Best Buy to Acquire IBM i Cloud Provider mindSHIFT

November 15, 2011 Alex Woodie

Electronics retailer Best Buy is about to get into the IBM i cloud business. Last week the $50 billion company announced its intent to buy mindSHIFT Technologies, a Massachusetts-based managed service provider (MSP) that has hosted IBM i servers for several years, and launched a public IBM i cloud offering in 2010. The $167 million deal would give Best Buy entry into the burgeoning MSP market for small and midsize companies–and give the Geek Squad some green-screen cred.

mindSHIFT Technologies provides cloud services, data center services, and professional services to more than 5,400 clients and 25,000 desktops in the U.S. The company employs about 500 people in offices in Massachusetts, New York, North Carolina, Minnesota, Pennsylvania, and Washington, D.C., and operates multiple SAS 70 Part II-compliant data centers around the country.

Providing IBM i services is a small but important part of mindSHIFT’s business. The company provides a range of services for the venerable IBM platform, including server co-location, fully managed hosting, public cloud services, disaster recovery and high availability, and remote management.

mindSHIFT is one of just a handful of MSPs around the country that offers access to a public cloud infrastructure based on IBM i servers. The company runs production SAP and Oracle JD Edwards ERP systems on IBM i servers, and also has a partnership with VAI.

The IBM i cloud and IBM i hosting businesses directly accounted for about 10 percent of its $100 million-a-year business, mindSHIFT officials told IT Jungle in an interview earlier this year. Hosting X64 servers, VMware environments, Microsoft CRM systems, Windows desktops, and VoIP environments is a bigger business for mindSHIFT. But the overall effect of IBM i is much greater than that, officials say, because of all the other ancillary management business, or “drag,” that comes with winning an IBM i hosting account.

Best Buy’s acquisition of mindSHIFT is expected to be completed by the end of the year. The intent is to let mindSHIFT continue to operate as an independent unit, next to Best Buy’s existing computer and office equipment services business, including Geek Squad and Best Buy for Business. The deal gives Best Buy a boost in the $40 billion MSP-for-SMBs market, and gives it an edge in the legal, healthcare, financial, non-profit, and education verticals.

“There’s no question that acquiring the skills, capabilities, and clients of mindSHIFT has the potential to help expand Best Buy’s global services capabilities in the vast small and mid-sized business market,” George Sherman, senior vice president of Best Buy Services, says in a press release. “As important, the mindSHIFT team will bring added experience, talent and resources to the remote support capability we have been building within our multi-channel tech service unit Geek Squad.”