The Secret Merger: Eric Bierry on Building 74Software

Caroline Béguin: So what’s the vision behind this new entity? 

Eric Bierry: You know, the first vision was to simplify the fact that a software company has to operate like a software company, and being in a services group was generating complexity because, of course, it’s not the same KPI, it’s not the same way to operate the business. So that was the initial objective, to simplify and to act as a software company. The second, I would say, key reason to build the vision is to consider that in SBS we are processing data, so from a processing platform to an engagement platform, being in SFP or in SBP, but we are processing data. Axway is a leader, and Gartner is seeing that, by the way, in transferring, securing, orchestrating data. So if I’m looking at my clients inside SBS, the financial services industry, they are expecting to rely on very strong players to process their data, but also to increase, or I would say to augment, the usage of this data. And of course, everyone is talking about AI, and the only way to do AI generating business outcomes for our clients is to be able to leverage all of this data with the quality of data, with the data real time. And the combination of the Axway product and the SBS product, at least for this financial services industry, I think is the unique combination into the market and you can compare with many other players. I think only us today are able to provide that business added value to the market. 

Caroline Béguin: And what’s the overall plan behind this merger? What do we aim for together? 

Eric Bierry: Of course, this is only one year, so when we are merging, even if we are saying that we are coming from the same DNA, Axway was a spin-off in twenty eleven from Sopra at that point in time. We are still learning together because we know that we cannot completely merge the organization. We are not addressing our clients at the same level, even if we do have some clients in common. And of course, we need to find the best way to leverage what Axway is able to provide with their experience and what SBS is able to provide with our experience. And from that point of view, we have started to have synergies. These synergies are mainly linked to the business, where Axway is super strong in some countries, including North America. SBS is really strong in the UK,for example, and in Africa. So the idea is first to see how we are able to augment the value prop from each company to address their clients. And of course, these synergies, we see them mainly on the financial services because SBS is only doing financial services. We are also looking to gain efficiency in the way we are operating the company. So we are public, meaning that we have a lot of obligations, and we are trying to have a single way to look at the figures and the consolidated figures. We are also trying to leverage a single view from a legal perspective, but it’s the very early beginning. I should say that it’s gonna take two, three years, and we don’t want to generate any disruption for our clients, but also for our people. So that’s where we are today. 

Caroline Béguin: So this is a huge change for SBS, this merger and also this new entity, Seventy-Four Software. How did you experience that change? 

Eric Bierry: Personally, I would say there were three phases. The first one was when it was a secret. And you know, I did have to lie to my people, and it’s very difficult for me ’cause I did build the leadership team in the last three, four years. They are still with me today, and the trust between us is really important. And of course, as it was a transaction with two listed companies, it was a very difficult secret to keep, I should say. And there were many days where my team did not know where I was. Which never happened in the past. Because of course we were preparing, and it was very difficult. So there was a mix of excitement and many mornings when I was waking up, I was not very comfortable to continue to, I would say, not to lie, but just to keep the secret even with my super close team. The second phase was when I was able to bring them under NDA, so let’s say one month before the announcement. And of course then the excitement to make it happen. So from one month before the announcement, so we are in January, up to I would say transaction itself. And of course it was different because the idea was to make it happen. The idea was to explain, to communicate a lot and of course to secure the deal itself. By the way, it included our clients because we were receiving a lot of questions from our clients. The third phase is not an easy one because the day you start, it’s like a new beginning because I was personally so involved in preparing this that the day it’s done, you wake up and you say, “What I’m gonna do today?” It was really, really uncomfortable, let’s call it like this also. And of course then you start to learn, you start to engage with your client, with your people, with your shareholder also because, then of course four months later we were publishing for the first time the consolidated figures for this new group. So I did have doubts, to be honest, because it was easy to design something like this, but when you have to run it, of course there are many things not happening as per plan. That’s our life. And then sometimes you’re asking yourself, “Was it a good idea? Was it a good choice?” And I think the way month after month continues to deliver the initial plan of SBS, I think it was the first priority and it was reassuring a lot for the team and for our clients. And then progressively see the benefits of being in this new group. You are reducing the doubt. You keep some doubt because we will need, I think, one to two years more to see the entire benefit. So, it was like climbing and leaving mountains during this last year and a half. By chance I have a strong team and we were able to stay strong together to manage the situation and I hope that including our clients and our people, disruption has not been so, so important. 

Caroline Béguin: So now that this merger has been completed, I’m wondering where does SBS fit into all this? Has our model changed and what place does SBS occupy in this new landscape? 

Eric Bierry: It’s a difficult question because if I’m looking at the total revenue of Seventy Four Software and looking at Europe and Africa, eighty percent of the total revenue, so eight zero, it’s for financial services. So of course we can look at it like we are a company like SBS standalone was in the past, delivering value to the financial services industry. When I do include North America, of course the revenue of SBS is lower and Axway is delivering around one hundred and fifty million USD. And the impact or the presence in the financial services industry of Axway is lower of course in comparison because they do address more transfer solutions including logistics, supply chain, pharmaceutical, public sector, so it’s not only financial services. And it’s a very difficult question because we have the opportunity tomorrow to continue to acquire and we said from the beginning that we would like to become a one billion software company. And of course the organic growth in the next five years will never be supported to move from seven hundred to one billion. And we have then two options. One is to bring more value within the financial services. That’s one option. There are many, many domains where we do not operate from a business process point of view on our client side, but also from a geographical point of view. And we have the second option to say, “Oh, we are really a portfolio software company,” and then we could be acquiring in a domain which is not at all covered by Axway and SBS today. We have not taken any decision. By the way, we said it is not gonna happen before ’26. So we need to work and we need to see what’s the best benefit having that portfolio strategy or continuing to augment the portfolio and the value prop for a specific domain such as financial services. So the place of SBS is important because more than fifty-five percent of this new group, but it’s too early at the moment to consider that this will become the strongest driver for the future because of the financial services. 

Caroline Béguin: And you mentioned earlier that you wanted to include our clients in this merger and in these changes. Should our customers expect any changes? 

Eric Bierry: You know, when you announce such a kind of transaction, all your clients are telling you, “Please don’t change anything. I want the same person taking care of me. I want the same contract. I want everything to be as it was before.” So that’s the first reaction and it’s a human behavior I would say. One year later, and especially because I think we have been able to maintain that continuity and business continuity with them, now they are asking us, “Okay, what can I have more? Can I have more of Seventy-four Software and not from SBS itself? And that’s what I was calling earlier that augmented portfolio. So if you’re coming with integration capabilities or API capabilities in addition to what you’re selling and implementing, they should see a benefit. And if they start to see the benefit, and with a very strong relationship, this will be opening new doors and new potential business for the future. So I think that’s what they do expect. But you know, a client is usually super simple. Priority one, business continuity. They expect from you to secure that business will continue as per plan. The second is then, I would say, trying to be in their eyes for us. So meaning we need to understand the way they want to operate their business, and we need to follow to allow them to continue to, let’s say, bring more value to their clients. And the third, without forgetting the past investment, some of them have been our clients for more than twenty years, they consider the investment they have made, so the money they gave us simplifies.  They expect that you don’t forget this. So meaning that if they start with one core with you, they expect you to continue with this core and to bring innovation on top. So these are their three priorities. And if the combination Axway and SBS is contributing to these priorities, they will be following. 

Caroline Béguin: You said that the clients were expecting more of Seventy-four Software now. Can you share an example of what they are expecting? 

Eric Bierry: I have many. When we were coming in front of clients with open banking capabilities, we were letting them manage the API orchestration. Axway was obviously a partner, but we were not so engaged in delivering value and especially operating that value for them. Today, none of them is expecting us to come only with a business domain approach. They are expecting us to say, “Oh, you did innovate on open banking functionally. You did innovate on the API orchestration.” And by the way, there is a new product called Amplify Fusion from Axway, which is exactly driving that API orchestration. And now they consider that there is a single product with that combination in the market. So that’s what we did in North America with Origins Bank. That’s what we are proposing to all our clients at the moment in Europe and in Africa. So, this is an immediate, immediate benefit. Yes. 

Caroline Béguin: And in terms of strategy, where are we headed in the next five years? 

Eric Bierry: From an SBS perspective, you mean? 

Caroline Béguin: Yeah, sure. 

Eric Bierry: AI is there, so it is difficult not to start with AI. So we are working first on enabling all our products to propose what we have called a data platform to our clients. So meaning that there will be a single data platform, whatever the product from SBS will be processed behind. First, because we need to continue to open our product and our course. Second, because our client, they do not leverage so much data they are having in the product from us they’re using. And of course, if we want to leverage that data and if we want to bring that innovation to our client, we need to build with them and I think with them is very critical. What are the new use cases and what should be the new added value they will be providing to their client, leveraging AI on top of our data platform? So I think the next five years we will be pursuing this, meaning protecting our course, ad version, industrialized, secured, cybersecurity is very critical. The data platform on top and bringing innovation, and especially including AI capabilities. But I’m convinced that many of the AI use cases will not be coming only from us. And I think that the more we’re gonna go in the next five years, the more the ecosystem is gonna make a difference for our clients. And we need to be part of that ecosystem. And I think if the data is processed by us, we are the best place in that ecosystem. But we need to provide these AI capabilities, and it’s the very, very beginning at the moment. 

Caroline Béguin: So following this merger and these changes, we have created five new Connects this year. 

Eric Bierry: Yeah. 

Caroline Béguin: So we’ve been to Morocco, Belgium, France, UK, and the last one being completed in the US. 

Eric Bierry: Yeah. 

Caroline Béguin: What was the objective of these events? 

Eric Bierry: Super simple. The name is Connect. It’s connecting with our clients. I personally do consider that they know their business better than us. That’s a fact. It’s their business. So the best way for us to capture the trajectory of their business is to spend time with them. So we need to have the opportunity to first listen to them, second, bringing them together to exchange on our product, on our roadmap, on our willingness, where we do want to invest and it’s a fantastic opportunity to check that we are moving into the right direction. And this event has been a great success because first, we were happy to see the participation at a very good level, I should say. The quality of the exchanges were super strong, and I think it has accelerated what we need to do in our understanding, in our way to prioritize, in our way to engage with them. It’s like you do six months in one day at the end of the day. And it was the first time we’re hesitating to do that, and I think it’s a very good experience. The survey from them is very positive, by the way, so it’s very important. And if the next question is do I plan to do it again next year? The answer is yes. But it was very important to stay focused where we are very strong today. So the UK is the second country for SBS. It’s close to one hundred million pounds of revenue, so it’s becoming very important. So UK, Belgium, Morocco to cover the African countries, France of course, and North America for the first time also, so it was very important on that side.

Caroline Béguin: You said the survey is very good. What was the customer feedback? Do you have examples? 

Eric Bierry: First, they were happy with the quality of the work, the quality of the presentation, but also our willingness to involve them not only for presenting, but for debating on several topics around our product regarding their business. So I think it was the, really the first remark, comments we did have. The second, and it’s sometimes surprising to me, is that they are really happy to connect with their peers. And they don’t have so many opportunities to finally connect with their peers or their peers being their competitor, by the way. But they know that there are many, many topics and especially where we do operate SBS, where it’s not really competition, you know. When you do a loan servicing, the ability to differentiate yourself with another one on the way to drive the servicing of a loan is really limited. When you deliver payment capability, the ability to differentiate is also quite relative. So they are happy to share where they can have first benefit on cost and efficiency, and they consider that if they do apply the standardization we propose, this should be helping to reduce the TCO. And second, they are happy to benchmark where they are in terms of innovation. So they are all having the same question, “But do you really have an AI use case on the market for your client?” So I don’t know if they are all saying the truth when they do answer but it’s for them really a benchmark opportunity. And being the player/the partner, organizing that ability for them to connect between them, I think we can be proud of that. Yes. 

Caroline Béguin: Eric, thank you for sharing your insight on what this year of transformation has meant for SBS. But before I let you go, I wanna know what is your personal feedback on the SBS Connect events. So that’s where we will pause for today because the next part of our discussion deserves an episode of its own. So in the second part of this special episode, we will talk about the US market, specialized finance, open banking, and a very special anniversary coming up, the twenty twenty-five summit. So you don’t want to miss the next episode.