SIA SHOW: Exhibit Hall Shakeup

A lot has changed since the Securities Industry Association's Technology Management Conference and Exhibit last June -- and much of the change is reflected in the vendors exhibiting -- or more importantly, not exhibiting, this year. Over the past two years, the financial-technology market has been hard hit by trying market conditions, the dot-com bust, the Sept. 11 tragedy, as well as numerous accounting scandals. Thus, many vendors have acquired others, merged or have gone out of business altogether.

The result is an SIA show with quite a different look. The show has 87 new exhibitors out of a total of 255, compared to last year's 250. Noticeably absent from the landscape this year are vendors such as Blackwood Securities, Bond Express and Codexa Corporation. Some of the vendors that will not be represented independently, because they have fallen prey to acquisitions, include Bridge Information Systems, a stalwart SIA exhibitor, and the much touted peer-to-peer network company WorldStreet. Other veteran exhibitors that have dropped off the roster in the last two years include Optimark, TanTau Software, New Era of Networks, as well as a number of dot-com companies. Bridge Information Systems made headlines at last year's show as a result of its recent acquisition by long-time competitor, Reuters. The Bridge products are still being supported under the Reuter's umbrella. And WorldStreet Net was scooped up by Thomson Financial in February.

On the wireless front, TanTau Software, a company with a wireless-Internet platform, which exhibited in 2000, was acquired by competitor 724 Solutions. 724 is on the roster this June, and like most wireless vendors today, has been facing a difficult environment. Larry Tabb, vice president of Securities Investment Practice at TowerGroup, notes that individuals aren't as self-empowered as they once were. "If they aren't trading as frequently ... there is much less demand for trading in a wireless world." Still, TowerGroup believes in wireless-financial services, but emphasizes that it will take a few years to catch on. Despite future promise, some of the casualties in this sector since the last SIA show include w-Technologies and Xigo.

Another surprising failure came in May when Blackwood Securities filed for bankruptcy. The bankruptcy filing came after a huge push at last year's SIA show where the company touted itself as a direct-access-brokerage firm of the future. Now Blackwood is trying to recreate itself as a full-time technology vendor, but is not on this year's exhibitor list. In a similar retreat, Optimark, a household name two years ago, and SIA exhibitor, shuttered the doors of its institutional-trading platform, but since has been trying to recreate itself as a "financial-exchange products and technology provider." "As for Optimark turning into a solutions provider, we will have to see how their new strategy works out. Many of the unsuccessful e-trading firms ... miraculously turned into solutions providers with little success," notes Tabb. He adds that Blackwood and Optimark are in good company as "over the last two years 150 electronic-trading systems were in similar shape."

In addition, telecom companies will be hard to find in this year's exhibit hall. After displaying their wares for at least two years, Hitachi Telecom (USA) will not be present at the show. And looking back to 2000, other telecoms that are no longer on the roster include ASC Telecom and Enron Broadband Services. Tabb notes that, "In this sector, even the traditionally strong players such as MCI, Quest, Sprint, Lucent and AT&T have been hit very hard by the shakeout in the telecom industry. The industry will continue to be troubled until capacity shrinks or demand increases." Quite surprisingly, Global Crossing, which is amidst bankruptcy proceeds after over-investing in its network, is still spending money to be on the SIA roster this year.

Another segment that has faced major consolidation, as well as failures, in the last year is the bond-trading-systems market. BondExpress, a private-label bond-trading system owned by ValueBond, exhibited last year, but will not make a repeat performance this year. BondExpress is still a live product of ValueBond. However, some bond-trading systems have not been so lucky. In the last year, 20 bond-trading systems have closed up shop including BondBook, Visible Markets, State Street's BondConnect and Tru Markets.

Let's not forget the dot-com bust. In 2000 and 2001, there were still a few dot-comers exhibiting. This year, there are next to none. TheStreet.com, goinvest.com and windowsonwallstreet.com all exhibited in 2000 and have fallen off the roster. Others, such as Zantaz.com, TheBeast.com and Netik.com have simply dropped their .com suffix and will return this year. (TheBeast.com renamed itself The Beast Financial Systems).

Despite the many companies that are no longer making an appearance at this year's show, the news is not all bad, as the show is still full to capacity with 255 vendors, according to an SIA spokeswoman. Despite the many companies that have fallen by the wayside, there is plenty of new blood coming in this year. Some of the 87 new exhibitors include: direct-access vendor Lava Trading, anti-money-laundering systems provider Mantas, digital-recording-solutions vendor Nice Systems and FIX-vendor Cameron Systems.

Which vendors have done the best job of weathering the storm? According to Tabb, "The large core systems vendors, such as SunGard and ADP, have not only weathered this storm, but, I believe, have come out looking better than before ... These big players have not only proven that they will be around (in years to come) but have also been working diligently to round out their offerings and integrate them as well." Tabb cautions that he also foresees a new wave of smaller vendors popping up in the next few years "as the ranks of the unemployed technology folks grow." Areas they will focus on? Web services and Linux, Tabb predicts.

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Disappearing Act
2000 Exhibitors

Primark & A-T Financial < Acquired by Thomson Financial
TanTau Software < Acquired by 724 Solutions
New Era of Networks < Acquired by Sybase
Optimark < Shut down its institutional-trading network
STC < Changed its name to SeeBeyond

2001 Exhibitors
The Beast.com < Changed its name to The Beast Financial Systems
Netik.com < Changed its name to Netik
Bridge Information Systems < Acquired by Reuters
WorldStreet < Acquired by Thomson Financial

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New on the Roster -- 2002

* Call Compliance
* Bull Run Financial
* FaceTime Communications
* Flume Data
* ILOG
* Jovus
* Knobias
* Lava Trading
* HelioGraph Ltd.
* Harco Technology Ltd.
* Interface Software
* KX Systems
* ION Networks
* Financeware
* Ecowind Inc.
* Mercury Interactive
* Research Summary
* Solid Data
* SmartServ Online
* Simcorp