Investment activity among vendors of client/server core processing systems is heating up, with one prominent company filing for an initial public offering this month, and another giving substantial backing to a service bureau.

Open Solutions Inc., Glastonbury, Conn., hopes to raise $40 million through sales of an undisclosed number of shares. The offer date was not disclosed.

Douglas Andersen, chairman and chief executive, said he could not discuss the pending offering, but has said that such a transaction would help Open Solutions raise its profile in the market, let it retain skilled employees with the promise of stock, and make acquisitions easier.

The company, which expects revenues of $12 million in 1998, sells to banks and thrifts that have as much as $2 billion of assets.

Douglas Carlisle, general partner with Menlo Ventures, which has spent the last five years investing in new client/server providers including Open Solutions, said legacy systems in banks are ripe for an overhaul.

"There is such a fundamental shift in the computing platform for the banking and financial services industry," Mr. Carlisle said.

"It's a lot of fun to see companies grow, get their product developed, get that first bank under their belt, and see them hit their milestones," he added.

Menlo Ventures, Menlo Park, Calif., owns one-third of Open Solutions, which was founded in 1992 by Graham Gurney and Clifford Waggoner. Bisys Group Inc., which sells Open Solutions' software to people who want to use it on a service bureau basis, owns 15.7%, according to the prospectus filed with the Securities and Exchange Commission.

Open Solutions' IPO will be underwritten by BT Alex. Brown, Credit Suisse First Boston, and UBS Securities.

Another up-and-coming client/server vendor, Phoenix International Ltd. Inc., wants to give traditional bank outsourcers a run for their money by establishing client/server-based service bureaus around the country.

Orlando-based Phoenix International has invested $300,000 in Servers On- Line Inc., a Holbrook, N.Y.-based service bureau start-up focused on the client/server environment. The 10-year-old consulting firm recently opened its service bureau component.

Phoenix International has struck a similar deal with a Miami-based service bureau, Eris Inc. Phoenix International hopes to "pockmark the U.S. with data center partners," said Raju Shivdasani, the company's chief operating officer.

Kenneth Sole, president of Servers On-Line, said a growing number of banks are interested in the lower costs and reduced reliance on multiple hardware and software vendor relationships that client/server systems offer. He said he sees opportunity in those banks that are not interested in running their systems in-house-about half of all banks nationwide.

"There is a lot of interest in the product," Mr. Sole said.

Phoenix International has sold its core banking system to 85 banks globally. Its largest U.S.-based customer is Suffolk County National Bank, New York, which has $850 million of assets.

Phoenix International's stock price rose $2 last week, to $16.75 as of Friday afternoon. The company went public in August 1996 at $8 per share.

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