I am starting a new series of posts focused on verticals - especially non-manufacturing ones.
One of the biggest spenders on IT is the banking vertical. By some estimates over $ 125 billion a year. Technology is lifeblood to them. They spend 8 to 10% of revenues on technology - 2 to 3 times what an average manufacturing company spends. And they spread the wealth. Fragmentation is a major issue facing banks - and getting worse as many Western banks continue to custom develop at a furious pace often with offshore captive and vendor staff.
So, it is somewhat surprising an integrated vendor like SAP has had limited success selling core banking functionality in the US market. It has, however, been racking up sales in Saudi Arabia, Malaysia, China - and says 50 million customer accounts worldwide are managed using its functionality.
Oracle's investment in i-Flex last year probably got the competitive juices going even more. i-Flex reported in its last quarter revenue growth of 51% from previous year, so it is not slouching either.
Then you have focused vendors like Temenos from Switzerland, MiSys from the UK - in fact, if you look at slide 12 of this analysis from Temenos, the specialists continue to have a fair amount of momentum.
But there is plenty to go around. Not only are they internally fragmented, there are literally thousands of banks around. Over 7,500 in the US alone. And only about 200 of US banks show up in the world's largest 1,000.
