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 markets.
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.
Luke Ahern,...