Should Best Buy (BBY), Staples (SPLS) Sell MSP Business Units?Should Best Buy (BBY), Staples (SPLS) Sell MSP Business Units?
Best Buy (BBY) owns mindSHIFT. Staples (SPLS) owns Thrive Networks. Both are leading managed services providers (MSPs). But are they still a fit for the Big Box retailers?
November 19, 2013
Best Buy (BBY) announced a disappointing revenue forecast today. Staples (SPLS) is set to announce quarterly results on Nov. 20, and Wall Street isn’t optimistic. What do both struggling retailers have in common?: They each own managed services provider (MSP) businesses — mindSHIFT and Thrive Networks, respectively — that they rarely discuss publicly. It makes me wonder: Should Best Buy and Staples be in the MSP business at all?
First, the upside: Best Buy’s mindSHIFT business and Staples’ Thrive Networks business are both MSPmentor 501 companies through February 2013 (our current annual survey runs now, with results in February 2014). The financial information we’ve seen through December 2012 — under nondisclosure — suggests that each MSP business has a solid foundation and a strong customer following.
The Silence Is Deafening
Now here’s the problem: Both Best Buy and Staples are struggling to re-invent their Big Box retail businesses. And in many cases, they aren’t doing much to market or promote their solid MSP operations. The most recent examples:
1. Best Buy: During the company’s Q3 2014 earnings call today, the company never mentioned cloud or managed services or mindSHIFT. Not once. Meanwhile, the Geek Squad consumer IT support service got roughly three mentions on the earnings call, during which Best Buy shared a tough holiday outlook.
The mindSHIFT business, which Best Buy acquired roughly two years ago, has made some noteworthy announcements in 2013. But overall, Best Buy needs to crank up the mindSHIFT marketing — especially amid mindSHIFT’s CEO transition from Paul Chisholm to Mona Abutaleb.
2. Staples: The office supply retailer will announce quarterly results on November 20. But even before the earnings results arrive, some Wall Street analysts are raising red flags.
Meanwhile, Staples’ managed services business — called Thrive Networks — has essentially gone silent with its business strategy. Check Thrive Networks’ home page, and you’ll notice that the company blog has not been updated since June 2013. Moreover, Thrive Networks’ own news media center hasn’t been updated since November 2011 — when our sister site (Talkin’ Cloud) covered the company’s latest cloud move.
Rumors and Speculation
In recent weeks, I’ve heard some unconfirmed rumors that Best Buy is shopping mindSHIFT to private equity firms and other potential suitors. Over at Staples, I haven’t heard anything about the Thrive Networks strategy in recent years.
We’ll keep listening and hunting for more clues.
In the meantime I’m tempted to wonder: Would a private equity firm purchase both mindSHIFT and Thrive Networks from Best Buy and Staples, respectively, and then roll up the MSPs into a larger business? That’s speculation on my part. But I do believe private equity firms are poking around the two MSP businesses…
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