Legacy Payment Switch Conversion (Part 1)

Over the past couple of years, I’ve been involved in some successful ‘legacy payment system’ conversion projects.  In fact, that’s the one of the main themes of my blog: detailing the transition of the payment systems domain away from specialized architectures and computing practices and into the mainstream of computing on the code, server, database and project fronts.  Now, with the unveiling of some notable strategic shifts by the payment industry’s largest software vendor, interest in legacy payment system conversion has grown more acute. 

In the 80s and 90s, the two dominant payment systems offerings were S2 Systems’ ON/2 (and its successor, OpeN/2) and ACI Worldwide’s BASE24.  Our successful conversion customers are those who saw the writing on the wall in regards to the future of these offerings.  They made proactive, strategic decisions to look at new-generation alternatives.  Now, ACI has put the writing on the wall in large capital letters: having bought a flailing S2 a couple of years ago, they’ve already issued end-of-life (or ‘sunset’) letters to all ON/2 and OpeN/2 customers.  You can’t say this is a bad strategic move: they took a competitor out of play at a cost that has probably already paid for itself.

They’ve gone one step further and EOL-ed BASE24 as well.  To clarify what I’m talking about here:  BASE24 is the “[ACI] product line [that] operates exclusively on Hewlett-Packard Company ("HP") NonStop servers.” [Originally, these were Tandem computers until H-P bought them….or, more correctly, until Compaq bought Tandem and H-P turned around and bought Compaq.]  That’s taken from ACI Worldwide’s 2007 10-K.  ACI is phasing out BASE24 and going all-in on BASE24-eps.  Again, the official product description from the ACI’s 10-K:

BASE24-eps is an integrated electronic payments processing product that supports similar features as BASE24, but uses a more modern set of technologies and architecture. BASE24-eps uses an object-based architecture and languages such as C++ and Java to offer a more flexible, open architecture for the processing of a wide range of electronic payment transactions…it represents the future platform to which current BASE24, ON/2, OpeN/2, and AS/X customers are expected to migrate over time…[it] operates on International Business Machines Corporation ("IBM") zSeries, IBM pSeries, HP NonStop, HP-UX and Sun Solaris servers

The language there (“it represents the future platform to which current BASE24, ON/2, OpeN/2, and AS/X customers are expected to migrate over time”) hints at official EOLs for those platforms, but dances around the subject.  The latest 10-Q from the company is clearer on the subject:

We are maturing many of our retail payment engines. These products were developed or acquired by ACI over several years and include BASE24, TRANS24-eft, ON/2, OpeN/2 and ASx. Our strategy is to help customers migrate to our next-generation BASE24-eps solution as we discontinue standard support for previous products.

Well, that’s relatively clearer.  The word ‘maturing’ here is ACI’s gentle way of telling customers that it’s yanking support.

The upshot?  If you took a snapshot of the year 1992, BASE24 and ON/2 split the lion’s share of the payment switch marketplace…loosely along an 80/20 line re. relative market share.  Now, anyone from that era still operating on those platforms is being put into play by ACI. 

There are three possible directions for organizations put into this position:

1. Stay with what you’ve got and use third-party support organizations (or your internal team if you’ve built up the requisite expertise) to do the needful.
2. Do the proscribed ACI route – do the BASE24-eps thing and enter into the ACI/IBM ‘migration factory’ (more on that in a subsequent post).
3. Consider your strategic alternatives in the marketplace.

If you’re reading this post and have come this far, I suspect you’re doing your due diligence regarding option 3. 

Comments

[Mike Aston, CEO Distra Pty Ltd]

Hi Andy, have a look at our website www.distra.com and you might find it interesting. We are competing head-to-head with ACI/IBM and the Base24 migration strategy in various parts of the world. All is not what it seems in the Base24eps story - but I am sure you know that. Happy to chat if you want more info on Distra. best regards Mike

[Laurent Laperrousaz]

Your blog is very interesting and as Mike Aston mentions Distra solution, we at Lusis are also competing ACI and other vendors on Electronic Payment systems with a very high level of performance.

Best regards

Laurent

[Adrian Hausser]

We have been inundated with ACI customer requests around the world for help understanding either or both of a) what the real industry experiences are with migrating to Base24-eps?, and b) what the real range of alternatives looks like and how do they really perform?

In order to answer this properly rather than just a bar conversation we put a team of payments practitions (not researchers) and carried out several months of interviews and analysis. We have now published the results in a report entitled "Card Acquiring Products: An independent Assessment of Products and Suppliers, 2009 Edition". We looked at the world's top products (including Base24-eps), product companies and customer experiences and objectively compiled the results. We then also hold workshops with banks, processors, product companies to help them fully understand the assessment complexities and process, opportunities, challenges and implications longer term. The results actually surprised us in a couple of areas.

Happy to discuss more as people need. Report overview is http://www.payxintl.com/publications.html

Linkedin discussion group is Card Payment Acquirer and Issuer Systems Users & Experts
http://www.linkedin.com/groupRegistration?gid=1464277&trk=anetsrch_join&goback=%2Egdr_1234543720409_1

Its a fast moving market these days and will be lots of fun for the next 5 years at least :)

Enjoy,
Adrian

[Andy Orrock]

Thanks for adding these thoughts, Adrian.