Slugging it out with an industry giant like Reuters Holdings Plc may seem a hazardous strategy for an organization planning to become a public company in the next three years. But OpenTrade Technologies is undeterred about taking on a competitor with such a dominant share in the market for desktop trading systems. Even if they have 95%, says chief executive Joel Jervis, the remaining 5% is still an opportunity. OpenTrade’s history is strong on pedigree – but, until now, low on financial performance. The product was developed 12 years ago by Data Logic Ltd and was then acquired by Digital Equipment Corporation and ported onto Windows NT. Despite all the investment, it was clearly no money-spinner. DEC then sold it on, the new owner fell onto hard times and Cairnsford Technology Group CTG bought the operation up last year. CTG is a vehicle 75% owned by a property group anxious to get into IT and the remaining 25% is held by Jervis, an industry veteran who started out as a Burroughs engineer. OpenTrade appears to face the same problem with Reuters that Netscape does with Microsoft – Reuters can afford to virtually give away the desktop software as it is after the fees from the news feed. But Jervis is unfazed. DEC put a lot of money into making a superior product and he says they are now reaping the benefits. They can boast solid sales to Reuters’ customers. Jervis says he has managed to boost revenues from 4m pounds to 6m pounds and produce income of 650,000 pounds. The eccentric management of the company in the past means that 85% of business comes from Europe and they are now putting a bigger sales effort in the UK. With two clients planning to set up trading rooms in the US, Jervis believes it will give them a foothold in the biggest market of all. The development of the internet also leaves Jervis full of optimism and he is looking at development of news feeds of his own from the world’s exchanges. And with traders a breed who develop nervous twitches if they are out of contact with markets for a few minutes, the company’s WebWizard software enables them to get information remotely even from a mobile phone. Quite apart from his ambitions for Opentrade, Jervis sees CTG acquiring more companies in related areas. His route to the stock market may come from a reverse takeover of a ‘shell’ IT company on the Alternative Investment Market.
