Big Merger Turns NYSE from Prey to Predator - ' Going public '
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Going Public
The announcement that the combined firm will have its own IPO is a continuation of the trend of exchanges going public.
The U.S. exchanges have lagged behind their European counterparts as far as being publicly traded, and as a result have lagged as far as having aggressive growth agendas.
The European exchanges especially are diversifying and introducing new products to maintain profitability.
Cline notes, "I think we're entering a period of real dynamic changes and growth that will be exciting to watch. I predict that the U.S. exchanges will be more significant global players. I believe that growth and the raising of stock prices will come through innovation and expansion."
IT sales provide an area where European exchanges have been able to leverage their IT investments.
The Deutsche Boerse, for example, recently licensed its XETRA trading system to the Shanghai Stock Exchange.
Cline's group at Accenture is leading the effort to enhance and customize XETRA for the Shanghai exchange.
"This deal is good for Shanghai because they get a mature platform," notes Cline.
"And it's good for the Deutsche Boerse because they get income for their IT investment."
Cline believes that the NYSE will be poised to provide technology to exchanges around the world, with the addition of Archipelago's top-notch IT department.
Scale is still important in this business, and IT investments at exchanges are quite heavy.
Selling IT is a smart strategic play that leverages that investment over a larger base and also builds relationships between exchanges.
As the exchange market becomes increasingly global and national boundaries get less important, we may see those seed relationships that start with IT go much further.
As U.S. exchanges become more growth- and profit-conscious, we will likely see them participate more fully in this game.
Theresa Carey is finance editor for Ziff Davis Internet's Enterprise Edit group. She's been writing about financial technology issues since 1990 for a wide variety of publications.
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