Banks are worth pot of gold for system integrators
"In terms of value, banking is now the best" sector for system integrators, said Michal Danielewski, executive vice president of ComputerLand Poland. "But telecoms is growing fast."
Growth in system integration, which provides software and hardware applications for electronic networks, is fueling a realignment of companies that formerly specialized in hardware or software business. Those companies are now shifting to the higher-margin system integration side, Danielewski said.
"This year we expect our revenues not to rise significantly, but the share of revenues coming from system integration will rise to 40%," Danielewski said, and will continue to increase to at least 50% in 2000.
System integrators are currently salivating over upcoming contracts for banks such as BRE Bank, Bank Handlowy and Bank Pekao, Danielewski said. "We are fighting for these contracts," he said, adding that decisions on the winning bids are expected by the end of this year. Germany's SAP is also fighting for the Bank Pekao contract, Danielewski said.
These new battles come on the heels of ComputerLand's recent winning of a contract to provide system integration work for BIG Bank Gdanski's Millennium branch network. Tallied up, the banking sector will provide about one-third of ComputerLand's revenue this year, Danielewski said. Last year the company had zl. 344 million ($88 million) in revenue, with zl. 305 million ($78 million) coming from system integration, according to the company. Those figures put ComputerLand in first place in the WBJ's survey of system integrators. (See The List, page S7) "In terms of the number of our customers, general businesses dominate. But measured by value, banking is No. 1," Danielewski said.
Banking will account for about $40 million of ComputerLand's revenue this year, Danielewski said.
But competition is fierce. The consensus leader in providing system integration to bankers is Softbank, which specializes in the field. Softbank would not reveal its revenue from system integration, but its total revenue for 1998 was zl. 244 million ($70 million), the company said. Softbank has built its niche providing system integration solutions to clients such as Powszechna Kasa Oszczednosci Bank Panstwowy (PKO BP), Bank Pekao, BIG Bank Gdanski, Kredyt Bank and Bank Zachodni.
ComputerLand also boasts Bank Zachodni on its client resume, Danielewski said. Earlier this year, ComputerLand sold its Profile banking transaction software to Bank Zachodni, which could be a foot in the door to selling a similar package to Wielkopolski Bank Kredytowy (WBK), he said. Both banks are now majority owned by Allied Irish Bank (AIB).
"AIB has shown it accepts Profile, so there is a good chance they will want the same for WBK," Danielewski said.
Beyond the banking arena, major tenders are slated in the public sector. A $30 million contract to provide command-and-control systems for police in Szczecin, Krakow and lodz will be decided by the end of the year, coming on the heels of Motorola's winning bid for the Warsaw contract several weeks ago. Poczta Polska's contract is still to be decided, and the Chief Customs Office may begin taking bids soon, Danielewski said.
Growth in system integration, which provides software and hardware applications for electronic networks, is fueling a realignment of companies that formerly specialized in hardware or software business. Those companies are now shifting to the higher-margin system integration side, Danielewski said.
"This year we expect our revenues not to rise significantly, but the share of revenues coming from system integration will rise to 40%," Danielewski said, and will continue to increase to at least 50% in 2000.
System integrators are currently salivating over upcoming contracts for banks such as BRE Bank, Bank Handlowy and Bank Pekao, Danielewski said. "We are fighting for these contracts," he said, adding that decisions on the winning bids are expected by the end of this year. Germany's SAP is also fighting for the Bank Pekao contract, Danielewski said.
These new battles come on the heels of ComputerLand's recent winning of a contract to provide system integration work for BIG Bank Gdanski's Millennium branch network. Tallied up, the banking sector will provide about one-third of ComputerLand's revenue this year, Danielewski said. Last year the company had zl. 344 million ($88 million) in revenue, with zl. 305 million ($78 million) coming from system integration, according to the company. Those figures put ComputerLand in first place in the WBJ's survey of system integrators. (See The List, page S7) "In terms of the number of our customers, general businesses dominate. But measured by value, banking is No. 1," Danielewski said.
Banking will account for about $40 million of ComputerLand's revenue this year, Danielewski said.
But competition is fierce. The consensus leader in providing system integration to bankers is Softbank, which specializes in the field. Softbank would not reveal its revenue from system integration, but its total revenue for 1998 was zl. 244 million ($70 million), the company said. Softbank has built its niche providing system integration solutions to clients such as Powszechna Kasa Oszczednosci Bank Panstwowy (PKO BP), Bank Pekao, BIG Bank Gdanski, Kredyt Bank and Bank Zachodni.
ComputerLand also boasts Bank Zachodni on its client resume, Danielewski said. Earlier this year, ComputerLand sold its Profile banking transaction software to Bank Zachodni, which could be a foot in the door to selling a similar package to Wielkopolski Bank Kredytowy (WBK), he said. Both banks are now majority owned by Allied Irish Bank (AIB).
"AIB has shown it accepts Profile, so there is a good chance they will want the same for WBK," Danielewski said.
Beyond the banking arena, major tenders are slated in the public sector. A $30 million contract to provide command-and-control systems for police in Szczecin, Krakow and lodz will be decided by the end of the year, coming on the heels of Motorola's winning bid for the Warsaw contract several weeks ago. Poczta Polska's contract is still to be decided, and the Chief Customs Office may begin taking bids soon, Danielewski said.
