Not all technology partnerships last forever, and when M&I Data Services of Milwaukee, WI, purchased the sales and support operations for the Reliance 2000 software from Software Alliance of Berkeley, CA, it brought to an end a 14-year-arrangement that had helped establish the package as one of the top core banking software programs.
Neither M&I nor SA would disclose the price of the buyout, but M&I will pick up about 40 employees, mostly in service and technical support, according to M&I vice president Lyle Gray. SA will cut its staff from approximately 110 employees to roughly 25, says Chuck Bay, who became SA's president and chief executive officer in September, replacing Todd Rulon-Miller, who left for an executive position with Netscape Communications Corp. of Mountain View, CA. The employees who are not hired by M&I will apparently be laid off. Bay is SA's third chief executive in the past three years. Rulon-Miller was hired in 1992 by Jon Blankmeyer, who had mn SA since its inception in 1980. Blankmeyer has since left the firm to join a high-tech start-up.
The deal leaves SA with essentially one product, Radar, an asset/liability management software program and enough cash - Bay would not say how much - left from M&I's purchase to consider buying another small software company. SA is privately held, and its chief shareholder is Teknekron Corp., an investment firm based in Incline Village, NV.
M&I regains sole ownership of a product it developed and has used to run the data processing of its parent company, the $12.5-billion-asset Marshall & Ilsley Corp. M&I also sold the software to other banks through service-bureau contracts, while SA sold Reliance 2000 to other bank holding companies that used it internally. They included Signet Banking Corp. of Richmond, VA, and Deposit Guaranty and Trustmark Bank, both of Jackson, MS.
M&I's software competes with packages from Hogan Systems Inc. of Dallas, Systematics Financial Services Inc. of Little Rock, AR; Computer Associates Inc. of Islandia, NY; and the Kirchman Group of Altamonte Springs, FL. These packages all run on mainframes and are sold primarily to multibillion-dollar bank holding companies. But the banking industry's consolidation in this country has shrunk the domestic customer base drastically, and many new accounts these firms are seeking are overseas.
That has changed the market for these systems. A more dramatic change has been wrought by the rapid growth of personal computers and the gradual decline of the mainframe.
This has changed how these firms' programs are used and how they must sell them, and both M&I's Gray and SA's Bay indicated that these shifts in the marketplace eventually led to the sale.