And even BI and analytics vendors may be able to mount a near-term strategic comeback, Bartels says. However, to do so, they will have to work hard to make their offerings relevant to surviving financial services firms as well as to enterprises at large. Vendors will have to focus "on providing software that's seen as a 'must have' as opposed to a 'nice to have.'" Over the long run, such a trend could lead to BI and analytics software geared more toward real-world needs than the arcane requirements of investment traders. "For many vendors, it will mark a return to the real world," he says.
SOA infrastructure, for instance, is widely used by financial services firms for transaction integrity and scalability. Therefore, SOA vendors who targeted financial services firms can expect to experience many of the same customer pullback and revenue issues as their BI and risk analytic counterparts. On the other hand, since financial services firms didn't play as big a role in driving SOA innovation as they did in the BI and analytics markets, enterprise customers shouldn't see any serious impact on long-term product development.
The same calculation generally holds true for the SAN market, says Mehra, where vendors over the years sold financial services firms an impressive number of systems for managing and protecting vast data repositories. But, as is the case with SOA vendors, SAN innovation isn't heavily dependent on financial services firms, so the damage shouldn't significantly extend beyond vendors' bottom lines, he notes.
For cloud computing vendors, however, the outlook appears somewhat darker. In fact, next to BI and risk analytics, cloud computing vendors may stand to lose the most from an eroded financial services market. Forrester's Bartels notes that some financial services firms led the way in using cloud computing's vast resources to test novel investment strategies and alternative model scenarios. "Not much of that is going to be happening for financial institutions in the near future," he says. The good news is that cloud computing is a nascent market with relatively few enterprise adopters heavily involved in the technology. As a result, any negative impact should be muted and limited mostly to the vendors' revenue streams.
Small vendors are the most at risk
Financial Insights' Capachin says that across all categories the biggest vendor losers will be the small, innovative firms that have "sold well into the capital markets industry." For at least some of these firms, the loss of one or more key customers could mark the end of the road as a viable business. "If it were me, I'd check with my vendors to see their exposure to the financial industry," she says.
"I just think it's going to be a tough market anyways for tech spending, but in particular if you're not a well-capitalized, well-known firm," she says. For survival, many smaller vendors will likely find themselves driven into partnerships with bigger players, Capachin says.