Letters from Monaco (1)

(By Anthony Miller – Tuesday, 5th May 2009 7:00pm). Mon Dieu! Your intrepid analyst finds himself a guest of Switzerland-based banking software supplier, Temenos, at their annual client meet, this year in Monte-Carlo. (Ed: Yeah, I know, it’s tough but someone’s gotta do it.) I’m surrounded by over 400 CxOs from banks and financial services institutions of all shapes and sizes and from all over the world (the banks, not the CxOs. On the other hand...) and it’s just great to get the insight on the sector ‘from the horse’s mouth’.

In fact, TechMarketView is partnering with Temenos to conduct a survey about attitudes towards cloud computing among the CxOs here at the conference. TechMarketView subscription service clients will see the full analysis when we publish the results at the end of the month, but of course we’ll give you all a taster on UKHotViews.

Temenos did not have a very high profile in the UK until mid last year when they acquired Financial Objects (see Financial Objects - Another one hits the dust) in a £27m all-cash deal. According to Temenos’ 2008 annual report, FO’s pro forma 2008 revenues would have been $26.5m with ‘immaterial’ profit.

But that was not Temenos’ only UK acquisition last year. We missed the news that in November they also acquired UK business intelligence software firm, Lydian, for some $5m. Lydian’s pro forma 2008 revenues would have been just under $2m at about 15% margin.

I met up with Lydian’s founder, Graham Goble, today. He used to work at Kapiti, which was acquired by Misys in 1994. When Goble set up Lydian four years later, it exclusively served Misys banking clients, so this is a heck of a coup for Temenos. Lydian was just a 10-man band clearly punching way above its weight. Its flagship product set, Webform, is now rebranded Temenos Insight and has already been integrated with Temenos T24. They say that they will continue to support Misys clients (that’s support as in “would you like to migrate to T24”, I assume!). At the time Temenos acquired them, Lydian had 45 Misys clients. I just can’t understand how Misys let that one get away.

The other ‘big’ news from Temenos today was the appointment of Cognizant as their first global services partner. At first blush this makes sense on both sides. Temenos needed to scale up its implementation workforce and Cognizant needed a banking package to flog. Most of its peers were already well equipped: Infosys and TCS have their own packages (Finacle and BaNCS respectively), HCL and Wipro have partnered with Misys. Cognizant was being left out in the cold. Now, I’m the first to say that partnerships look all fine and dandy on paper but frequently come to nought in practice for any number of reasons, but let’s see if they can put the theory into practice. Temenos hinted at a second global services partnership this year higher up the value chain. For what it’s worth, my money is on Deloittes.

By the way, Cognizant reported its Q109 results today (as did India-based BPO, Genpact). I’ll get back to you on these results in a later posting but I guess the key thing to note from Cognizant is that it is sticking to its 10% revenue growth guidance for 2009 (Genpact doesn’t guide).

More from the conference tomorrow.