FD, Fusion Sign Marketing Pact After Successful Collaborations

Having collaborated on four trading-room system installations in the last year, FD Consulting Inc. and Fusion Systems Group have decided to make it official. The two companies have formed what they are calling a "global cross- marketing alliance."

The formalization of what both sides consider a good working relationship suggests much about the directions both companies intend to take in the near future.

Systems integration consultancy Fusion, by selecting a local data distribution architecture partner such as FD, makes it clear that it no longer considers it necessary to customize trading-room system platforms for each of its clients.

For FD, which began life as a full-range systems integrator, the arrangement with Fusion represents a move toward becoming a vendor of specific trading-room systems platform and applications programming interface (API) products, rather than a true integrator of multiple systems for the trading room.

Says Bill Cline, senior vice president at FD: "We want to stay focused on what we do best, and that is to a large degree the distribution architecture and the applications environment." FD already has a mutual marketing relationship with Switzerland's Infotec S.A. under which Infotec markets FD's products in Europe.

Cline says the deal with Fusion is similar to his efforts to expand FD's third-party program, which now counts among its participants 25 vendors whose applications are compatible with the API of FD's MIPS local data distribution and workstation software. "If we try to be everything to everybody," says Cline, "we're going to screw it up."

According to Duncan Wilcox, vice president at UBS Asset Management in New York -- who was closely involved with the first Fusion/FD collaboration when he was with Chase Investors Management Corp., then a unit of Chase Manhattan Bank -- the teaming of trading-room platform providers with systems integrators is a long overdue development. UBS Asset Management is a subsidiary of Union Bank of Switzerland.

A few years ago, Wilcox says, the handful of large Wall Street firms that were pioneering hi-tech trading developed their systems on an ad hoc basis as their needs -- and the technology available -- changed over time. "For firms that were late to catch up with what's going on," he says, "[vendors] like FD in a strategic alliance with Fusion are among their only answers." They are now able to purchase an appropriate core architecture and develop applications using that architecture as a base.

Harvey Rand, vice president of sales and marketing at Fusion, stresses that the deal with FD is not exclusive and that the consultancy will remain objective as to which platforms it recommends to its clients. He concedes, however, that developing a close relationship with FD is in the best interests of at least some of Fusion's clients.

Fusion hopes that its client base will expand as a result of the deal. "We're going to gain some global exposure that we didn't have before," says Rand. FD has "bigger markets that happen to be concentrated around New York, London and Tokyo and present us with opportunities that are domiciled outside of the States."

Cline most values the extended sales and service help FD will get from Fusion. He sees the marketing agreement eventually boosting the chances of both companies in the Asia/Pacific area, although the initial benefits are expected to be in the U.S.

A significant part of the alliance involves intensive cross-training that will enable Fusion's personnel to undertake installation of FD's systems for clients. Though Rand declines to comment on who Fusion's clients are or who is expected to sign on with the new Fusion/FD partnership, he indicates that the two vendors have "about a half-dozen" potential installations in the works.

To date, Fusion and FD have collaborated on four installations. Fusion first opted to work with FD last year when it was developing a currency arbitrage system for a small indexing and hedging subgroup at Chase Investors. According UBS's Wilcox (who was with Chase at the time), the group required real-time information support, as well as such features as windowing and relational database access.

But the "biggest chunk of the puzzle," he says, "had to do with the data feed distribution platform."

Wilcox, with the guidance of Fusion, looked at Effix Systemes S.A. of France and Teknekron Software Systems Inc. Wilcox says he was put off by Effix's then-ongoing and complicated negotiations with Reuters Holdings PLC that resulted in a marketing agreement between the two companies. Teknekron's West Coast location was a factor in his decision not to go with that vendor, he says.

The result was a Sun Microsystems Inc. workstation-based currency arbitrage system that generated recommendations on when to take long or short positions in certain currencies. The system made use of FD's MIPS to feed market data from Reuters and Knight-Ridder Inc. into Access Technology Inc.'s 20/20 spreadsheet and other applications (TST, April 22).

FD's and Fusion's next collaboration also involved Wilcox. Earlier this year, Chase sold Chase Investors to UBS Asset Management. Though Chase kept the currency arbitrage system for itself -- it had earned $3.5 million since its inception -- Wilcox, and most of the non-portfolio-related software he'd developed with Fusion, went over to UBS in the deal.

More recently, Fusion and FD came together at UBS Securities Inc., where the two worked to install a local data distribution system for the firm's derivatives desk based on NeXT Inc. workstations (TST, May 20).

Neither Cline nor Rand would disclose the identity of their fourth collaboration site.