Hogan and Logica sign pact to share systems software.

Bank software firm Hogan Systems Inc. has made a technology-sharing pact with a leading systems integration company, a somewhat unusual move since Hogan offers similar services itself.

Officials at Dallas-based Hogan said the agreement with Logica North America Inc., signed earlier this month, is designed to give banks that use Hogan software a broader choice of systems integration services, even though Hogan competes headto-head with Logica for that business.

The pact, which designates Logica as a "preferred vendor," also allowed the Waltham, Mass.-based company to pay Hogan an undiselosed sum for the right to gain-detailed technical access to the inner workings of Hogan's core banking software, known in computer parlance as "source code."

"Let's be clear about this: We compete directly against Logica and they compete directly against us" for systems integration services, said Paul Zoukis, senior vice president of marketing and planning at Hogan.

But despite the rivalry, the agreement is "basically good business, because a competitive market, although sometimes viewed as unhealthy by a vendor, is actually good for our clients," Mr. Zoukis said.

Cooperative Competition

The deal highlights a growing trend among competing technology companies to cooperate when it serves both parties.

For example, earlier this year, bank technology outsourcing firm Florida Informanagement Services Inc. sold marketing rights to its branch automation software to a competitor, the Bisys Group Inc.

Mr. Zoukis also said that the agreement did not mean Hogan was backing away from its professional services business.

Add-on support services made up the greatest part of Hogan's fiscal 1994 revenues, although the company has begun a major product development push to increase sales of its software.

"This is absolutely not a signal that we are pulling back from professional services" as a part of Hogan's business mix, he said.

David Hatcher, senior vice president of Logica North America's retail banking and commercial lending group, said his company has built up expertise working on over 300 projects that involved Hogan software, including projects for NationsBank Corp., Charlotte, N.C., and First Security Corp. in Salt Lake City.

But with the deal, "We are looking to enhance our Hogan tools, ancillary products and training that will enable us to better serve the Hogan marketplace," he noted.

The agreement also benefits Hogan, as it defines the ways Logica can use Hogan's technology "It clearly provides for protection of our proprietary right because we do have a lot of trade secrets in our applications," Mr. Zoukis said.

"It also sets down a pattern of doing business that we can execute [with other systems integraton or consultants] further to make sure that people who are utilizing our proprietary capabilities pay us just compensation," he added.

Mr. Hateher said most of Logica's business with Hogan clients in the past has involved consolidating systems after a merger, or moving the software to more powerful hardware. Hogan's core accounting software, called the Integrated Banking Applications, currently runs on International Business Machines Corp. mainframes.

"One of the products we offer is a file conversion system," Mr. Hatchet said.

He described it as software used, for example, to move customer information from an acquired bank to a Hogan data base. "Now we will be able to make sure it is up to speed with the latest Hogan releases."

Mr. Hatcher added that Logica also offers banks system testing, performance measurement tools and technical training products that he called "additive" to Hogan's product line.

New Products Excluded

The agreement covers only existing Integrated Banking Applications, not new products that Hogan is rolling out this year, Mr. Hatcher said.

Logica North America is a unit of British-based Logica plc, a global systems integrator and software provider with revenues of $350 million last year. Logica officials said slightly less than a third of in revenue comes from financial services.

In the United States, Loglea is well known for its wholesale banking technology, with installations of its funds-transfer software and trading room systems in some of the country's largest banks.

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