NetStore connects with NetConnect

No job cuts in takeover worth undisclosed sum

After turning its back on the channel for the past year, ASP NetStore has acquired security reseller NetConnect to boost its service offering.

The firm formerly sold its hosted IT services through VARs, but disbanded its channel team in September 2001. The NetConnect takeover restores channel skills to the firm.

NetConnect's brand will be retained and there will be no job cuts, NetStore said. The value of the deal was not disclosed.

David Blundell, vice-president of sales and marketing at NetStore, said retaining the 14-year-old NetConnect brand as well as the company's staff would benefit NetStore.

"NetConnect was living hand to mouth. But we will use our strong balance sheet to invest in NetConnect and grow its business," Blundell said.

He admitted that NetStore's flirtation with the channel failed. "All the analysts said ASP should be indirect and to SMEs, but it was not successful. We have gone back to our birthright of selling direct and to large customers," he said.

NetConnect will remain as a division of NetStore, with parts of it integrated into the ASP. The reseller has a Check Point training division, managed services and integration capabilities.

Clive Longbottom, service director at analyst Quocirca, said NetStore cut its sales and development teams when it struggled to win business for its hosted services.

"The model wasn't working, so it went back to its Cisco back-up business," he said.

Longbottom said NetStore is likely to focus on hosted virtual private networks, and that the acquisition of NetConnect fits this strategy.

"The market for hosted services is starting to pick up," he added.