Article

Best Buy taps Ingram Micro partners for IT service contracts

Nicole Lewis, Senior News Writer

Members of the Ingram Micro Services Network (IMSN) say they welcome potential new IT service contracts resulting from a deal announced Monday between Ingram Micro Inc. and Best Buy Co. Inc. to deliver on-site services to Best Buy customers.

The new program lays the groundwork for the Best Buy Geek Squad to work with Ingram Micro's IMSN partners on IT service contracts, which will mainly focus on offering service and support for server- and higher-level technologies, as well as support for point-of-sale systems within retail operations in areas where Best Buy may not yet have coverage.

"This could scale between your everyday small-business owners all the way up to major restaurant chains or retail stores with multi-city, nationwide locations," said Jason Beal, director of sales for the Ingram Micro services division. "We're talking small and midsized businesses, which gives us a healthy market to target."

According to Beal, staffers at Best Buy For Business (the company's group for handling IT repair services for Best Buy customers) will identify the need, scope out the details and report the request to Ingram Micro. For major IT service contracts, the IMSN team at Ingram Micro will help manage the request and handle the selection and deployment of resources.

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"At the end of the day, this will help generate higher-end service opportunities for our IMSN members, and it will help raise the visibility of the IMSN, which is equally important to us and our partners," Beal said.

Jeff Dudash, a spokesperson for Best Buy, said the company chose IMSN because of its highly skilled technicians.

"We know that our small-business customers value a holistic technology solution, so services play an important role in delivering on their expectations," Dudash said.

"Anything that drives service revenue into our business is important to us," said Mike Novotny, president of Phoenix-based InterTech Computer Products Inc. "So given the opportunity to expand our higher-end skill set service offering to customers that are procuring their equipment elsewhere is always a good move from our perspective."

Novotny's assessment is that for every dollar his company earns, about 40% comes from services and about 40% of that amount (or about 16% of earnings) comes through IMSN.

Novotny also said the IMSN network will bring a higher-quality skill set to Best Buy.

"If you take a look at the skill sets of the Geek Squad, that's pretty low-end elementary technical work. The thing that the IMSN will bring to the table is the ability to tap into a much higher-quality skill set: higher-end network engineers, security, wireless, storage and various vertical areas of expertise that you would not normally find in a retail environment," Novotny said.

"I think this will allow Best Buy to have higher-level engineers," said Jose Rivero, director of services at Synergy Global Solutions of Amherst, N.Y. "As a group, all of us in the IMSN have to perform to a certain level; we have to have a customer satisfaction rating of 4.8 or higher, and all our engineers have to be manufacturer-certified," he added.

Rivero also said 15% of his company's revenue comes from IMSN leads, and he expects this to increase through the Best Buy deal.

Ingram Micro's Beal said that service rates for IT services contracts will stay in line with IMSN's existing formula. However, "We do consult with our partners on what the market will bear," he said.

"For example, major metropolitan areas will likely command higher rates than tertiary markets, say, in the Midwest. Custom quotes will also be provided for large deployments that may go nationwide or require extreme specialization," Beal said.

There will be a phased rollout, with national availability of the network on Oct. 1.

While it is expected that Best Buy for Business will generate revenue for the channel, Beal said patience is required.

"We see this as a growing opportunity but don't expect to be flooded with calls out of the gate," Beal said.


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