Although investment managers need to be concerned about functionality when conducting a trade-order management and compliance system search, a report conducted by Cutter Associates highlights the attention that a buyer must pay to the vendor selling the system. Cutter reviewed 20 different trading and compliance systems on behalf of the TechnologyCouncil-a board comprised of its buy-side clients that include Scudder Investments and the Oppenheimer Funds-and found that these younger and cash-strapped vendors are having trouble answering the needs of the marketplace. Citing the total combined revenue for the top firms as $71 million, the report finds that these vendors are having trouble maintaining further enhancements to their products as well as supporting their current clients. "Some of these companies are risky," says Mark Bobseine, president. "Their financial conditions are of concern and this means that buyers and current users of these systems have to keep their eyes open." Bobseine explains that rapid changes among the vendors, including ownership changes, has also lead to instability and uncertainty within the customer base and among prospective buyers. He points to SS&C's acquisition of Antares, TenFold's acquisition of the Longview Group, and MacGregor's acquisition of Merrin Financial as clear examples of instability within the arena, which he does not feel is necessarily over. Speaking about all the vendors, he adds, "The industry is changing very rapidly and some of these guys may not be around in the future." Bobseine believes that SS&C has done a good job of integrating Antares into its product fold and that it has "great potential," but that the company still has much work to do to make it competitive with industry leading products. TenFold, on the other hand, still has a long road ahead. Bobseine explains that the company is having a difficult enough time upgrading Longview 2.3 to Longview 2000, not to mention its plans to roll out an entirely new trading system, TradeXpress, by the end of the year. "The Technology Council members-and there are many Longview clients-are skeptical that TenFold can accomplish this," he says. "They have a major challenge to keep their clients happy as they go through this transition, and their first challenge is to complete the upgrade to Longview 2000." The Cutter report also speaks to the dirth of robust, fixed-income trade-order management systems on the market. Most of the industry leading vendors have focused primarily on equities, and those that are adding fixed-income functionality are doing so slowly. The report finds that buy-side firms have a choice to install a combined system which "short-changes" the needs of its users or to install two systems. "To be honest, the marketplace for stand-alone fixed-income systems isn't that strong," Bobseine explains. "It's not as easy to automate fixed income because firms manage and trade many different ways, so it's hard to write a system that will keep a lot of people happy." In the case of fixed income, Bloomberg has emerged as the only serious contender. "We have to wait and see as to whether they commit to building a strong equity trade-order management system," he says. "If there's any firm that can come in and shake things up, it's Bloomberg."