Intellect Design Arena

Let us talk about competition.

As per Forrester’s report (above post), Temenos products have no weakness- rich in functionality, a large number of installations and Temenos investing a huge amount in R&D.

Oracle:

The report cannot say the same about Oracle (Oracle Financial Service). They have a number of Tier 1/2 clients and a large number of installations, but their product is a little behind in embracing the latest technologies. However, the major constraint - in my view- is that clients have to use Oracle Product/cloud if they want to use this product. This is a major game changer from a client’s perspective. If the client is already using Oracle extensively, then they are the major contender. Otherwise, Oracle is constraining clients’ ability to use the underlying platform (e.g AWS, Azure) of their choice. Also, Oracle is known to be extracting a lot of value out of their licenses (they are expensive), so from a client’s point of view, this is a major issue, and I get the impression that Oracle may be losing deals due to this cause.

Intellect’s products, on the other hand, use the latest technologies/architecture, putting them in a prime spot regarding technical capability.

Intellect has become (consistently) profitable only last year (Fy21). When a major bank wants to select a technology platform for their core business, amongst other things, they also look for the vendor’s financial stability. Large deals commit banks for the product for a number of years (maybe decades). For example, some of the major banks in the US are still using legacy IBM mainframes (30 + years old technology) for their core banking operation. Hence they want to see if the vendor can withstand financial difficulties and continue to invest in upgrading products. Until last year (prior to FY 2021), Intellect was barely profitable, and its balance sheet was rather weak. Lack of financial firepower could be their weak point earlier, but they have been reporting decent profitability for the last couple of years. So weak balance sheet may not be much of an issue now IMO. Mr Jain repeatedly mentions that Intellect is one of the fin techs which is profitable.

Even from the competition’s point of view, Intellect is rated very highly. In the 2022 Analyst day meet- Highly recommend, Temenos rated Intellect as the nearest competitor.

When a top competitor considers Intellect as the nearest competitor, I think it speaks volumes about Intellect’s product.