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Published by: TowerGroup
Published: Aug. 11, 2008 - 4 Pages
Table of Contents
- Report Coverage
- Three Economic Models in the OMS Market
- Suitability of the Models
- Summary
AbstractReport Coverage
A look at the buy-side order management system market (OMS) over the last few years reveals dramatic improvements in core functionality, extension of the OMS into new areas like post-trade support, connectivity to execution management systems (EMSs), and analytics products. At the same time, intense merger and acquisition activity in the vendor landscape has led to more broker-owned vendors and fewer independent software firms. This TowerGroup ViewPoint examines the new ownership models that have emerged in the buy-side OMS market and discusses the ramifications of the models for investment management firms. This research accompanies three other research reports focused on the buy-side OMS market, which respectively analyze major trends in this business, discuss changes in functionality, and present a detailed profile of seven major OMS vendors:
- TowerGroup Research Note V55:14M, Strategic Update on the Buy-Side Order Management Market: Have Things Really Changed Much?
- TowerGroup Research Note V55:07M, Spending Projections and TowerGroup Perspectives on Buy-Side Order Management Providers
- TowerGroup Research Note V55:08M, Profiling the Seven Majors of the Buy-side Order Management Market.
TowerGroup Take-Aways
- Tough economics in the order management market has resulted in the last few years seeing most independent OMS vendors sell out to larger software providers or broker-dealers.
- Three ownership models have emerged in the OMS market: an OMS as one product of a large and diversified software vendor, an OMS product owned by a broker-dealer, and an independent OMS-centered software company.
- Buy-side prospects and clients of OMS systems are increasingly looking at the ownership structure of their OMS providers seeking answers to questions about long-term focus, commitment to the OMS business, and potential conflicts of interest.
- No vendor structure or OMS ownership model is inherently good or bad, but each has particular challenges and opportunities, which means buy-side firms need to determine which appeals to them and is a natural fit for their business.
- Key factors investment managers must analyze in an OMS provider are its continued focus on new product development, quality and timeliness of ongoing support, and long-term commitment to the OMS business.
- Contrary to the popular perception that ownership of an OMS product by a broker-dealer represents a conflict of interest between the provider and its clients, the real concerns about this ownership structure stem from other issues.
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