Guest Column | February 18, 2014

Prepare For New Competition From Big-Box Retailers, Copier Companies

Big-Box Retailers Compete In Channel

By Alex Rogers, CEO, CharTec

For most of us, we began our journey in managed services for one main reason: the guaranteed, recurring, monthly revenue stream. Over the years, the managed services industry as a whole has been lucky enough to keep the hands of big business out of the money pot, allowing us little guys a chance to stake our claim. Well guys, I hate to say this, but the secret’s getting out.

Major markets have realized the benefits of entering the managed services space even without the background knowledge to do so. So far, three main industries have taken the steps to insert themselves into our market: retail, Telco, and copiers. While Telco doesn’t seem to be picking up as much steam as the other two, it is still an area to be leery of.

When big-box retailers Best Buy and Staples made their moves into the channel through their respective acquisitions of mindSHIFT Technologies and Thrive Networks, we all had reason to worry. While small managed services providers (MSPs) buy other small MSPs every day as a part of continued industry consolidation, the deliberate shift of big corporations moving into managed services is creating a playing field that will make it harder for those of us just starting out to compete. From bigger budgets to even greater brand recognition, big-box retailers have access to the resources, that — let’s face it — private MSPs like us, don’t have. What’s even worse about all this is that now we’ve got a whole new threat to worry about. A Trojan horse is coming in, and swords are drawn, ready to sweep our clients out from underneath us.

Copier companies have always had their eyes on new and inventive ways to break into managed services for the same reason we all began in it: RMM (remote monitoring and management).  So what does that mean for us as MSPs? Direct competition for our SMB clients. Not only that, but now we have to battle against entire fleets of sales teams, not just the neighboring sales guy from a competitor. While we may have our one rock star, they have a whole team of them, and a foot in the back door — because every business needs a copier.

Ricoh, a late bloomer in the copier/managed services game, has recently purchased mindSHIFT Technologies from Best Buy, a potential dynamic move. Ricoh wasn’t the only copier company to break into managed services: Xerox acquired ACS back in 2009, and Konica Minolta acquired All Covered in 2011. Both copier companies now offer their own IT services divisions, and I imagine Ricoh will soon follow. The biggest advantage we have as smaller MSPs is our versatility and diversity. When we get to a prospect site, we have no clue what we are going to see. There could be a number of switches, firewalls, routers, servers, and operating systems. Copy techs only know their suite of copiers, and that’s it.

Companies like OKIData have seen this trend and have helped to fight back from the big copier companies by offering reseller services and arming MSPs with their own managed print solutions to keep those larger companies out of the channel. But as more and more people try to encroach on our everyday MSP, we must keep a careful watch and close eye on our competition — some from new places.