What MSPs Should Know About Ricoh's Acquisition of mindSHIFT

The deal’s financial terms — The financial terms of the deal were not disclosed, however, Best Buy acquired mindSHIFT in 2011 for $167 million and the deal was completed in January 2012.

Company’s reasoning for acquisition — Ricoh Americas COO and EVP Tracey Rothenberger said the acquisition will enable Ricoh to expand “customer relationships and IT Services portfolio, and drive value and growth in this space” through “mindSHIFT’s leadership in the SMB space.”

MindSHIFT operations — MindSHIFT will continue to operate under its current name, management team and capabilities.

Growth — When Best Buy acquired mindSHIFT, the company managed 25,000 desktops for 5,400 clients, according to the press release announcing the deal. Today mindSHIFT works with 6,900 clients, according to the Ricoh press release.

Deal’s closing date — The acquisition is expected to close in February 2014 at which time mindSHIFT will become a wholly owned subsidiary of Ricoh.

Deal’s affect on the industry — Does this deal set off the notion that the MSP industry has seen its best days? Should the industry say goodbye to focusing on PC and server maintenance? Will the industry become fixated on managing, monitoring and monetizing customer workloads on public clouds?

Best Buy couldn’t handle the SMB market — Does Best Buy selling mindSHIFT to Ricoh have to do with Best Buy’s inability to handle the SMB market? Can mindSHIFT assist Ricoh with the SMB market?

The challenges of being an MSP — Did Best Buy struggle with the MSP space? If the company didn’t struggle with the MSP space, wouldn’t it have kept mindSHIFT?

Generating enough revenue — While mindSHIFT may have grown under Best Buy, did the MSP bring in enough revenue? Did Best Buy have its own financial problems?

Fulfilling strategic goals, strengthening key areas  — She told MSPmentor that the acquisition will help fulfill some of Ricoh’s key strategic goals that the company laid out for itself in its plan for the years head. “We were very fortunate that the mindSHIFT opportunity really helped us fast forward some of the key areas that we knew we needed to strengthen inside our own infrastructure and solutions for our customers,” Campbell said.

Ricoh’s DNA contains managed services — “We’ve been in IT services for some time,” she noted, but the market has changed. According to Campbell, Ricoh’s approach to managed services has been to build upon well-known Ricoh products in the market — an out-of-date strategy. “That approach would have been way too slow for the pace and change of the current in the market today,” she said.

What mindSHIFT brings to the SMB market  — “With the mindSHIFT organization,” Campbell said, “they had a key focus in the SMB space, which aligns well to a broad base of customers that we have.” She said the acquisition enables Ricoh to offer a turnkey suite of services to SMB customers, adding that it would have taken Ricoh a lot longer to build on its on. “The demand in the SMB space into some of the managed services is going up rapidly,” she said. “It gives us a platform to build future business applications on that are targeted into that market.”

Enterprise customers are moving on up — Campbell said the overall managed services market has seen movement over the past few years. One shift worth noting is how customers are tackling private cloud themselves. “You’ve seen the enterprise customer  really moving toward the private cloud space for themselves, along with on-premise offerings that really require that blended offering,” she said. There’s opportunity in that for a company like Ricoh, she said.

On future MSP acquisitions — “Our eyes are always open and looking across the landscape to see what makes sense,” she said.

mindSHIFT isn’t just another folder in a briefcase — “If we had acquired mindSHIFT with the idea that we’re just going to keep doing what mindSHIFT does — we’re just going to add it in our portfolio — that’s not really adding the value that we can potentially have,” Campbell said. “The goal here is that the whole is greater than the sum of its parts.”