Avanade Hired To Help Launch Merrill Lynch Spin-Off

Having identified a growing demand for online applications that automate the capital-raising process for financial institutions, Merrill Lynch & Co. last month moved quickly to spin off its i-Deal technology platform as an independent company. I-Deal LLC Tuesday indicated that Avanade Inc., a technology integrator formed last year by Microsoft and Accenture, is playing a key role in ensuring the spin-off gets its hosted capital-raising and securities-issuing applications out to the market early next year.

If Merrill Lynch didn't make its i-Deal equity and capital-raising technology available to the market, financial-services firms would likely start building their own, says Frank LaQuinta, the company's chief technology officer. But when Merrill Lynch introduced i-Deal in 1999, it was an internally developed application that only Merrill Lynch broker-dealers could use to manage different aspects of raising and investing capital. Merrill Lynch last year chose Microsoft's budding .Net Framework to transform i-Deal into a platform that could be extended beyond its own broker-dealers to other financial institutions involved in a transaction. "When we did our analysis, we felt our developers would be more productive using Microsoft tools, particularly .Net and XML," LaQuinta says.

To ensure that i-Deal's Internet-based technology could be released as a hosted service to the financial-services market, Merrill Lynch hired Avanade to help rearchitect i-Deal using Microsoft .Net BizTalk server. This allows i-Deal to take data from different applications and integrate them into a single SQL Server 2000 database. I-Deal and Avanade also built the system to make use of Microsoft's XML Web Services, which will help users communicate through the i-Deal platform regardless of the IT platform they use at their individual companies.

To make its i-Deal technology truly independent, Merrill Lynch decided to spin it off as an independent company. Last month, the financial-services firm teamed with Microsoft, investment bank and brokerage firm Salomon Smith Barney, and financial technology service provider Thomson Financial to launch i-Deal LLC.

A new issuance is a collaborative process in which orders may be taken from various parties. That's why it's important that relevant information about a transaction resides in a single repository, LaQuinta says. If, for example, Merrill Lynch and Salomon Smith Barney are running an initial public offering that's a global transaction, having access to the same data in real time reduces room for error.

I-Deal will host its platform with Britain's Cable & Wireless plc. The new company had originally contracted to have Exodus Communications Inc. host the platform, but the job transitioned to Cable & Wireless late last month when it bought Exodus for about $850 million in cash.