The longer term, and presumably more jarring, impact for treasury technology would come if a successful marriage of content-provider and technology-provider accurately reflects what the priorities of the treasury market turn out to be in the future. "Treasuries need news. They need market data. They need bank balance and transaction information. They need credit reports on their customers. They need investment advice. They might need ten to twenty different sources for information. The information may come on paper reports, as e-mail or from Web portal downloads," says Anthony J. Carfang, a partner at Treasury Strategies Inc. "But getting so much information through so many channels is obviously inefficient. If anyone can bring together some of those reports and consolidate some of those channels, that's good news for treasury staffs and probably good news for the provider's sales."

THE AUTOMATIC DATA FEED

So far, the more advanced workstations, such as those sold by market leader SunGard Treasury Services, have been able to build linkages to external data services like Bloomberg, Reuters and Thomson. The two products, however, have never been offered before as an integrated package, notes New York-based Susan Skerritt, another Treasury Strategies partner, and it is the prospect of treasury technology that is linked to data sources and programmed to feed itself automatically that portends a sea change for the market. "Two players with different capabilities are getting together. That signals convergence, which, over time, will put together more of what a treasury staff now must buy piecemeal," she says.

This potential synergy has not escaped Thomson's notice. Using a branding strategy called "Thomson One, " Thomson has been trying to move beyond product silos to deliver configurations of products that can be chosen a la carte but linked together so they communicate. The Selkirk Treasury Manager and Treasura workstations duplicate no existing Thomson product, but could be wrapped into the Thomson One modular strategy and packaged with other Thomson products in integrated solutions, says Kevin Marcus, president of Thomson Financial. That's what drove Thomson last year to buy TradeWeb, an execution portal for fixed-income securities purchases by institutional investors. " It's like Lego blocks," Marcus explains. "Lots of sizes and colors, but they all snap together and let you build what you like."

Even before the sale, Selkirk had been trying to develop links with Thomson data as it had with Thomson rivals Bloomberg and Reuters. "The interesting question," says Craig Jeffery, a treasury technology specialist and senior vice president at Atlanta-based Wachovia Treasury and Financial Consulting, "is how the two companies will integrate their offerings. Will it be plug and play? Will Selkirk still offer links to other providers of financial information?" With the annual Association for Financial Professionals conference beginning Nov. 7, Thomson and Selkirk are working to develop specific plans they can announce at that gathering, Suttie says.

In the meantime, most in the market are more focused on the short term, practical view–prices and sales volumes for 2005–and they see a possibility that the market will move significantly, partly in response to the fallout of the Thomson-Selkirk merger. Selkirk will now cut prices for installed workstations and launch a sales effort on behalf of Web-based Treasura, predicts Dan Carmody, a consultant who helps companies choose and install treasury technology and president of Chicago-based TreaSolution Inc. "Treasury workstations could soon be available for as little as $10,000 a year, making them economical for a host of middle-market companies and encouraging consultants to recommend workstations more often," he says.

Treasury consultant Jeff Wallace, a partner in the Chicago-based Treasury Alliance, agrees. "There has never been a mass market for treasury technology. Thomson wants to create one," asserts Wallace, noting that there are plenty of midsize treasuries that still use spreadsheets to support their operations and cannot justify the cost of subscribing to Bloomberg or Reuters. "They'll cross-sell to each other's customers, of course, but the big gains should come from opening a market that is new to both Selkirk and Thomson. And with a low price and solid integration between the treasury software and the information feeds, they should have something pretty potent to sell."

While SunGard may feel pricing pressure on some of its models that compete with Selkirk, nobody expects SunGard to be forced into a major strategy change overnight–or even necessarily to lose business, given its own array of ASP products. One possible long-run scenario: SunGard might have to consider some kind of formal alliance with a Bloomberg or Reuters if the Thomson package of software and data proves attractive to the market.

Meanwhile, size alone will open new doors for Selkirk. There are due-diligence hurdles that stop some companies from entering strategic relationships with private companies with annual revenues under $50 million (Selkirk pre-merger), explains Wachovia's Jeffery. "A $7 billion public company like Thomson is presumed to be more stable and have more staying power."

SIZE MATTERS

This becomes particularly important for smaller companies looking at Treasura or other Web-based workstation products. "If you're going to use an ASP-hosted workstation, you'll be totally dependent on whoever drives the server. You want to be sure you're working with a provider who has the resources and staying power to keep the servers humming or to negotiate a good contract with one of the big server farms," Wallace points out. Companies that were leery about entrusting server management to Selkirk will be less concerned about doing so with Thomson, he suggests.

For now, Selkirk will keep its name, its Vancouver offices and its entire staff and operate as a quasi-independent business unit. Thomson's modus operandi is to buy strong niche companies, fund them, let them run themselves and set high targets for sales and profitability, Wallace says. "They don't micromanage, but you'd damn well better make your numbers," he observes.