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Wednesday, September 23, 2009
Born in the Recession
Omgeo learned lessons in a rough 2001
By Galen Moore
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Sometimes your opportunity is gone before you even launch the company.
That’s what happened to Omgeo LLC, a joint venture founded in 2000 by the electronic trading divisions of Thomson Financial and the Depository Trust & Clearing Corp. (DTCC) to take advantage of expected regulatory changes requiring one-day trade confirmation.
Then the stock market plummeted, the World Trade Center towers fell and the tech bubble breathed its ragged last, and the regulatory changes were off the table. So Boston-based Omgeo had to switch gears from speedily settling trades to showing the value of their technology to customers. “We were conceived during a period of what Mr. Greenspan would call ‘irrational exuberance,’ ” said Lee Cutrone, Omgeo managing director of industry relations.
Omgeo now had to prove to brokers and investment managers that faster trading with its software could save them money, said Bill Hodash, who worked at Omgeo before returning to DTCC as managing director, product management and marketing.
Cutrone, a Thomson employee since 1991, joined Omgeo at its launch. Eight years later, the lessons of 2001 are serving Omgeo well. Its services are part of a customer’s infrastructure and don’t get cut from budgets, Cutrone said. Even when firms collapse — as Lehman Bros. did a year ago — trades go somewhere else. Since 2001, daily trade volume via the company’s core product, Omgeo TradeSuite, has increased by 53 percent.
But when trade volume drops in a recession, Omgeo’s revenue slows. To counteract that, in recessionary times the company has focused on adding value. For example, this year Omgeo aimed to eliminate paper duplication of trade confirmation. New versions of Omgeo’s software provide electronic confirmations that link to a secure database, Cutrone said.
“Clients immediately focus on the expense side. They’re always looking to save money. Our learning experience is, during these times we have to improve the value proposition of our services,” said Cutrone.
Another entrepreneur’s view on the ‘01 financial scene
When the dot-com bubble burst and the World Trade Center towers fell, Todd Christy was in the unenviable position of selling IT consulting services to Wall Street. The events of 2001 brought the now-president and CTO of Pyxis Mobile Inc. and his company to a crisis.
“The human impact was the first thing, by far. We had clients that were in the towers. We knew people who were affected. From a business standpoint, we were affected as well. Pyxis was going through an interesting transition at that time. We founded the company in 1998 as a systems integrator. We were certainly in a crucible by that first half of 2001. Services were going offshore, the dot-com bubble had collapsed, and 9/11 certainly didn’t help us. These three events pushed us to the business we’re in now. We committed to being a mobile software company.”
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