The 1999 SIA Technology and Management Conference held in June was a great success. Numerous vendors were crowded into every corner of the Hilton Hotel in New York City. Attendees included everything from information providers to flat screen manufacturers to risk management software makers, and just about everything in between. Somewhat akin to an open market itself, with each exhibitor audibly vying for attention, the conference could have been somewhat overwhelming if you didn't know quite what you were looking for.
Still, as the impact of technology on the trading industry increases, interest in the SIA Technology and Management Conference will grow as well. With more vendors than ever before, and with participants reporting increased traffic, this year's conference was unquestionably one of the most successful.
Separating Yourself From the Competition
As the popularity of the conference grows, and more and more companies look at it as an opportunity to showcase their products and services, space comes at a premium, making it increasingly difficult to stand out from the crowd. This is true of the technology market in general. With a large number of vendors plying many products to the trading industry, there was plenty of overlap at this year's conference. As Leslie Owren, director of marketing services, at ITS Associates, Inc., confirms, "With over 200 vendors, standing out from the crowd can be very tough."
One of the biggest challenges these companies, both the new ones and the more established ones face, will be separating themselves from the pack. Rick Cunningham, VP of sales and marketing at The MacGregor Group, suggests, "People are looking for a clear choice, or a market leader. New entrants to the market may carve out enough clients to sustain being alive in the business, but the majority of the people coming to the market looking for some type of solution are going to look at the clear and safe choice, and that's the market leader." As time goes on, it is doubtful that there is a large enough market for all of these competitors to last.
The survival rate for these new companies may depend greatly on how quickly a company or product can develop and entrench itself into a niche market. Sometimes, however, value can be added by moving beyond one particular specialty into more broad offerings. John Albert, Chairman of the Wall Street Source, an institutional based equity service, has decided to offer a broader selection of features. "Everybody tries to be a niche player in certain little markets," says Albert. "We've seen all these niche players and combined these things into one area. We have adopted a model that builds more and more products into one, to give people the benefit of a less expensive, quicker, much more user-friendly interface."
Many of the conference vendors have devised techniques that they plan to use to ensure their longevity in this crowded market. Like much of the financial services industry, words like value and service are cornerstones to any successful company, and this is no different for the technology companies present at the conference.
One of the most important marks for a company will be its ability to adapt. The industry is changing at such a rapid pace, that the scalability and connectivity of systems have become some of the most important features of any new technology product. Brook Teeter, senior manager of sales and marketing at Indata, notes, "There is tons of overlap with the major vendors out there. But if someone needs a system to be tweaked here and there in order to fit into their model of business, the company that can offer that customization, and that can handle that better and more efficiently, will be able to separate themselves from the crowd." This type of functionality is the type of thing that will allow some companies to differentiate and stay ahead of the pack. Yet, it will not be easy, as the fierce competition intensifies.
Showcase Event
One benefit of this conference is the opportunity it affords companies to showcase new products or to disseminate information on events such as new mergers or initiatives. Cunningham explains, "This was one of our first public appearances post-acquisition of the Beren Financial Group from ADP. We were able to communicate to clients, consultants, prospects and other vendors in the community, why we acquired Beren and why it made sense for us. We were able to give people a clear understanding and message of what we've done and what we'll be doing moving forward." Getting information like this out to the marketplace in other ways, could be very time consuming and expensive. In the conference forum, company representatives are present to clear up any confusion or questions that visitors may have about a particular product or merger.
Being able to disseminate information in the conference format to such a receptive audience is something that participating firms do not take for granted. "We were using the conference as a showcase for our product, and it is nice to have a targeted audience be able to see your product all in one place in a matter of days," observes Ken Pommerance, of IFN. "It would have taken us a long time to get to that same marketplace on a direct sales basis." The conference is an extremely efficient and effective way to inform the marketplace about new products.
Along with showcasing new products the conference allows firms to stress the importance of existing products. Michael Croy, director of product marketing at Comdisco, a risk-management firm, says, "At the conference, we showed our full suite of product lines, everything from mid-range recovery and desktop recovery through mainframe recovery, what we call our work area solutions."
Most companies take advantage of the opportunity to do both, showcasing whole product lines, while revealing how new offerings fit into their suite of services. "Along with our suite, we were showcasing a new sequel version of our back office, completing the cycle of what we consider straight through processing," relates Teeter. "That's really what we wanted to emphasize, along with some of the FIX capabilities." Through demonstrations visitors can learn a lot about these complex products.
With such a large amount of industry people at the show, companies cannot afford to miss out on the opportunities available. Owren proclaims, "The SIA show is one of the industry shows that people feel they need to attend if they really want to learn more about technology in the securities industry. We were showing existing products and introducing a new product called TIARA. The conference is a great opportunity to introduce a new product to the market." As the market becomes increasingly crowded, seizing these opportunities becomes even more critical.
Issues in the Air
With this year's conference entitled "Beyond Y2K," you can bet that the millennium was still on people's minds. Croy, of Comdisco, maintains, "People at the conference were looking, in particular, at things that are triggered by Y2K. People want to be prepared for all sorts of situations." The industry, however, is confident that it has prepared well for the Year 2000, and has begun to look past that date towards some of the other ambitious initiatives on the horizon.
Issues such as further shortening the settlement cycle to one day (T+1) and straight through processing (STP) were two of the most talked about issues at the show. One product that was particularly popular was FIX Protocol, a product that will greatly ease the processes of T+1 and STP, by standardizing order messages. "With FIX Protocol and everything else, people are really starting to expand and see what buy side systems can do for the broker side," says Teeter. "It seemed like somewhere in the conversation somebody always asked for FIX, and whether or not that particular prospect was ready to implement FIX, it's still in the back of their minds, as a buzz word." Anything related to T+1 or STP received a lot of attention at this year's conference. As Owren reports, "The big three issues of this year are STP, T+1 and risk management. These are the next hurdles for the industry."
The big showing in the Risk Management Pavilion proved that managing risk is another issue, weighing heavily upon the minds of those in the industry. "Risk management is a trend in the market and for all business," claims Croy. "If you take any of the major financial corporations that were at the show, every single one of them, no matter how big, has a group that is looking at risk management." No matter what the size of a firm may be, the potential for disaster, whether instigated by Y2K or other less-hyped problems, is very real.
Risk management has been showcased at the SIA Conference before. Two years ago, there was a similar showing. Teeter contends, "I think that people have always been thinking about risk management in one form or another, with different analytics products and different ratios and calculations." This year's reappearance of risk management as a major issue in the industry received a lot of attention from visitors and vendors alike. "With Y2K," holds Teeter, "there may have been a greater need for those types of products this year." Risk management firms have seized the opportunity, by capitalizing on and prospering from the anxiety brought on by Y2K.
The Audience
Another benefit of the show is the level of involvement of the attendees at the conference. The audience is intelligent and knows what they are looking for. Cunningham, of The MacGregor Group, found that visitors to his booth were well prepared. "I think that in our niche, within the order management community, people specifically know that they're looking for a solution and they do seek you out," he claims. "Most likely, people have had an incident or need to automate or are considering T+1, which is a concern. These people like to go to the SIA show because all the various vendors are under one roof."
Because of the high priority that firms are placing on technology, the conference is also seeing a greater representation of more influential shoppers. "We felt that the SIA conference was well attended and that a lot of the people that came by our booth were fairly serious prospective buyers," declares Owren. "This year brought a good number of potential clients, some were also decision makers."
Information is also having an effect on the conference. Attendees come in knowing more about the companies and products that are available on the market. "From what I saw, one of the key differences between this conference and other conferences like it is the direction of the attendees," says Croy. "They came in knowing what they wanted to see, knowing what questions to ask and what to look at. An educated audience is the best that any vendor can hope for." With the Internet dominating the widespread dissemination of information about technology in the securities industry, we can only expect consumers to become more and more knowledgeable about the products and services that they are looking to obtain.
Forging Connections
Not only does the conference offer companies the opportunity to prospect with clients, but it also offers firms the opportunity to prospect with each other. Getting such a wide array of service and product providers under the same roof is not a common occurrence. As difficult as it is for customers to keep up with all the new products out there, it is just as difficult for providers to do the same. Part of a company's success depends on knowing the markets fully, and recognizing their competition and how other vendors and products fit into their clients' businesses.
The conference offers a tremendous opportunity for firms to catch up on these issues. Not only can firms identify the competition in their area, but they can even plant the seeds for partnerships and for learning about how they fit in to the overall financial services picture. "One big key at this conference, which I found to be as much of a plus as all the attendees, was the vendor interaction," insists Croy. "The interest that other vendors showed in each other's products, not from the standpoint of competition, but from a relationship standpoint was great. It is important to create partnerships and understand the interplay of each other's products on their particular niche within a marketplace." Firms that keep their eye on how competitor's products play into their customers' usage will help them gain insight into how they can distance themselves from the crowded market.
Goals Preparation and Strategy
Different companies continue to take different approaches to the conference. For some firms, the conference provides a phenomenal opportunity to get their name out there and get some much-needed exposure. New firms continue to use the conference as a springboard for their business, using the conference to make connections as well as actually solidify contracts. "The show gave us a tremendous amount of credibility, " states Albert, of the Wall Street Source. "It solidified a lot of deals that we were working on and it introduced us to an incredible amount of new and potential customers. You can't buy that kind of advertising. Because you have everybody in one room, you meet a lot of people, you get a lot of exposure and people really start to know who you are." Newer firms can thrive from this type of exposure.
Larger firms, like Nasdaq, however, use the conference exclusively as a public relations opportunity. Christina Vassil, senior marketing associate, at Nasdaq-Amex, confirms, "We have been showcasing at the conference for almost 5 years now, and we attend strictly for PR purposes." The more established firms spend their time focusing on getting information out and solidifying relationships with customers. "One of our goals this year was to provide information about the Optimark initiative, and to disseminate information about the upcoming decimalization preparations," continues Vassil. "We actually had decimalization representatives in the booth ready to answer questions. Surely, having hot dogs at our booth didn't hurt, because while people were waiting in line, they did ask questions." All the vendors at the conference can benefit from the ability to meet with customers, and personally answer their questions and concerns. Vassil adds, "We thought that the conference was very successful, simply because we got to talk to our customers face to face."
Preparation Pays Off
While everyone has a different approach to the conference and different goals and strategies, it is important that participating firms do engage in some forms of preparation in order to exploit the opportunities of the conference to their full extent. "Each exhibiting company has to do some level of marketing on their own behalf to make sure that people are aware that they are going to be there," says Owren. "ITS Associates, Inc. did some pre-mailings to our own prospective buyers and our target market."
Other firms employ different strategies. Teeter holds that, "It's important to get out into the trade publications and let the public know what your products are. You've got to know the buzzwords of the time and the current issues to try to mold yourself to what the industry is looking for, like STP and FIX. If people recognize that you are involved in this, they are more inclined to stop by and figure out what you do." While most people attending the conference are seeking out certain companies or types of products, the added marketing push can help bring more people into your booth.
It is never too early to start, as we learn from Michael Croy. "We have already begun the planning for next year's conference," he boasts. "We are looking, not just to expand our booth, but also to expand upon what we offer at the conference. We want to bring in some higher level executives and create the opportunity for vendors and prospects to create new relationships with Comdisco." You can be sure that companies will be letting their creative juices flow freely in hopes of attracting more attention at next year's conference as competition among vendors intensifies.
Impressive
All in all, this year's show was a huge success for almost all of the participants involved. Everyone that this reporter spoke with expressed great enthusiasm at the ample opportunities that the show provides. "I was very impressed with the conference and I think that it was one of the most worthwhile weeks we've spent at a trade show in a long time," raves Croy. "The amount of traffic we had through the booth and the conversations I had left me feeling very positive not just about where we are in the marketplace, but also with the direction of business today." Vendors received great product exposure and learned a great deal about the products that are out there, and the features and functions that people are looking for in their particular field.
Vassil of Nasdaq-Amex, agrees, saying, "We really enjoy the show because we are surrounded by all of the technology that we are striving toward. There are a whole bunch of companies that are looking towards the future just like us, and we really enjoy the positivity of the whole situation." The SIA Conference is quickly garnering a buzz as the place to be to get a glimpse into the technological innovations of the future for the securities industry.
As attendance at the conference increases, the possibility for companies to increase business and sales contacts, grows as well. "It's a little early to tell what actually comes out of it, but we came away with a very positive impression," maintains Owren. "We just hope that we can ultimately get some business from it; that's our reason for being there!"
Albert sums it up pretty succinctly. "I can't say anything bad about the show; it went extremely well for The Wall Street Source, and it is definitely the premier show for Wall Street." Most likely, the SIA Conference will continue to be the top showcase for new technology for the financial services industry well into the future.
While this year's show was a hit, next year will surely be tremendous with the industry having cleared the Y2K hurdle, and being fully steeped in the T+1 and STP processes. Many of this year's vendors are already preparing for ways in which to improve upon this year's offerings to steal the attention at next year's show. From hot dogs to hot shots, I'm sure they will not disappoint. See you next year!
Showcasing New Products
The SIA Conference provides the invaluable opportunity to showcase new products, services or merger information to a large, interested audience of investment professionals from various fields. The following companies are just a few of the many exhibiting companies that were able to take full advantage of this opportunity.
AutEx
At the SIA Conference last June AutEx a Thomson Financial company, announced two new partnerships. TradeRoute, AutEx's state-of-the-art order routing and execution reporting service, now links to A.W. Bertsch, Inc., enabling AutEx's institutional clients to route orders directly to the floor of the New York Stock Exchange.
AutEx also announced their plans to begin posting its real-time trading data on Trans-Lux electronic DataWall displays. The agreement between the two companies will enable AutEx's 3,500 broker dealer subscribers worldwide to view their own AutEx Super, Interest and Trade messages on the large-scale LED format that is increasingly prevalent among leading exchanges and brokerages.
Eagle Software Systems
Eagle Software Systems, a Spear, Leeds & Kellogg company, announced EagleTrader at the SIA show. "EagleTrader is a full-featured Nasdaq trading system with many advanced features designed specifically for the needs of market makers, institutional, retail and agency traders," said SLK managing director Mike Appleby.
"There's full support for order and trade processing, position and P&L Management," Appleby said. "EagleTrader incorporates all NWII functions, as well as offensive and defensive SelectNet algorithms."
EagleTrader provides access to all major market makers and ECNs, according to EagleSoftware. EagleTrader is fully Nasdaq compliant, and available on a service bureau (per seat) basis or for outright licensing.
REDIProducts
Spear, Leeds & Kellogg showcased several enhancements to its REDI trading system at the SIA show, including options trading, full news, and charting studies.
"We don't sell resources, we sell execution," said SLK managing director Neil DeSena. "For our execution customers, we offer a full-featured service that takes them seamlessly from information to decision to execution. Having resources like news and charting available is an important part of our service."
"We don't sell REDI for market data," DeSena said. "We sell REDI for trading. But our users get far more than just trading. They now get news, charting with some studies, options, e-mini's, and The Prospector, a powerful tool with which traders build their own algorithms for risk management and/or the notification of stock movement."
Reuters
Reuters' theme at the SIA show was "Get connected."
"We showcased the ways in which we are using the Internet and Internet technologies to better connect our customers to each other, to the markets and to the information in the market. We launched our InterTrade Direct product at the show. This is a suite of order management products, which will enable the straight through processing of securities transactions. Reuters launched that suite of products, and in particular the first module of that package, called Orders Direct, for order entry. The whole network allows you to process, order and execute trades entirely electronically, cheaper, faster and with less room for error. We also displayed Reuters Plus, our flagship US equities product that provides real-time news, financial information and data about US stocks, and demoed a browser-based version of that product, Reuters Plus Web, which will be released later this year."