March, ‘08

Over the past few weeks I have attended a number of vendor and user events. But perhaps the one that had me most interested was the recent ACI ACE Focus meeting in Omaha. This event brought together some of ACI’s biggest users from across the US, as well as a couple of users from other countries, including at least one from the U.K.

 It’s been hard to ignore the headlines. On Monday, December 17, ’07 most of us saw the first press release “IBM and ACI Forge Global Strategic Alliance” where the two companies advised us of “a significantly expanded strategic alliance to create an end-to-end solution for electronic payments powered by IBM's open technology.” No sooner than the community had begun to digest this, we saw the second round of headlines on Tuesday, March 18, ’08 where this time, the headlines of the press release added “ACI Worldwide, Inc. signs IT outsourcing agreement with IBM” and where it went in to describe that “an agreement to outsource its internal information technology (IT) services to IBM …ACI will retain responsibility for its security policy management and on-demand business operations.”

 But what really intrigued me at ACI’s latest user event was the general acceptance that the NonStop community running ACI’s products would be alright! As executives, and then senior managers, talked through the December announcement, it became clear that the message for all BASE24 users was to begin the migration to BASE24-eps. This is a new product, developed in C++, still dependent on XPNET for its interface into the NonStop Operating System, represents the latest iteration of BASE24.  With BASE24-eps, the same business logic will be installed on all the supported platforms including HP NonStop, SUN, IBM System p, and IBM System z. Maturing, or sun-setting, BASE24 “classic” was simply “business as normal” for such a back-level release. For more detail on this aspect of the December announcements, check out the blog posting I made on March 16, ’08 “ACI Strategy – it’s all about choice”.  

 The sales team at ACI would be leading with a System z solution. As one salesman told me recently, “most NonStop users will stay on NonStop.  If they run a System z (and most do) IBM will try and drive a switch.” The point here is that no NonStop user faces a forced migration to System z and no NonStop user that moves to the latest release will be supported any less than any of the other major platforms. Among the ACI community where GoldenGate prevails, I will be very interested to see how quickly the community asks for additional capabilities to help migrate to the new file formats of BASE24-eps as a steady flow of such requests will certainly suggest that, as ACI sales folk are already observing, users will be sticking with NonStop.

 Now the latest announcement – the March 18^th announcement – shouldn’t surprise any of us either. The only disappointment here is that the HP services organization didn’t win. But I have to admit, I am not sure how level was the playing field this far into the game. Software vendors, the size of ACI, don’t really need to be in “the IT business”. They are better served focusing their resources on building products – not running data centers. This is pretty straight-forward. Notice in the announcement that they will continue to be responsible for security policy, as well as on-demand business operations. I am quite OK that they are staying close to the security, and the on-demand business is a new venture for them and, while it has been slow to get off the ground, there are some early signs of acceptance within the financial community.

 In the final analysis, ACI’s customers are going to be looking foremost at the cost of running and growing their electronic payment solutions. They are going to look around at who is running on platforms other than NonStop – customer reference sites are going to be a problem for ACI for many years to come. They just don’t exist on System z to the same level that exists today on NonStop. Would you risk a transition away from a platform that has performed beyond expectation for more than three decades, to a platform with one, maybe two, customers still struggling to get acceptable levels of performance?

 ACI has been promoting their payments processing solutions for years as “scalable software to acquire, authorize and route electronic payments in high-volume, 24/7 environments”. And even with the announcement of the z10 by IBM, I remain unconvinced that a more cost effective option exists than NonStop. I continue to be intrigued as announcements roll-out of Omaha – but less so now about the future of BASE24 on NonStop, and less so about NonStop users heading for the exit. I may be wrong, but I haven’t talked with a single customer who feels a sudden need to risk it all! 

Cheers,