State Street’s Foray into Big Data

State Street, the influential Boston-based custodian bank with over $23 trillion in custodial assets, is in the midst of a project that remaps the routes to a custom-built data warehouse. The firm will be able to transport real-time, proprietary market analysis to clients, who in turn will be invited to shift their accounting, security and database systems onto State Street’s private cloud.

This initiative is massively expensive-estimated at $100 million a year for three years-but Jay Hooley, now the firm’s chairman and CEO, projects the bank eventually will reap $575 million to $625 million in cost savings by automating tasks such as software development.   The private cloud also promises a new revenue stream from clients that choose to park their data and back-office applications on the network, culling them as needed on an on-demand basis.

The project,  a year away from completion, it being closely watched, not only because of State Street’s influence in financial services as a major custodian bank, but because of the general direction it may provide as to the way big data can be turned into a revenue generator.  For full article, click here.

Big Data

Hudson Pacific Capital Partners is interested in Big Data.

According to Gartner, Inc., Big Data is among the IT technologies moving fastest through the “Hype Cycle for Emerging Technologies”:

 http://www.cmswire.com/cms/information-management/gartner-big-data-smart-devices-cloud-computing-maturing-as-technologies-boyd-rises-017038.php

Gartner researchers point out that what they are measuring is the “hype” around technologies compared to what has actually been delivered, and that knowledge about where a technology is in the cycle can have investment and strategic implications.

SaaS Increasing Valuations

Software-as-a-service, or SaaS, businesses, with monthly billing models instead of the traditional license and maintenance fee structure, deals have been increasing lately.

Many firms are scouting for SaaS-enabled companies to add to their portfolios, for a few key reasons:

  • It is not capital-intensive
  • The company can borrow a lot against it
  • The company only has to take care of server costs, for the most part, so incremental margins stand in the 80% and higher range.
  • The recurring revenue is a magnet for PE firms.

Players in the space include Veronis Suhler Stevenson, which bought financial software company Strata Decision Technology LLC last summer. SDT’s signature product StrataJazz offers a SaaS suite of corporate financial analytic services. Pamlico Capital invested $28 million of equity in T2 Systems Inc., a provider of SaaS to parking facilities, in October of 2011.