best Buy tried to sign me up for a multi-year support contract that cost several hundred dollars.

No thanks.

SMB IT: Billions, Not Millions, Required to Play

As Best Buy, Staples and others dabble in low-end IT support, the cloud continues to come on fast. Consider the situation here at After Nines Inc. We have no on-premises servers. We haven't purchased any on-premises software other than what came preloaded with our Macs and PCs. And all of our applications (newsletters, websites, blogs... and more surprises coming) are running in third-party clouds.

In the vast majority of cases, the Big Box retailers have no IT services that can potentially improve my life. Best Buy and Staples thought they could catch the next IT wave by spending $100 million or less on midsize IT support buyouts. Meanwhile, Microsoft, Amazon and Google were spending billions on their own cloud buildouts. Now, those very clouds are engaging the SMB customers that Best Buy and Staples craved.

Automated Onboarding

Take a closer look and the financial math gets really painful:

  • The big cloud providers mostly onboard in an automated approach. If you're a customer you sign up, select and turn on your services on your own.
  • In the Best Buy and Staples worlds, much of the customer onboarding required manual processes -- a costly, difficult to scale model.

I'm not sure the retailers will ever fully automate their IT customer onboarding. Until that happens, the performance gap between cloud providers and Big Box retailers will continue to grow.