As I drove home from work yesterday, I listened to the reports on Bloomberg Radio about a possible new company called MorganStanleyWachovia or MorganStanleyCiti.
Most people think about the financial ramifications of such a marriage. I think of the ramifications for the IT departments, especially focusing on trading technology.
I think that both of the combinations would be extremely difficult to integrate as far as IT goes. The IT culture of Morgan Stanley is so much different that any other place (with maybe the exception of Goldman). Morgan is very much of a build-it-yourself culture. They have their own messaging system (CPS) and their own ticker plant (Filter). The mad Russian scientists who populate the various IT departments pride themselves on the code that they right. It is much much different than the IT culture that you find in large banks like Citi, Wachovia, Well Fargo, etc.
It is public information that a lot of Morgan Stanley talent has recently migrated to Citi. Vikram Pandit is ex-Morgan, and you see many more ex-Morganites starting to populate the executive ranks. So, the "pump is primed" at Citi for a Morgan Stanley merger, at least at the executive levels. But the IT cultures are so radically different, both in terms of culture and technology, that I think that it will take a very long time to integrate.
Wachovia always had the relatively laid-back Charlotte way of doing things. Lots of legacy technology swimming around their halls. A few years ago, Wachovia established a base in New York, and was able to lure a lot of good Goldman people away. But, there is still that back-and-forth between New York and Charlotte, and most of the Wachovia people that I know in New York have to fly to Charlotte on a regular basis to get their marching directions. This is not the Morgan way of doing things.
BankOfAmericaMerrill is going to be another fun ride on the IT-integration-ferris wheel. Merrill has some really good technology. Some is very new and some is really old (the CICS-based systems that were written 20 years ago are still fairly important).
This is a time when Integration Architecture might be the hottest skill set on Wall Street. I expect boom times for companies like Accenture, IBM, Capco, and the other large consulting firms that specialize in technology integration.
©2008 Marc Adler - All Rights Reserved.
All opinions here are personal, and have no relation to my employer.
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2 comments:
"But, there is still that back-and-forth between New York and Charlotte, and most of the Wachovia people that I know in New York have to fly to Charlotte on a regular basis to get their marching directions"
Interesting observation - what you fail to mention is that they fly back to charlotte to get direction from the senior people hired from goldman and morganstanley :)
culutures aside, Wachovia has built competencies in Electronic Trading, Algorithmic engine, smart order routing, FX, Energy and Derivative processing,
Multi Asset Risk and finally CRM / Sales Desktops.
This is the ulimate Buy vs. Build. Acquire a company and takeover the leading edge technology that was built by highly technical teams long in financial service experiance.
Of course, the whole ball of wax has turned topsy-turvy in the mere two weeks since I posted the original comment. Wells Fargo vs Citi vs Wachovia might serve as a distraction for months to come, and if Wachovia people think that their future is uncertain, then they might up changing jobs before any merger is done. all of that ex-Goldman and ex-Morgan talent that Citi and Wells covets might end up at BofA !
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