Open Solutions Creates an App Store

Open Solutions is taking a page out of Apple's playbook and creating a development platform, DNA creator, and DNA appstore. This is interesting on a couple of fronts. First, let's discuss what is the same as Apple iTunes?

• There are reviews of each app.
• There is a community forum for developers.
• There are free and paid apps.
• Third parties can and do develop apps.
• Apps are approved by the Open Solutions.
• Open Solutions takes a 30% share of revenues generated, the same as Apple.

But what's different?

• Apps are rigorously tested for compliance, security and functionality.
• Even paid apps can be downloaded for a free trial in the test environment.

Why I think this is a good move and can work for Open Solutions: 1. Their clients are small. They are unlikely to view each other as competitors. Wells Fargo and Bank of America are unlikely to share development applications. If they do they form a JV such as Pariter. Most, but not all Open Solutions customers are much smaller and are unlikely to be geographic competitors. 2. Open Solutions has about half of their clients as credit unions, which will play strongly to a spirit of cooperation. 3. They will take advantage of a growing trend in small app development. 4. They have a clean way for distribution partners to customize and localize. 5. About 10% of Open Solution customers are banks and credit unions of over $1 billion. These guys have a large enough development shop to create apps. 6. Open Solutions has a modern architecture. As I stated in a recent blog, banks don't buy architecture; they buy features and functionality. This allows Open Solutions to translate their more modern architecture into features and functionality. Why I think this is a challenge: 1. Many clients are small and are unlikely to have development capabilities. They will be app buyers, but not app producers. 2. Banks might not be as likely to share code as credit unions. They will buy, but will they create? Overall I think this is a win for Open Solutions and its customers. Customers can get faster enhancements cheaper through the app store. Open solutions gets more developers to help them improve functionality, which is what banks and credit unions really buy. It is also something that competitors with legacy systems will have some difficult emulating, given the architecture of their systems. Will it change the world? Perhaps, but perhaps not. If we look at the roughly 600 customers of Open Solutions and take 10% of that (institutions > $1 billion), we find 60 banks and credit unions. If each devotes 2 developers to apps, that's 120 extra people, assuming 100% participation. Will it help improve the platform. Absolutely. Will 120 developers change the world of core banking? Perhaps.