Polaris in alliance talks for banking software products
Polaris Software is in talks with an international software group for a strategic alliance. The proposed alliance would jointly work on developing new products in the banking domain. It would be Polaris, which would hold the intellectual property rights for the international version of the products.
Polaris focuses on the banking, financial and insurance sectors, which yield around 60% of the company’s revenues. The company has a strong association with the Citibank group which accounts for 35% of the its revenues in FY99. In terms of business profile, migration/re-ngineering/maintenance contribute around 46% of its revenues, 38% accrues from new application development with the balance coming from ERP (5%) and product enhancement services (11%).
The proposed agreement would definitely enhance Polaris’ image and it could possibly help the company to tap other international banks. It is important for software companies catering to sectors such as banks, insurance companies and financial services to have existing client referrals. This could be easier with tie-ups with international software companies.
The market rates Polaris as a quality software stock primarily due to entry into a new vertical domain viz. insurance, its enhanced focus on retailing solutions (it has Crossroads, Nanz, Big Shopper as its clients), aggressive recruitment abroad and impending reduction in client concentration.
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