In Search of Help

By RAYMUND FLANDEZ

When it comes to IT, small companies usually look close to home for help. Most of them can't afford to hire a full-time tech staffer, so they find a local firm to set up their computer systems and take care of problems as they arise.

Now large national chains are making a grab for that outsourcing business. They're setting up service programs geared toward small and midsize firms, promising a greater breadth of services, at a lower cost, than local competitors.

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CM IT Solutions Inc., a national chain that has handled IT outsourcing for more than a decade, recently introduced a streamlined service package aimed at small and medium-size businesses. Best Buy Co. has set up small-business stores inside many of its outlets, offering consultation, installation and service deals. Dell Inc. sells service plans to small businesses that buy its hardware, and provides tech tutorials on its Web site.

Another company, OnForce Inc., is approaching outsourcing from a different angle: It has created an online marketplace where small businesses can see lists of tech providers in their area and solicit bids for jobs.

Getting Into the Game

The big companies' renewed interest in small business is easy to understand. Small businesses make up the vast majority of U.S. companies, and most of them need tech help. Only 3.5% of companies with five or fewer employees have a full-time IT staff, and only 4.2% of companies with fewer than 10 have one, according to IDC, an information-technology market-research firm in Framingham, Mass. And more than two-thirds of small businesses already outsource some part of their IT services and support needs, according to a 2006 survey by AMI-Partners Inc., a technology research firm in New York.

One of the first national chains to focus on outsourcing for small and medium-size businesses was CM IT Solutions. Founded in 1996, the Austin, Texas, company now has about 80 franchises around the U.S. In January, CM IT launched a new program -- CMIT Marathon -- designed to simplify its offerings for small and medium-size businesses. Under the basic version of the plan -- costing $339 a month -- the company advises clients on what IT equipment to buy and then provides regular monitoring and repair services. A more elaborate plan, costing $1,195, includes unlimited telephone and remote support.

Jeff Connally, president of CM IT Solutions, says that the pricier service costs less than half of what a small business would pay for an internal IT worker, about $4,000 to $5,000 a month. The company also stresses its reach. CM IT can tap a national network of experts to help on complicated IT jobs, the company says, and its size gives it much better purchasing power than a local firm.

But CM IT faces stiff competition from some big rivals that can trade on well-known brand names. First, there's Best Buy. The Richfield, Minn., retailer took a big step into IT support in 2002, when it bought Geek Squad Inc., which provides computer services to residential and business customers. Now Best Buy has about 12,000 Geek Squad agents nationwide, based in Best Buy outlets as well as specialized Geek Squad locations.

For many small firms, Geek Squad has already become a de facto IT department. Now Best Buy is making Geek Squad part of a larger small-business strategy called Best Buy for Business.

Here's how it works. Hundreds of Best Buy locations now feature a "store within a store" aimed at small-business customers, staffed by salespeople trained in start-ups' IT needs. Customers can get a free on-site consultation and recommendations about their IT setup. If the small-business owner buys the recommended equipment from Best Buy, either Best Buy for Business associates or Geek Squad will install it.

Best Buy also offers small-business service contracts. A fixed-price version provides an agreed-upon number of hours with Geek Squad agents each month to handle issues such as checking servers and networks and updating hardware and software. Best Buy says the price varies depending on the client's needs. There's also an a la carte plan; setting up a PC would cost $159, for example.

About 300 of the 800 Best Buy outlets nationwide have Best Buy for Business locations, and by year's end about 600 will offer the service. In its sales pitches, Best Buy, like CM IT, stresses its size advantage. Geek Squad, it argues, can offer a greater breadth of knowledge than local service companies, as well as round-the-clock service. And Best Buy says it offers a greater choice of products and deals than a local supplier could.

Dell is also stepping into the services arena, trying to capitalize on its hardware's popularity among small-business owners. In January, the Round Rock, Texas, company unveiled the Web sites Small Business 360 (dell.com/sb360) and Studio Dell (studiodell.com). The sites provide technology how-to guides for small businesses, such as explaining servers and networks. Of course, Dell products are featured prominently on the sites.

Dell also offers a range of service plans for its products that are focused on small business. The company provides phone-based troubleshooting and same-day on-site hardware support, which might include installation and network-assessment services. The costs for these services vary. DellOnCall phone-based support costs $129 per session, or customers can buy four sessions in advance, to be used within a year, for $239.

Dell stresses its advantage as a one-stop shop for hardware and service. Customers, for instance, can order their PCs with special configurations that suit small businesses. The company also plays up its expertise in troubleshooting its own hardware.

Thinking Locally

Can the big names live up to their big promises? They most likely can offer a greater range of services than local firms, and their relationships with large vendors such as IBM often bring better hardware pricing. On service pricing, though, it's harder to say whose prices are better, since there are so many different jobs involved and prices may vary widely by location.

Still, some small-business experts argue that start-ups shouldn't turn to big chains for their needs. For one thing, these experts say, some small businesses in specific industries such as financial services, where IT is central to core operations, may be better served by biting the bullet and hiring an internal IT pro.

And if a company's needs aren't that complicated, these experts say, local tech firms are a better bet than big names. Small-business owners using a big chain to serve their IT needs may not be aware of other options, says Andrea Peiro, chief executive and founder of the Small Business Technology Institute of San Jose, Calif. "In every local market, there's a vibrant community of IT vendors."

What do local companies offer that big ones can't? Local companies tend to be more flexible and provide better customer service in order to build loyalty, their advocates argue. A big part of the equation is continuity. Boosters say that local companies are more willing to offer customers advice on a regular basis, instead of just stepping in when something breaks. Customers also know that they'll be talking to the same techie every time they call for help -- and that techie will know their setup and history in detail.

Clients "want to work with the same person that came out last week," says Ron Horning, owner of RJ Technologies LLC, of Tallmadge, Ohio, which has served northeast Ohio for about 15 years. "They get comfortable with that person."

One national company -- OnForce -- is trying to make it easier for small businesses to find local service firms. This online marketplace lets a small business place a work order -- for instance, installing software on 100 new computers -- and propose a price. Local tech providers can either accept, reject or counter that price. In 2006, OnForce says, it completed more than 300,000 work orders.

OnForce, of New York, says its site lists more than 10,000 IT providers scattered across the country. Providers that want to be included in the service must register and provide references, and OnForce checks the newcomers' IT certifications. (OnForce collects $11 from the service buyer for each work order placed, and when the work is done and approved by the buyer, OnForce takes 10% of the fee.)

Paul Nadjarian, OnForce's senior vice president of marketing and product, says the service allows small firms to "get immediate access" to local IT support and "get it at a market price."

Write to Raymund Flandez at raymund.flandez@wsj.com