Its precipitous climb helped Hernandez take the company public and then later, take it private again with the help of capital investors Carlyle Group and Providence Equity Partners to the tune of a reported $1.3 billion, including debt, in 2007.

That debt apparently helped lead to its eventual sale, as financial pressures kept Open Solution from continuing what had been its hallmark: continuous upgrading of its core platforms with integrating technologies that could deliver the latest products and services.

That fact had become widely known in the industry, and Fiserv President/CEO Jeff Yabuki acknowledged that in an interview with Credit Union Times the day after the purchase was announced.

“We believe there were two big issues that faced Open Solutions,” he said. “One was the amount of debt they had for a company that size. It really burdened them to not be able to invest the capital necessary to take advantage of the opportunities embedded in DNA and its other platforms.”

“The second thing is that they didn't have the full suite of add-on solutions that credit unions and other financial institutions prefer to buy. We know they want to get as much well-integrated technology from their core provider as possible, and we believe we have eliminated both those problems by this acquisition.”

That included eliminating the competition at the top. Wisconsin-based Fiserv rolled out Acumen in 2009, positioning it as the upper-end alternative to DNA and another fierce competitor, the Symitar core from Jack Henry & Associates.

After years of putting together a client roster of several thousand credit unions through internal growth and acquisition of competing core processors, Fiserv touted Acumen as an all-new platform with 360-degree member-facing features and an emphasis on Web services and other integrating technologies. Now it apparently is replacing that top position with DNA.

Open Solutions had about 800 credit unions, community banks and thrifts on its core platforms. About 30 of Fiserv's credit union clients bought Acumen. Thousands more are on legacy platforms such as XP2, CUSA, DataSafe and Portico, to name a few.

Yabuki said support for those platforms will not change. “This does not represent any fundamental change,” Yabuki said of the Open Solutions purchase, comparing it with the $4.4 billion acquisition of payments provider CheckFree in 2007.

“CheckFree really brought transformational change to Fiserv in terms of providing us with market- leading payment capabilities,” the Fiserv CEO said. “Open Solutions brings a number of innovative products to bear on the market but at the same time does not bring transformational change.”

But the Fiserv CEO said he does not see Acumen and DNA ultimately co-existing in the Fiserv lineup. “Over the next 24 months we want to take some of the unique capabilities we have constructed within the Acumen environment–such as customizable workflows and member management capabilities–and export that over to DNA. We think that will make it ultimately the most innovative and existing account processing platform available.”

That should sound good to credit unions in the process of converting to DNA, such as the $2.3 billion, 133,500-member Affinity FCU in Basking Ridge, N.J.

“I think this can only be good,” said Affinity President/CEO John Fenton. “Their debt situation has been concerning us, and now that concern should be off the table. I also think this is a good acquisition for Fiserv, but they'll have to unload some of the older legacy systems or risk being spread too thin, resource wise.”

Meanwhile, Scott Hodgins, research director at Cornerstone Advisors in Scottsdale, Ariz., said he was aware of conversion problems and delays at some credit unions making the move to Acumen, although there was a mixed reaction to the sale among his company's clients.

“I have to think that they're not all going to be happy about it,” he said of the possibility of Acumen being supplanted by DNA. “But I also think a portion of Acumen signees in various stages of implementation are going to be glad they have an out now.”

He also said he expected the acquisition to have a short-term effect on how Cornerstone Advisors works with conversion projects.

Another credit union consultant had a similar view. “I know they were having some troubles with Acumen, and now it sounds like they're going forward with a new technology platform,” said Randall Pearson of Pearrari Solutions Inc., a Tucson, Ariz., consultancy.

Pearson, who noted that his consultancy focuses on lending and e-banking technologies for community financial institutions rather than core platforms, also is board chairman for the $116 million, 14,100-member Pyramid FCU in Tucson.

His credit union uses Open Solutions' CUnify platform and while he stressed that he was not speaking for Pyramid FCU but as a consultant, he did note that the Fiserv purchase might make a difference there.

The question there and elsewhere, observers said, will be whether Fiserv makes upgrades to the CUnify platform to make it more amenable to third-party add-ons or isolates it while urging clients to upgrade to its coming iterations of DNA.

“They weren't maintaining CUnify and it wasn't that current,” Pearson said of Open Solutions, “so now we'll see what Fiserv does to incent credit unions to move up to DNA and get the good stuff.”

He added, “Fiserv is very experienced at acquiring other companies but also has been criticized for not rationalizing its assets, for letting so many competing cores and lending solutions and online banking solutions out in the marketplace.”

“They've made progress on that in the recent past and this presents another opportunity to do something about it. I mean, why buy three cores when you already have so many? Which solution is going to be the winner? I think it's going to be DNA.”

He also sees the technology giant using its existing products to help make that happen, particularly in the payments arena.

“With iPay being owned by a major competitor [Jack Henry & Associates], they'll want to create interfaces and incent migration to CheckFree for bill pay and CashEdge for A2A and P2P,” Pearson said. “They may even put some of the e-banking solutions into maintenance and encourage uptake of the next generation e-banking solutions that they intend to operate for the long run.”

Fiserv also strengthened its competitive position. “This acquisition reinforces Fiserv's leadership in credit union and community bank core processing,” said Robert Hunt, senior research director, Retail Banking, at CEB TowerGroup in Boston. “I would say the price is high, especially because of all that debt they took on, and I think the key is Fiserv's ability to sell products and services into that new customer base. That's something Fiserv has done before very successfully with their acquisitions in the past.”

Fiserv did eliminate one of its competitors with the Open Solutions takeover, but another financial services technology analyst said that's not necessarily all bad.

“I think this will prove to be good news for the credit union industry,” said Christine Barry, a research director at Aite Group in Boston. Also for Fiserv, as it takes advantage of the opportunity to cross sell to credit unions payment and other products that Open Solutions lacked, Barry noted.

She added, “Open Solutions had a lot of success offering DNA as a very modern product for credit unions and banks, and a lot of them were holding off on signing with Open because of its financial position. And now Fiserv can invest in the DNA product in ways that Open Solutions could not afford to.”

As for sunsetting its current platforms, Yabuki said that was not currently in the works. “We know that each financial institution is unique and no two are created equal,” the Fiserv CEO said. “Each institution has to make decisions that make sense for them, depending on what their culture is, whether they want to run the core accounting system in-house or outsourced, or want to be on platform one, platform two or platform 12.” Yabuki saw his company's workforce grow by about 1,400 to just more than 21,000 and when asked if existing core platforms would be eliminated, including Open Solutions', and whether those former Open Solutions employees were in jeopardy of losing their jobs in the acquisition, replied flatly, “No.”

“We have a lot of respect for what Open has done with DNA and are very excited about having them in the Fiserv family,” he said.

Time will tell.

“Well, whenever these things happen, you hear the standard blather, 'nothing's going to change,' and so on,” said Pearson, the Arizona-based consultant. “Well, we'll get past that part of it and be in the reality part in a few months.”