This document discusses the top 5 fastest growing companies in securities technology between 2003-2005 based on compound annual growth rate in end users. These companies are ViewTrade Securities, Pyxis Mobile, IMTrader, Pivotal Corp, and BondDesk Trading. It provides details on each company's business model, growth strategies, products/services, and competitive advantages. Key trends discussed include growing demand for mobile solutions, integration of instant messaging into trading, and online/cloud-based platforms providing trading functionality.

1. A Supplement to
SecuritiesIndustryNews
Securities Technology
Integration, product
diversification are
supplier priorities
Globalization, mobility,
messaging fuel
growth strategies
A Supplement to
SecuritiesIndustryNewsFall 2006
Integration, product
diversification are
supplier priorities
Globalization, mobility,
messaging fuel
growth strategies
2006 Ranking of Front
Office Solution Providers
Securities Technology
2006 Ranking of Front
Office Solution Providers
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2. 14 Securities Technology 50 Fall 2006
R
ounding out the Fast Five, as measured by
2003-2005 compound annual growth
(CAGR) in end users, are companies occu-
pying different niches but with a few char-
acteristics in common: scalable technology,
customized solutions and responsive customer service. The
waves carrying these companies, like IMTrader and Pyxis,
are also highly transactional. ViewTrade Securities, whose
two-year CAGR of 1,449 percent was tops by a wide mar-
gin, saw its cross-border trading platform business take off,
particularly among U.S. brokerages.
Pivotal Corp., a division of CDC Software, has generated its
triple-digit CAGR by providing customizable and compre-
hensive customer relationship management (CRM) systems
to midsize firms and individual business units. The company
puts a premium on database technology designed to support in-
terdepartmental collaboration, as well as accuracy of the un-
derlying data.
BondDesk Trading, whose 154 percent CAGR was good
enough for number five, edging out the 140 percent of new-
issue processing specialist i-Deal, has played a major role in
distributing and automating fixed-income securities for a cus-
tomer base that now includes a who’s who of the retail bro-
kerage industry. It is the New York broker-dealer owned by
BondDesk Group and operates the first alternative trading
system for odd-lot bond transactions, dating back to 1999.
The network has been growing rapidly throughout this decade
as interest and activity in fixed-income markets have climbed.
These are case studies with a bullish edge. They may not in
themselves replicate the excitement—and certainly not the ex-
cesses—that distinguished the great 1990s boom in tech in-
vestments and innovation. But they point to what’s possible
when well-managed companies with an entrepreneurial spir-
it bring out well-positioned products on a strong technologi-
cal foundation. And good timing doesn’t hurt, either.
Pyxis Mobile was in the right place at the right time—when
BlackBerry devices, made by Canada’s Research in Motion,
were overtaking cell phones as Wall Street’s “must have” com-
munications accoutrement. Pyxis helped free fund management
firms’ personnel from their offices and screens with enter-
prise-class, mobile versions of desktop applications.
IMTrader has been at the forefront of the instant messaging
(IM) migration from frivolous online chatting into the deadly se-
rious business of securities trading. The field has attracted new
entrants—Toronto-based Belzberg Technologies, for one, with its
Chat Trader—but IMTrader has been building and refining its
technology with both the buy and sell sides since 2002 and has
expanded its range of asset classes. If instant messaging continues
to gain popularity, then IMTrader’s future looks bright.
ViewTrade’s breathtaking growth has come, to be sure, on
top of a relatively small base to reach 3,850 seats as of year-
end 2005. That’s a positive as far as managing director James
StClair is concerned. “The fact that [ViewTrade is] small makes
us nimble,” he says. It’s also a throwback: Much of that growth
has come by word of mouth. “There’s an incredible market out
there for [our] technology,” says StClair, who is looking to
put up another, possibly even better, banner year. “We just
got our first sales manager,” he notes.
ViewTrade
Until last November, Jersey City, N.J.-based ViewTrade
Securities did most of its business abroad. This year it has
brought in more than 40 brokerages as clients. “We’ve gotten
a very strong response since we first started getting U.S. clients,”
says StClair. “And we haven’t even really started advertising
yet, or going to trade shows.”
He attributes the success to the scalability of ViewTrade as
Trendy Niches Propel
Hottest Growth CompaniesBy John Wagley
The 2006 Fast Five
2005 seats 2-year CAGR (%)
ViewTrade Securities 3,450 1449
Pyxis Mobile 4,500 454
IMTrader 1,400 216
Pivotal Corp. 5,570 182
BondDesk Trading 65,000 154
Of the fastest-growing companies in the Securities Technology 50—the Fast Five—two are riding Internet-era
technology waves that have swept across the wider society and into core operations of financial institutions:
IMTrader, which offers a trading system based on instant messaging, and Pyxis Mobile, which developed a
range of institutional sales, research and administrative applications for handheld devices.
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3. Fall 2006 Securities Technology 50 15
an application service provider (ASP), or technology host for
its customers. “I think our competitive edge has come from
our size,” he says. “Most of our competitors tend to have much
deeper pockets, but that doesn’t make their systems any better.
... With some larger [ASPs], customers may be told to take it
or leave it—[the vendors] are not as helpful if you come back
with specific little needs. But for some of our customers, with-
in a week or two our programmers or de-
velopers can come back and customize
the solutions. It’s been a competitive edge
for some time.”
Seven-year-old ViewTrade and its sub-
sidiaries develop and deliver trading and
other products via an online, real-time
hub. The company’s Trading Platform is a
foundation for developing execution-fo-
cused, valued-added products with partner companies—among
those listed on the ViewTrade Web site are Jefferies & Co., Man
Financial and Penson Worldwide—as well as clients and their
end users on a global scale. “[Our service] is very cost-effec-
tive,” says StClair. “Clients are paying in some cases half of what
they’d be paying with our competitors.”
The ASP model has grown in popularity in recent years
due to demand for trading multiple asset classes on single
platforms and automated trading growth overall. Notes Randy
Grossman, research manager at Financial Insights, “Back in
the 1980s, ASP had a different name—time sharing. You pur-
chased time on someone else’s computer, sharing resources.
You take away a lot of the costs of running a system. You ba-
sically offload that onto that provider.”
Drawing on data-content providers such as ComStock and
MarketWatch, ViewTrade remains focused on international
trading, which has a growing need for systems that, the com-
pany says, “bring global trading transparency and parity for in-
stitutional clients of all sizes.”
Pyxis
“Financial services cries out for mobility solutions,” says Gene
Kim, consulting manager at Financial Insights. “You have an
outside sales force in the wholesale arena. It makes a lot of
sense to have transaction and fund data with you.”
That’s where Waltham, Mass.-based Pyxis Mobile comes
in, enabling fund managers to communicate with clients, traders,
analysts and market-data and enterprise
systems while on the road. On a founda-
tion it calls mPlatform, Pyxis offers in-
vestment industry applications including
mWholesaler, mInstitutional, mPortfolio
Manager, mAdvisor and mReports.
“Whether it’s institutional investors,
wholesalers, fund managers or corpo-
rate management, we understand the
specific needs of these business units across the financial en-
terprise,” says Pyxis CTO Todd Christy. Pyxis says it supplies
the most widely used wireless software in financial services,
with customers such as Pimco, Putnam Investments and
Deutsche Asset Management—all told, 22 of the top 50 U.S.
asset managers and more than 40 percent of the global top 50.
Pyxis recently expanded its European presence, opening a
London office.
“Pyxis doesn’t just try to throw what’s on the desktop onto
a handheld,” says consultant Kim. “I think what sets Pyxis
apart is that its approach has been changing; they’re pushing
out what already exists. It’s gotten to the point where at least
one client has asked if they can take what’s on their wireless
and use it on their desktops, reversing the order.”
The technology can access leading buy-side and hedge
fund order and trade management systems, portfolio man-
agement, accounting and compliance. It also provides real-time
market information from Reuters, Dow Jones and other data
sources. Tom Santaniello, an application manager at Pioneer
Investments in Boston, said Pyxis software improves sales-
staff productivity. “Since their mobile counterpart can now
access their own data with BlackBerrys, internal salespeople
have more time to focus on managing customer relationships,”
he says. On the BlackBerry, users obtain immediate access
to performance data, profit and loss, exposure reporting, port-
folio holdings and benchmark comparisons.
“The technology is still not without glitches,” says Kim.
“There’s always the issue of the mobile-carrier reliability and
the different kinds of devices. But I think mobility is still early
in its adoption, and Pyxis has gotten in early.”
IMTrader
Developed by Pivot Solutions, a 2004 spin-off of Boston-
based Eze Castle Integration, the IMTrader system captures
instant messages and converts them into standards-com-
pliant trades. The technology has been used to trade more
than 3 billion shares.
“We’ve seen a dramatic, grassroots adoption of IM on Wall
Street,” says Pivot CEO Furqan Nazeeri.
IMTrader custom-designs the mass-ac-
cepted technology for investment pro-
fessionals, he says. Clients range from
world-class broker-dealers to “five-guys-
in-a-room” hedge funds.
Analyst Kim calls it “very much an in-
tegration play” that automates manual
processes and reduces errors. “The aver-
age data-entry professional might make five errors in 4,000 key-
strokes,” he says. “Each of those errors creates pain in the
back office.”
In June, IMTrader introduced Market Alerts, designed to
broadcast to large distribution lists information including in-
dications of interest, market looks, news and earnings releases
and pre-trade crosses. Last year, IMTrader rolled out a com-
Todd Christy
Furqan Nazeeri
James StClair
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4. 16 Securities Technology 50 Fall 2006
munications and trading platform specifically for the buy side.
“The technology was easy to install; [it] seamlessly inte-
grated with our existing technologies and compliance systems
and is simple to use,” said Steve Menendez, VP of institu-
tional trading at Flagstone Securities. “Additionally, we have
an ongoing record of all conversations that can be easily
searched and retrieved.”
As younger workers move into Street careers, IM usage
can only go higher, says Nazeeri. He adds, “I have a 15-year-
old niece. She says she only uses e-mail to talk to old people.”
Pivotal
Vancouver, Canada’s Pivotal Corp. emphasizes the flexible and
scalable nature of its CRM software, which it says increases
operational performance, streamlines
value-chain processes and improves over-
all customer service. That’s been a boon to
Allianz Dresdner Asset Management: “The
investment management business is very
specific, detailed and highly complex,” says
Giles Hardy, the firm’s head of e-business.
“Due to the customization capabilities of
Pivotal technology, we have been able to
adapt the system to meet these needs.”
Users get the often elusive, comprehensive views of their
client relationships “to uncover new opportunities and deliver
better-targeted service,” the company says. The software ensures
data accuracy and accessibility with a single, shared client-in-
formation database, allowing for cross-functional account serv-
icing and broader interdepartmental collaboration. “A key ad-
vantage of the solutions is that they show what customers’ assets
look like at any time,” says Jason Rushforth, Pivotal’s financial
services managing director.
“What we’re looking to do is automate the front office of
any business,” he adds. “We want to deliver complete cus-
tomer service solutions” that involve “business marketing,
client sales, ... anything involving interaction.”
Pivotal’s growth can be attributed in part to its development
of industry-specific applications, says Rushforth, which in-
clude CRM for Institutional Asset Management, CRM for
Wholesale Asset Management and CRM for Capital Markets,
in addition to commercial banking and private banking wealth-
management products.
There is also an international push to Pivotal’s growth.
“Many of the institutions are looking for global solutions,”
says Rushforth. “You have to support multicurrency and mul-
tilingual [needs]. If I’m a manager in North America, that will
be part of our core product. I think that gives [Pivotal] a huge
advantage in the marketplace.”
The company’s financial industry clients range from Allied
Capital Management and Julius Baer Investment Management
to regionals such as Memphis, Tenn.-based Morgan Keegan &
Co. and Bridgeton, Mo.’s Vantage Credit Union. The compa-
ny also has some “firm understandings” with at least a few
hedge funds, says Rushforth.
Challenges for Pivotal are more macro, or tied to market
cycles, he says, adding, “The economy is probably always the
biggest challenge—especially in the investment banking space,”
but he is confident that “we have a very rock-solid business
model.”
BondDesk
“Essentially, broker-dealers and their retail reps are looking at
ways to purchase fixed income with confidence,” says Robert
Slaymaker, CEO of Mill Valley, Calif.-based BondDesk Group.
Before BondDesk, “many had to rely on prices at their own
trading desk. Now they see offerings at
multiple dealings. They’re more confident
in getting the best price and execution.”
BondDesk executes over 20,000 trans-
actions daily; clients can access 30,000
live taxable and tax-exempt security of-
ferings. More than 90 broker-dealers sup-
ply inventory to participating traders, fi-
nancial advisers and individual investors.
The firm’s technology solutions integrate with clients’ applica-
tions, matching existing workflow and screen layouts.
The company continually works to improve functionality,
says Slaymaker. “We have been growing based on the need for
our service,” he states. “Our basic premise is more trans-
parency and more tools for decisionmakers. Our technology
is built to meet the specific needs of our clients.”
Last year it enhanced execution and compliance through
the MarketView & Trade Monitor System, an electronic tool
kit that automatically alerts firms when its customers’ trades
stray too far off prevailing market information. Trade Monitor
also records trader documentation and supervisory notes for
each trade, allowing a firm to flag problem trades. The system’s
electronic archive records pertinent MarketView data at the
time of execution.
Popularity breeds more success and is bringing BondDesk
to “critical mass,” says Slaymaker. In June, Boston-based pri-
vate equity firm Advent International agreed to buy a major-
ity stake in BondDesk, which had been controlled by a con-
sortium of financial institutions.
“With Advent as our partner, we will continue to execute our
original strategy,” Slaymaker said at the time. “We also gain
access to their deep financial markets expertise, as well as their
global network of investment professionals and contacts.”
Advent and BondDesk management are optimistic about
fixed-income market growth as the baby-boom generation
ages and turns to this asset class. “We’re trying to be the
thought leader, and we believe we’re making headway,” says
Slaymaker. ■
Robert SlaymakerJason Rushforth
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