Wednesday, March 28, 2007

Best Buy Shifting Strategy ??

Interesting move by Best Buy yesterday purchasing Broadband provider Speakeasy.. Seems like a decent move towards the SMB market.. It will be interesting if SMB's will embrace this change and more importantly will Best Buy be able to sell this new image??
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Can Best Buy become your IT shop?

Posted by Larry Dignan @ 7:24 am



6 votes


Best Buy bought Speakeasy on Tuesday for $97 million in another move to become the IT shop for small businesses.

Speakeasy offers broadband voice, data and IT services and will sit inside the Best Buy For Business Unit. Best Buy is aiming to be a one-stop shop for small businesses. If you add up Best Buy's recent small business moves–coupled with its Geeksquad unit–and it appears the company is taking a detour to become an IT service provider of sorts.

"With Speakeasy in our portfolio, we are better equipped to provide our small business customers with one-stop shopping for all of their technology needs. Our goal is to provide small businesses with the resources they need so that they can focus squarely on their customers instead of on technology," said Darren Jackson, Best Buy executive vice president and CFO, in a statement.

Simply put, Best Buy may start looking like a value added reseller. At the least, Best Buy could encroach on CDW's turf. The company already has a decent base since 32 percent of its product revenue in fiscal 2006 was home office gear.

Best Buy is looking to services and international stores to fuel its future growth. And Best Buy already has the service provider lingo down:

Best Buy For Business technology specialists help small business customers understand how technology can improve their companies, offering business-class technology products and solutions. Customers can engage Best Buy For Business through locations within 281 Best Buy stores around the country, via the web at, and over the phone.

Hmmm. Sounds like a reseller.

Among Best Buy's recent moves:

  • In October 2006, Best Buy hired David Hemler away from Microsoft to be vice president of sales and operations. At Microsoft, Hemler was regional vice president of the small midmarket solutions and partner group.
  • It has expanded Best Buy For Business to 266 stores in the U.S. as of Dec. 12, up from 173 stores a quarter earlier.
  • Bolstered its ranks of Microsoft-certified professionals to 400.
  • Had a strong presence at FOSE 2007. Stanford Financial Group analyst Jeremy Grant said Best Buy "is attempting to make a big play into the federal technology resellers market."

Best Buy doesn't break out sales for Best Buy For Business, but management has made it clear that it's one of the company's priorities. The company's moves definitely warrant watching. Perhaps more color emerges when Best Buy reports earnings April 4.

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1 comment:

Dan Pickett said...

This is completely the wrong direction for Best Buy - I would never let the Geek Squad touch my personal computer let alone my work computer. These department stores really have to understand their boundaries and where there's room to grow.

They're services are overpriced, and I'm generally disappointed in the hardware they have on the shelves. Stick to TV's and Video Games, Best Buu