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Futures & Options Week - December 2002
FFastFill. Out with the old

The past year has been incredibly hard for the independent software vendor (ISV) market. A deeply unsatisfactory business model, unable to benefit from the record volumes seen at the world’s derivatives exchanges, twinned with intense competition in the market itself, has left many ISV’s on the brink of collapse.

FFastFill is one ISV that realised it had to adapt or die. And adapt is has, having recently undergone a dramatic strategic review. The end result has seen the firm build on the foundations of the traditional ISV model to add new value as a managed service solution provider.

The expansion has been far from easy, admits FFastFill’s CEO, Chris Stone. “We have been working extremely hard over what can only be described as an exceptionally difficult period. We understood that the traditional ISV concept was not, on its own, the way forward”. In going back to the drawing board, Stone and his team realised that what people really liked about FFastFill was the service it provided. And from this seed, the expanded business model grew. “We have spent much of the past year implementing our new strategy,” Stone explains. “In that time, we have also strengthened our management team, found a new partner and arranged a significant new deal with Dresdner Kleinwort Wasserstein (DrKW)”.

Strategic Focus
FFastFill’s new business model is centred on four main areas:

• Network-delivered services
• Software applications and bespoke development
• Transaction-based front-end services
• Training – e-learning programmes, tutorials and seminars

Single Service
Another key advantage of its new business model is FFastFill’s ability to offer a single service level agreement (SLA); something demonstrated in the recent deal with DrKW. “This model allows intermediaries to contract-out connectivity and front-end applications under one SLA, creating an easy-to-manage and resilient service delivery environment,” says Stone.

DrKW was also attracted to the deal because of its cost transparency benefits and because the bank believed the move would reduce its overall IT service costs. The deal was also attractive because it will enable DrKW to cut sown the time needed to implement connectivity in new markets. In addition, the bank liked the idea of having a scalable IT infrastructure, which will allow it to add clients easily and cost effectively and reduce client-servicing costs.

In order to offer this new type of service, FFastFill realised that it would need to find a partner. As a result, in September, the company signed a Memorandum of Understanding with Thales Information Systems Finance, a firm that specialises in the outsourced provision of the development and management of applications.

Meanwhile, FFastFill continues to see encouraging developments in the US. Its US-based initiative, FFastTradeUS, created in conjunction with La Salle Street Trading, provides direct, risk-managed access to electronic markets.

The fourth element of FFastFill’s new business model involves training; an area that Stone believes holds great potential for the future. The firm’s Train2Trade (T2T) capability allows market participants from all backgrounds – professional through to the retail market – to train on live markets with no cash risk. T2T is currently being used by Chicago Board of Trade as a trading simulator supporting the launch of the exchange’s DOW e-mini contracts.

FFastFill believes that its new strategic focus has secured a more positive outlook for the firm. Breakeven is forecast for 2003/2004. “If you look at our new business model, it is all about value-added service,” says Stone. “Quite simply, the potential for new growth is much greater in services than it is in the traditional provision of applications.”

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