NYSE Euronext contemplates insourcing IT

The NYSE Euronext exchange group is considering bringing its IT operations in-house – a move that would have a major knock-on effect on its joint IT venture with Atos Origin.

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The NYSE Euronext exchange group is considering bringing its IT operations in-house – a move that would have a major knock-on effect on its joint IT venture with Atos Origin.

Atos Origin chief executive Philippe Germond confirmed that the two companies are in discussions about NYSE Euronext potentially insourcing its IT as Atos released its third quarter results. It is expected that discussions will be concluded by Christmas, an Atos Origin spokesperson said.

At present, NYSE Euronext’s IT is provided by Atos Euronext Market Solutions (AEMS), a 50-50 joint venture between the two firms. AEMS was set up in 2005 to manage Euronext’s IT operations, extending a previous partnership between Atos and Euronext. The new company gained the IT division of Euronext.liffe, the derivatives arm of Euronext, along with middle and back office systems from Atos and its 50% stake in Bourse Connect.

AEMS provides IT to a number of international exchanges and clearing houses and more than 20 banks and brokers as well as to NYSE Euronext. When it was established, it was expected that services provided directly to Euronext would make up less than a half of its annual revenues of €350m (£250m).

But the insourcing of IT at NYSE Euronext would have a major impact.

The news that this is under discussion comes amid a shake-up at NYSE Euronext. Just a month ago, the exchange confirmed the abrupt departure of Tarak Achiche as the exchange’s head of IS and from its management committee. Achiche left the company “to pursue new career options”, the exchange said.

Earlier this year NYSE Euronext announced that it would advise the Tokyo Stock Exchange on several key IT areas, under a new agreement.

In its third quarter results, Atos reported an organic growth rate of 6.6% after the continuing turnaround in its previously troubled UK business, which has returned to profit with an 11% growth for the quarter. “The good performance of the United Kingdom confirmed the expected effect from the ramp-up of the new large contracts signed during the second semester of 2006,” the company said.

Last week Atos secured £20m worth of contracts through a deal with Capita that will see it providing hosted infrastructure services to support key Capita clients, including insurance giant Resolution.

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