It's finally over. ACI has acquired S1 and has entered into what ACI calls the S1 integration phase. What this means is that S1 is a big mouthful even for the payments software giant, so they have to see how best to integrate the various pieces of S1 into their existing offerings.
By reading the ACI announcement, it appears that all S1 divisions except the payments division will have a future with ACI, as they have product offerings complementary to the pre-acquisition ACI product suite. The future of the payments division and the S1 Payments Platform is not as certain and the ACI announcement is somewhat vague about it. There's talk about "functionality overlap", and of creating "a best-in-class product". These phrases can be interpreted in very different ways.
From the management's point of view, it doesn't make sense to retain two different product lines that overlap significantly. It consumes resources to maintain and upgrade two different products. It might also be confusing to prospect and existing customers.
On the other hand, the S1 Payments Platform has a very strong presence in the Retail market so it's not a trivial decision for ACI to summarily EOL this platform. But retaining it in order to get a piece of this market leads again to having two different product offerings...
I believe that the big unknown here is how will Postilion customers react to the ACI-S1 merger and, if Postilion is to be scrapped, how well prepared is ACI to migrate those customers to Base-24 eps (well, the big ones at any rate). For the time being, I'd expect that ACI will keep rolling Postilion bug and mandate updates but the future of Postilion is at the moment unclear, to say the least.
And what of the state of the market? ACI was the biggest kid on the block before the S1 acquisition. With the customer base of S1, the runner up is now a distant second to ACI and the market for switches is starting to look like the market for search engines.
This can be both a blessing and a curse for ACI competitors. On the one hand, integrating S1 into ACI is going to be a difficult exercise regardless of how it's done. This will surely create opportunities for smaller switch vendors with differentiated offerings. On the other hand, ACI as the unquestionable market leader carries a lot of weight and can use their dominating position in various ways in order to make it difficult for other vendors to get customers to sign with them and not ACI.
