Outsourcing brings in bucks

Acquisitions by companies such as Vanstar and U.S. Office Products exemplify how the computer service outsourcing market is booming.

CNET News staff
The booming field of computer service outsourcing has seen a flurry of activity this week.

Vanstar (VST), a leading PC network integrator, disclosed today that it will pay $26 million in an all-stock deal to acquire National Technology Group and expand its outsourcing services in Southeastern states. Vanstar will issue 950,000 shares to buy NTG.

About 600 National Technology Group technical personnel will join Vanstar, a significant step in Vanstar's effort to add 2,000 people to its consulting and outsourcing business.

Separately, U.S. Office Products (OFIS), a fast-growing $2.9 billion office supply company, announced that it's jumping into the outsoucing business by acquiring Bay State Computer Group, an $80 million Boston computer services firm. Terms were not disclosed.

Bay State's operations are centered in New England, but it recently expanded into the New York area. U.S. Office wants to enter the consulting field for wide area networks, local area networks, intranets, and the Internet, adding the Northeast to its existing computer services offerings in the Pacific Rim.

Meanwhile, Softbank Services Group is spinning off Softbank Net Solutions to provide outsourcing for customer transactions on the Web. Both are units of Japan-based Softbank, which is focusing on infrastructure services for the Internet and technology industries.

Softbank Net Solutions will offer turnkey services to let companies outsource customer transactions over the Internet, including purchases, requests for customer service or support, and access to information databases.