We’ve long held the belief that reference data is the market segment where the action is. But we weren’t prepared for the onslaught of corporate activity that we’ve witnessed in the past two months.
First, SunGard swooped down on Fame. SunGard is widely known as being an aggressively acquisitive entity, and upon reflection its interest in the reference data management area is obvious: it has a multitude of application products – peers and competitors – that need the glue of a standard data interface. Fame may end up playing a strategic role in the development of a more cohesive SunGard overall, in what could turn out to be a shift from the company’s tradition of a loose collective of often fiercely independent entities. Next, IBM swooped down on Dresdner. Well, almost. In more of a flip than a swoop, IBM took over Dresdner’s data management function on an outsourced basis and in the process acquired a reference data management platform of its own, code-named Project Greenwich, although the system was based on underlying technology from Dutch specialist Asset Control. The transaction underscored IBM’s commitment to the reference data space – no mean feat given IBM’s traditional difficulties with focusing on very narrow (for IBM) financial technology business segments. Now, Capco has swooped down on Iverson Financial Systems. As we report, the acquisition makes a lot of sense for Capco, giving it a product line and a fully operational data management outsourcing function. Iverson, meanwhile, gets the resources and support it needs to expand into Europe and elsewhere, and to gain credibility for that outsourcing function. Aside from the functional and business benefits gleaned from these transactions by their participants and, of course, their clients, this sudden rush to acquire points to an equally sudden realization of the strategic importance of clean data. Here at A-Team, we’ve been espousing the concept of ‘bad data in, bad data out’ for some time. But the mantra isn’t ours. As observers of this fast-changing marketplace, we’ve picked up the sentiment from the growing number of industry participants who realize that their applications are only as good as the data they feed into them. Of course, all this corporate activity could be construed as an overdue consolidation. Too many small fry have been cluttering up the market-place for too long, and this spate of acquisitions is merely a cleaning ex-ercise that brings the balance back to a sense of equilibrium. We don’t think this is entirely fair. In the case of the examples cited above, Fame, Asset Control and Iverson have been around this marketplace for many years and can lay claim to having done pioneering work, each in its own way. The point is that while there is a healthy number of vendors vying for business in data management and, increasingly, corporate actions automation, the overall landscape is nothing like, say, the glut of me-too services that cluttered up the financial information space at the height of the dot.com era. This is not a bubble.
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