S1 Corp., an Atlanta-based front-office enterprise solutions provider, has teamed with back-office giant Misys Wholesale Banking Systems (London) to expand its international footprint. Through a five-year agreement, Misys will distribute S1's Enterprise Platform - including the S1 Corporate Banking, S1 Personal Banking and S1 Trade Finance applications - throughout Europe, Africa, the Middle East and Asia. The software will be re-branded with the Misys name in those markets.
Though S1 has made a considerable effort in the last year building its distribution channels internationally, only about 20 percent of its business is currently outside North America. "In many cases we wouldn't have reached these markets anyway, so we can allow Misys to take the lead and manage the customer interaction and entire sale and implementation process," says S1 CEO Jaime Ellertson.
According to Christine Barry, an analyst at Boston-based research firm Celent, the move was in line with recent trends, particularly in the cash management space. "Very few of the vendors at this point have any international presence," she says. "But the U.S. marketplace is beginning to become saturated, and some of the vendors are beginning to look overseas. S1 is one of the few vendors that has any international presence at all with a cash management solution, and this will definitely help in that area."
According to Misys, banks want both to reduce their number of software suppliers and add client-access technology. "We wanted to look at the best way to come to market with an integrated front-end solution that covers the areas of core banking, trade finance and personal banking," says Ivan Martin, CEO of Misys' Banking and Securities division. "Given our huge footprint in the international space, this presents us with significant ability to acquire new customers and the ability to grow our revenues in the shorter term."
The deal allows Misys to make proposals to its existing customer base and also sell front-office solutions to its competitors' customers. "We'll be proposing and hopefully implementing Misys solutions around competitive back offices," says Martin. "Over time, with the integration to the Misys back office, there's a Trojan horse approach to leveraging the back-office processing as well."
Misys is working to provide migration paths to the S1 Enterprise solutions for each of its existing e-banking products, as well as from core Misys systems Midas, OPTICS and Trade Innovation. S1 has already geared its products for the international market - its 2.0 and 3.0 upgrades allow for multiple languages and currency and payment systems. "It's been built from the ground up to be an international product," says Ellertson.
Celent's Barry expects to see more of these arrangements in the future. "Banks are becoming more and more demanding in that they're looking for deeper relationships with their vendors," she says. "They're looking for a single vendor to provide them with all their technology needs. I think that's one of the reasons we'll see a lot more partnerships or even acquisitions in the vendor space."