Staples, the world’s biggest office products supplier, is jumping into the IT sourcing market offering up security, on-site tech and data back-up services for small-to medium-sized (SMB) businesses.
The move puts the $27 billion retailer shoulder to shoulderwith tech titans EMC (NYSE: EMC), HP and IBM that are battling to increase SMB market share given the increasing demands such businesses are facing in managing, storing and protecting growing data piles.
The new program, called Staples Network Services by Thrive, is a three-pronged offering that includes Thrive Protect (everything from anti-spam to patch management and virus protection), Thrive Onsite (a “dedicated” engineer team for internal tech tasks) and Thrive Online Backup (Web-based data protection and storage at a remote facility).
“This follows the philosophy of bringing Fortune 500-level IT support to small- and mid-sized businesses with an affordable, flexible and comprehensive approach,” Jim Lippie, president, Staples Network Services by Thrive, told InternetNews.com.
According to Staples the cross platform and open source support offered appeal to SMBs that are typically heterogeneous environments.
“We’re finding SMBs have a mix of technologies in house, including Windows, MacOS and even Linux. We have the capability to handle whatever we find at a client site,” said Lippie.
The IT program is the first tech-centric offering Staples has pushed out. Both Lippie and industry watchers said there’s a need for such services.
“Staples has an established history working with SMBs and we understand that technology is playing a bigger part in how small businesses function,” said Lippie, adding that Staples’ ability to augment core services with IT services “makes strategic sense.”
Strategic sense, that is, for organizations no bigger than 250 users and seeking a long-term outsourcing relationship, explained Lippie.
“Our offering is built around a monthly recurring client relationship, in which we partner with our clients to make them more productive. Other models, like [Best Buy’s] ‘Geek Squad’ are about short-term projects and repairs,” Lippie asserted.
The price per PC
According to Staples, a typical client engagement will include all three services at a cost of about $20 per PC. Businesses can purchase Thrive Protect and Thrive Online Backup on a stand-alone basis, with pricing beginning at $10 per 10GB for online backup.
Industry watchers believe small enterprises could benefit from such service offerings for several reasons.
“It certainly appears to be quite a bit more comprehensive than other ‘storefront’ offerings of storage services as they provide both online backup, remote support, and even on-site support for larger companies,” Mike Karp, senior analyst, Enterprise Management Associates, told InternetNews.com.
One compelling aspect is that such comprehensive SMB services are rare, said Karp.
“Historically, the service business has been somewhat better for small enterprise and Staples is able to offer these services in a coherent and integrated fashion rather than as a disparate group of non-coupled functions, which offers potential users an opportunity to develop a strategic approach to outsourcing. I like that,” said Karp.
But as one other analyst noted, big IT players such as IBM and HP already offer similar offerings, as do other retailers. Circuit City, for example, has partnered with FireDog to provide business tech support.
“This is unique in the sense that Staples is truly end-to-end with staplers and erasers all the way to infrastructure management,” Joseph Martins, managing director, Data Mobility Group told InternetNews.com, adding “I’m sure nobody else does that.”.
Still, Staples may find the market a tough move because the retailer hasn’t proven itself as a tech services provider
“Staples is a relative unknown in the IT space. I’m not sure how folks are going to feel about trusting them with their IT. Erasers and printers are one thing, data and information management is another,” said Martins.
Yet the fact that Staples is everywhere logistically they can offer higher availability and response site for onsite support, Martins added.
But that’s also a compelling reason for competitors, such as other office supply retailers, to jump into the IT services pool as well.
“I can see Office Depot moving in that direction. More importantly, I can see Best Buy and Circuit City and the like doing the same with varying degrees of success,” said Martins.
Next Page: Leveraging brand awareness
Page 2 of 2
One pundit said Staples’ brand awareness is key to success.
“Overall, I am impressed by its move as it has brand awareness in small and intermediate sized companies and should be able to immediately capitalize on that brand awareness,” Charlie Burns, VP, Saugatuck Technology, InternetNews.com.
Burns said today’s SMB tech teams are undergoing several transformations, including a ‘do it myself’ to ‘do it for me’ transition.
“Another is an attempt to raise their focus from managing assets to managing delivery of services to support business processes,” explained Burns, adding that the transformations provide a growing market for services such as Staples’.
Such new IT services can be compelling for SMBs for several reasons, according to experts.
The advantage of outsourcing services is that companies have a chance to partner with a provider that specializes in storage and data protection.
“In this kind of scenario the client company specializes in whatever it is that it does best and leaves the specialty of providing storage services to someone who actually specializes in storage technology,” said Karp.
But there are downsides that SMBs should know, noted the industry watcher. One is having to relinquish control over the tech environment. Another is trusting that data will be safe.
“Both of these concepts however will have to be adjusted as businesses come to realize that the decision of where IT services reside has to be based not on ‘IT philosophy,’ but rather on where such services can be most economically provided,” said Karp.
“From where I sit, the bottom line is if it makes good business sense, and if the technology is reliable, it should make no difference what the physical location of the service provider happens to be,” he said.