Hackney moves financials to Netstore-led group in £6.5m agreement

Hackney council has awarded a £6.5m, five-year financials contract to a consortium headed by Netstore in a move that ousts incumbent Oracle from the north London borough.

The UK's Netstore - which was known as an application service provider in the late 1990s - will sub-contract parts of the deal to Cedar, for the browser-based financials software, Hedra Consulting, for business process changes, and Ideal Technology Services.

Councillor Samantha Lloyd told silicon.com: "We wanted to retain control and although we didn't rule out outsourcing dogmatically, we did want to keep competencies internal."

Lloyd, who oversees financial and other systems in Hackney after well-publicised budget crises in recent years, said her team had spoken to other Netstore customers such as the London boroughs of Kingston-upon-Thames and Hammersmith and Fulham. Just over half of Netstore's business is with the public sector.

She added: "We saw an opportunity to innovate and make great leaps forward but we need to feel comfortable with [the consortium members] and they need to feel comfortable with us."

David Blundell, VP sales and marketing at Netstore, said the win is the largest in the company's "modest seven-year history".

Netstore now avoids the ASP tag and calls itself an 'independent specialist outsourced managed application solutions provider'. Whatever the billing, Blundell reckons there will be a movement away from bigger vendors.

"Large buying customers, especially in the public sector, are beginning to favour smaller suppliers," he said. "When you're big, it's hard to be a flexible organisation. We get deep down and dirty with customers."

Oracle declined to comment. The Netstore led consortium will take over in April next year and though there are strict rules about public sector procurement, Hackney said nobody was ruled out at the beginning of the tendering process.

Hackney is running an old, now unsupported version of Oracle software and it is not clear whether a move to Oracle Financials provided on an ASP basis - an area which is increasingly proving money-spinning for the California-based vendor - was ever in the running.