NetStore secures EMS acquisition

NetStore is continuing its evolution into a managed service provider after acquiring the loss-making UK managed service business of New Zealand-based software vendor EMS.

The former ASP had previously acquired reseller NetConnect, following its withdrawal from the ASP market.

Under the terms of the EMS deal, NetStore will pay an initial £250,000, with the arrangement expected to cost £800,000 in total. It also gains four employees.

Stephen Bacon, founder of NetConnect, said the acquisition of EMS's UK outfit will suit the NetConnect business, which, although a part of the NetStore Group, is retaining its brand.

"EMS set up business in the UK to demonstrate its software, but with NetStore's resources and NetConnect's experience we can make it work," Bacon said.

EMS had about 15 UK customers but each has a large number of users, he added.

Clive Longbottom, services director at analyst firm Quocirca, said there is a market for managed services in the mid-sized firm sector.

"With players such as BT offering managed services to corporates there is also a need for such services at smaller companies," he said.

"As time goes on and more convergent messaging and voice and data convergence is taken up people will want end-to-end management of these products, including security."

But NetStore needs to improve its marketing, Longbottom said. "It wasn't very good at marketing the ASP model, which is one reason it struggled," he said.

NetConnect's experience in sales will help it to promote managed services, he added.