Similar to the past few years at this time of year, we are in the process of preparing a global banking platform deals report for 2010. As we have done since 2005 to help application delivery teams make informed decisions, we will analyze deals’ structure, determine countable new named deals, and look at extended business as well as key functional areas and hosted deals — all to identify the level of global and regional success as well as functional hot spots for a large number of banking platform vendors.

In the past, some vendors told us that they are not particularly fond of us counting new named deals while only mentioning extended business, renewed licenses, and the like. Why do we do this, and what is the background for this approach? First, extended business as often represents good existing relationships between vendors and banks as it represents product capabilities themselves. Second, we have asked for average deals sizes and license fees for years, but only a minority of vendors typically discloses this information. Thus, we do not have a broad basis for dollar or euro market shares — and I personally shy away from playing the banking platform revenue estimates game.

An Alternative Counting Model Could Be Implemented Easily . . .

Consequently, available data makes counting new named deals the only feasible way to represent an extending or shrinking footprint in the off-the-shelf banking platform market — and thus to also represent customer decisions in favor of one banking platform or the other. Some vendors suggested introducing weights for the size of the bank and the relevance of the seven world regions (for example, North America and Asia Pacific). We could easily do so, but there are problems with this approach:

A couple of days ago, global banking platform vendor Temenos announced that it has signed an agreement to acquire Odyssey Financial Technologies, which specializes in the private banking, private wealth management, and asset subverticals of financial services. The deal is expected to close around mid October: Temenos will pay more than 60 million euros and take on Odyssey’s existing debt obligations of more than 20 million euros. Here is my initial reaction to the planned acquisition.

On the asset side, Temenos will get the private banking platform Triple’A Plus, portfolio management and decision support solution WealthManager, plus clients such as Banque Cantonale Vaudoise, Delta Lloyd, and RBS Coutts Bank. This will help Temenos accomplish the necessary extension to its private banking footprint: In spite of prominent private banking clients such as EFG Bank, over the past few years Temenos’ T24 has not been as successful in the private banking/wealth management arena as, for example, ERI Bancaire, SunGard, or Tata Consultancy Services Financial Solutions as far as new named customers are concerned — not to mention the various regional private banking pure players.

At the same time, the Odyssey solutions will add additional technologies and architecture to Temenos’ already existing acquired portfolio: Not considering the two “classic” Temenos banking platforms T24 and TCB and the mobile solutions of recently acquired specialist vendor FE-Mobile, Temenos acquired multiple smaller banking platform vendors over the past few years, including Financial Objects in the UK and Viveo in France, plus further firms such as business intelligence and reporting vendor Lydian Associates.

I just returned from a business visit to India, and on the long way back, I had the time to sort out some observations and ideas on the future of the banking backbone that I had discussed with bankers as well as banking platform vendor execs over the past few weeks. But let me start from the beginning.

Next week, I will present first results of Forrester’s 2009 global banking platform deals survey. A total of 17 banking platform vendors submitted their 2009 deals for evaluation. One year ago, the same set of deals would have represented at least 19 vendors: In the 2009 survey, FIS’s deals include those of acquired US-based Metavante, and Temenos’ deals include those of acquired French Viveo. These theoretically 19 participating vendors submitted a total of 1,068 banking platform deals to evaluate, a steep increase compared with the about 870 submitted deals for 2008.

We had to classify a large share of these 1,068 banking platform deals as extended business or even as a simple renewed license — if the vendors did not already submitted them with the according tag. Forrester’s “rules of the game” did not allow us to recognize further deals, for example, because a non-financial-services firm signed a deal. Overall, Forrester counted 269 of the submitted deals as 2009 new named customers, compared with 290 for 2008. In the past, Forrester sorted the vendors into four buckets: Global Power Sellers, Global Challengers, Pursuers, and Base Players. The Pursuers and in particular the Global Challengers saw only minor changes in the previous years. 2009 has shaken this stable structure, and we will see many vendors in groups they haven’t been in before.