ADP Still Reaching For Buy Side, With Prime Partner

Looking to expand its presence in the institutional marketplace, ADP has launched a new Microsoft Corp. Windows- based quote terminal service combining the core of its flagship FS Partner service with certain user-interface characteristics of its newly acquired Market Max platform. The plan raises questions about ADP's future maintenance of Market Max -- which runs on Apple Computer Inc. Macintosh processors and supports a user base of about 1,000 retail brokers and buy-side traders. The debut of Prime Partner came in advance of the vendor's agreement to purchase news consolidation system vendor Investment Software Systems Inc. -- a move ADP also considers part of its institutional strategy (see related story, this issue).

While ADP officials say there are no plans to phase out Market Max and replace it with Prime Partner, one source at the vendor says he would not rule out the possibility of "merging the two systems." This source says that Market Max was acquired in part because of its institutional client base and any move would have to be aimed at maintaining and increasing that user group. Still, it's unlikely that any "merged" product would carry forward what is likely Market Max's most distinguishing feature -- the fact that it runs in an Apple Mac environment.

ADP picked up Market Max when it bought competing vendor Tristar Market Data Inc. early last spring. The vendor's Prime Partner strategy is also emerging against the backdrop of ADP's continuing reorganization of its Brokerage Information Services Group (BISG), an effort that has included the relocation of vice president James Lascelles to ADP's institutional marketing group in London and the hiring of Furman Selz Inc.'s Kevin Quill to be senior vice president of institutional markets in the U.S. (IMD, Dec. 5) New York-based brokerage and investment management firm Furman Selz is Market Max's largest user. Quill has oversight of sales to both the front office and back office in the institutional marketplace.

According to Lascelles, ADP is looking to Prime Partner to not only expand its client base, but also to serve as a springboard for the launch of future products. Says Lascelles: "This is an approach that lends itself very well to many things we have coming on." For now, says Lascelles, ADP will use Prime Partner as a foundation to develop "primary" buy-side applications -- a category Lascelles describes as systems "90 percent of the people spend 90 percent of their time" using. At the same time, however, he says that ADP will eventually use Prime Partner to develop and enhance products in areas such as international data, text handling, chart and quote display and multimedia.

The genesis of ADP's Prime Partner lies in the vendor's acquisition of Market Max. In January of this year, ADP signed a letter of intent to purchase the assets of Montgomery Securities Inc.'s Tristar Market Data (IMD, Jan. 17). That deal was finalized by March.

Following the acquisition, ADP conducted a survey of Market Max's customers. According to Lascelles, the purpose of the survey -- which yielded positive feedback especially in the area of user-friendliness -- was to create a feature set for a contemplated new product. Lascelles says the 15- question survey produced 13 factors which ADP's system designers incorporated into Prime Partner. He says, however, that the vendor was -- not surprisingly -- unable to replicate the user-friendly features unique to the Macintosh environment. He says Mac-related issues were examined only in the last two questions of the survey.

Lascelles says that ADP systems designers then proceeded to build Prime Partner on top of the FS Partner engine, incorporating the results of the Market Max survey. According to Lascelles, because ADP designers already had the Partner engine to work with, development time was brief -- only about two months.

"It differs from FS Partner in that Prime Partner adheres to the blank sheet of paper concept," says Lascelles. He explains that once users are instructed on the operations of Prime Partner, they can configure the service themselves in the Windows environment. While the enhanced freedom to arrange screen displays is a standard feature built into Prime Partner, it is only an option for FS Partner users. "If a money manager takes 10 Prime Partners, within a couple of weeks each user would have a slightly different looking screen," says Lascelles. "In many cases, you would have very different looking screens."

Also standard on Prime Partner are both keyboard and mouse control -- with users capable of selecting the degree to which they want to rely on one or the other or both. In contrast, the degree to which FS Partner users depend on keyboard and/or mouse is fixed, depending on the version of the system they purchase.

The Prime Partner platform also bundles in as standard various services that are options on FS Partner. Lascelles says that one such service is a detailed corporate reference guide to U.S. companies.

The pricing structure of the two products also differs. Prime Partner users can opt for only one of two price levels, with all of the system's options incorporated into the more expensive option. FS Partner subscribers, however, have much more discretion as they select from a broad array of options, says Lascelles. According Lascelles, ADP distinguished the two products in this way because, "on the buy side, we have found they tend to like simplicity of administration and installation."

Says Lascelles: "Our objective is to be the compelling choice for primary services on the buy-side."