Ricoh to Acquire mindSHIFT Technologies, a Leading Managed Services Provider for Small and Medium-Sized Businesses
WITH EXPANDED COMMENTARY BY RALPH GAMMON
Purchase Complements Ricoh’s Current Services Portfolio, Adding Significant Skills and Reach to the Company’s Growing Suite of Offerings
Ricoh today announced that the company has reached an agreement to buy mindSHIFT Technologies Inc., a leading provider of managed IT, cloud, data center and professional services to small and mid-sized organizations, from Best Buy Co., Inc. The acquisition is the latest strategic investment by Ricoh to expand and deepen its services portfolio.
mindSHIFT, a top Managed Services provider in the U.S. for small and mid-sized businesses (SMB), works with more than 6,900 clients in major markets throughout the country. The company’s IT Services capabilities and comprehensive Managed Services offerings will help Ricoh continue to drive value to existing customers through expanded services offerings as well as support Ricoh’s growth as a provider of IT Services.
The addition of mindSHIFT’s nationwide expertise and customer service professionals will bring a wide array of benefits to the customers Ricoh is currently serving through its proven services organization of more than 8,000 specialists.
“With the addition of these highly skilled engineering and customer-facing resources to our existing services organization, Ricoh can now offer a greatly enhanced range of services for its customers,” said Martin Brodigan, Chairman and Chief Executive Officer, Ricoh Americas Corporation. “We are very much looking forward to working with our small and medium-sized customers to maximize these combined capabilities to their greatest benefit.”
“At mindSHIFT, we are proud to have the most comprehensive IT Services portfolio for small and mid-sized business customers in the industry and are excited to become a part of the Ricoh family. With Ricoh’s keen focus on business customers, their leadership position in the small and mid-sized business space and our common philosophy in delivering innovative ways to solve technology challenges, we believe we can deliver even more value to customers together,” said Mona Abutaleb, President and Chief Executive Officer of mindSHIFT Technologies. “We’re excited about what this acquisition means to our customers; the impact of having a well-respected brand like Ricoh tied to our market leadership will bring great benefits to current and new customers around the country.”
mindSHIFT brings their experience in the general business market, in addition to legal, healthcare, financial services, associations and non-profits, and education markets, areas complementary to Ricoh’s proven expertise and experience.
mindSHIFT will continue to operate under its current name, management team and capabilities, which currently include 650 employees at offices in Boston, Chicago, Long Island, N.Y., Minneapolis, Morrisville, N.C., New York City, Philadelphia, Washington, D.C., and Austin, Houston, San Antonio, and Dallas, TX.
The acquisition is expected to close in February 2014 at which time mindSHIFT will become a wholly owned subsidiary of Ricoh.
COMMENT BY RALPH GAMMON:
mindSHIFT Acquisition Fleshes Out Ricoh Services Portfolio
There has been plenty of coverage over the past few years about the trend of MFP vendors diversifying their businesses by expanding software and services offerings. With its acquisition of IKON five years ago, Ricoh did a good job expanding its services, and since then it has continued to increase the scope of both its professional services (PS) and managed document services (MDS) practices. Ricoh recently moved to complement those areas with the acquisition of mindSHIFT Technologies, an organization specializing in managed IT services.
“While we have played in the managed IT services space and made some investments there over the course of the last year, we had nothing that could compare to the strength of an organization like mindSHIFT,” said Tracey Rothensberger, COO of Ricoh Americas Corp., who helped drive forward the acquisition. “While MDS and PS are focused more on larger customers, managed IT services is focused on small- to medium-sized businesses.”
Rothensberger broke down mindSHIFT’s portfolio into four areas:
- managed IT services: includes virtual desktops and management of organizations’ desktops and servers
- cloud services: branded as “cloudSHIFT,” this includes hosted offerings in back-up and recovery, voice-over-IP, and legal services
- data center service: virtual servers and storage as well as co-location services
- professional services: includes advanced application development in the legal space as well as custom SharePoint development
mindSHIFT was acquired from Best Buy, which had purchased the organization for $167 million in 2011. “Best Buy was hoping to make a run at the SMB services market, but shortly after the acquisition, it refocused its business around the retail and consumer markets,” said Rothensberger. Terms of the Ricoh acquisition were not announced.
mindSHIFT brings close to 7,000 clients to Ricoh, as well as 650 employees. According to the Ricoh press release, mindSHIFT will continue to operate under its current name and management team. “We will maintain mindSHIFT as an independent organization, very similar to the way we operate our Enterprise Services group today,” said Rothensberger. “mindSHIFT has locations around the country that we will maintain.
“But, it also has very advanced cloud and hosted offerings that can be sold anywhere, and Ricoh has 2,500 salespeople across 450 offices, plus an extensive dealer network. As a result, adding salespeople should not be a factor in our efforts to grow mindSHIFT’s business. We love the fact that its services and solutions are not tied to geography and have plans to take those offerings into Latin America and Canada as well.”
Rothensberger indicated that Ricoh’s dealer channel has been asking the vendor for more managed IT services. “We think our dealers will love this acquisition,” he said. “If you think about IT service providers in smaller communities offering break/fix services, they don’t have the resources to come up with cloud services like mindSHIFT’s on their own. mindSHIFT even has a white label approach to some of its cloud and hosted offerings that enables it to provision services to partners, like MFP dealers, that the partners can then resell to their customers.”
The bottom line is that the mindSHIFT acquisition is additive to Ricoh’s current offerings. It’s doesn’t seem to overlap very much with the MDS, PS, and MFP hardware/software areas of Ricoh that DIR has traditionally covered. However, as these areas gradually get subsumed into more mainstream IT products and services, complementing them with a managed IT services practice certainly makes sense. It will be interesting to see how everything converges down the road.
For more information: http://bit.ly/RicohmindSHIFTPR