Honey, I Shrunk the Software Market

Over the past decade and even more so since the financial crisis of 2008, the software industry has witnessed substantial consolidation. Nowhere is this more apparent than within the sector that serves investment management. With strong profits, the industry is shopping within, seeking deals using low-cost capital, yet at the same time shrinking choice for the end user.

In our 2013 Industry Perspectives, "Monitoring Vendor Risk: What Should You Be Doing?" we noted several factors that have transformed the investment management marketplace including globalization, product diversification and mergers & acquisitions. It's also important to note that vendor firms have been transformed. Beginning in the 1990's, several rounds of mergers have consolidated the market and served to limit choice, presenting a challenge to managers in selecting a vendor. A quick sampling of companies acquiring other providers in this space over the past several years includes acquisitions of Equipos by Simcorp, Wall Street Office, Thinkfolio and Cadis by Markit, PORTIA by SS&C, PolarLake by Bloomberg, and Omnium by Northern Trust to name a few.

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