Just read this article in the New York Times on BestBuy's Geek Squad. A few weeks ago, when the power supply on my old laptop died, I paid them $59 to move the still-functional hard drive to a new computer. They were all done before I finished my latte from the Starbucks next door. Instant gratification; what could be better?
My neighbor Irakli complained that $59 sounds like a racket for a 10-minute task, but he's an extreme do-it-your-selfer who built his speakers, his track lighting system, not to mention most of his furniture, from scratch. According to Robert Stephens, Geek Squad's founder, in many cases what his customers pay for is simplification.
Even Home Depot, whose core customers are DYI fans like Irakli, is increasingly catering to the do-it-for-me crowd. Its website now features 30+ installation services. And Stephens sees potential among a third group that he calls the "I thought I could do myselfers", or users who rethink the possibility of hiring an expert after running into unexpected stumbling blocks.
So I disagreed when Howard Park from GI Partners said that his new investments (ThePlanet and EV1Servers) belong in the unmanaged web servers market. In fact, I would argue that such a market doesn't really exist.
There are dozens of companies that offer web servers for lease with limited tech support. And tens of thousands of budget-conscious website owners who use their services. But a vast majority of these customers did not sign up for the love of installing firewalls and updating operating systems.
The lack of support is not a feature that users demand. It's simply a fact of life for those who need significant amounts of bandwidth and storage space at affordable prices. While some site owners do develop competency for server administration tasks, and others hire staff or find third party consultants, I think even the most technically advanced user would appreciate a safety net. All things being equal, customers would surely choose a hosting facility with paid help on demand, rather than a data center in which no such option is available?
There are no fewer "I thought I could do myselfers" among web hosting customers than in BestBuy stores. Their needs have not been met at many hosting facilities because their service providers don't have the resources to build a Geek Squad like support infrastructure. But GI Partners comes with institutional capital - and a mission to professionalize the industry. In which case, I hope they'll follow BestBuy's example instead of accepting the status quo.
By the way, the Geek Squad's Robert Stephens calls service "nothing but a profit center". He says more and more customers are asking his staff for advice on what technology products to buy. Of course, each product purchase creates a new service sales opportunity. Doesn't that sound like a good path to positive ROI?
Comments