The ISV industry has seen tough times since it hit the radar as an investors' darling in the 1990s. With cash running low across the board, many software suppliers have been forced to explore different business models or face the prospect of consolidation. FO Week's Annalie Grainger spoke to ISVs, exchanges and users about the prospects for the industry in a changing market.
As exchanges began to go electronic in the 1990s, IT firms
in the industry followed the pattern of the dot com boom,
seemingly able to do no wrong. A wave of independent start-ups
found it easy to garner investment as the market saw technology
providers as the next beneficiaries of the wealth of financial
However, while the number of ISVs rocketed ignoring
long-term profitability and concentrating on short-term market
share was already setting a dangerous precedent for technology
firms. Many ISVs found themselves pushed into the position of
being small fish in a very large pond.
Consolidation became inevitable as too many players fought
for too narrow a market space; over the last year many of those
mergers have come to fruition. Ffastfill acquired Future
Dynamics in July last year, shortly followed by E-Speed buying
Ecco in October. Most recently, Refco purchased EasyScreen in
March this year.
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