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Despite an increasingly bleak economic picture at home, several Ireland-based financial technology providers are reporting rising revenues for 2009. Experts note that Ireland's financial technology providers sell almost exclusively outside of the country, which currently is facing a more intense financial crisis than most of the European Union.
According to the Irish Software Association, an industry group that represents almost 200 technology firms, nearly one-third of which serve the financial sector, indigenous Irish software firms will barely suffer from the pronounced financial crisis in Ireland because theirs is the world market, not the Irish market. "Ireland is a teeny market for indigenous firms," says Pat Brazel, outgoing chairman of the association. "Irish events haven't made a difference to Irish technology firms." (Brazel apparently has enough confidence in the sector that he recently started a Dublin-based company offering software for individual stock investors.)
Two Dublin-based financial technology vendors contacted by BS&T were largely of the same mind as Brazel. Norkom Technologies, a provider of fraud detection software, and Vordel, a Web services provider specializing in XML network management, both say their revenues have increased in 2009. Each derives less than 2 percent of its sales from Ireland.
Vordel, a privately held firm, says its first-quarter revenues this year are "on target" to double last year's totals. Meanwhile analysts predict that Norkom will end its financial year with revenues up by between 17 percent and 22 percent.
Although just 1 percent of Norkom's revenues originate from Ireland, CEO Paul Kerley says the Irish crisis is having an adverse effect on the firm. He explains that international investors are undeservedly wary of Ireland, lowering Norkom's stock value and raising its cost to issue corporate debt, thereby hampering acquisitions it might otherwise make.
While established Irish technology providers are weathering the crisis relatively well, new IT firms looking for start-up capital face a greater challenge. "Pray!" advises Cathal Friel, a founder of Dublin investment bank Raglan Capital, when asked about the best way for Irish tech start-ups to secure financing.