Fiserv Inc.'s buyout of Open Solutions Inc. is good for creditunions. Or it's very bad.

Reaction varied to the news that the Wisconsin-based financialservices technology giant had scooped up its debt-ridden formerrival.

“I think this will prove to be good news for the credit unionindustry,” said Christine Barry, a research director at Aite Groupin Boston.

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Barry noted that credit unions often depend on their coreprocessor for their other services – such as bill pay and onlinebanking – and said Fiserv can profit from cross selling whileoffering users of Open Solutions' CUnify and DNA platformssolutions they previously had to get elsewhere.

“Now Fiserv can invest in the DNA product in ways that OpenSolutions could not afford to,” Barry said.

Kirk Drake, president/CEO of Maryland-based business continuityCUSO Ongoing Operations LLC, had a different take on the purchaseannounced this week.

“I think the acquisition of OSI by Fiserv is terrible for creditunions,” he said Wednesday “Anytime choice is eliminated or onecompany controls that much market share, innovation and productadvancement suffers.

“Fiserv's entire goal is to maximize profits – that goal iscompletely counter to a credit union's mission and purpose. Thisconflict creates never ending lousy customer experience, poorservice and poor focus on helping customers achieve their goals.”

Drake added, “Credit unions need to fight to have choice andinnovation in their technology or they will become commoditizedlike the rest of the banking industry.”

Robert Hunt, senior research director at CEB TowerGroup inBoston, noted the strengthening of Fiserv's competitive positionand said the price tag – $55 million in cash and $960 million inassumed debt – caught his eye.

“I would say the price is high, especially because of all thatdebt they took on, and I think the key is Fiserv's ability to sellproducts and services into that new customer base. That's somethingFiserv has done before very successfully with their acquisitions inthe past,” he said.

To be seen is how Connecticut-based Open Solutions' 1,400 or soemployees and its 300 or so credit union core processing clientswill fare under their new owners.

Scott Cowan, vice president of sales and marketing for documentmanagement specialist Millennial Vision Inc. in Salt Lake City,said he wasn't surprised that Fiserv ended up owning OpenSolutions.

“With the reduction in the small credit union market space andthe continued growth of the larger credit unions I think Fiservwould have been the logical choice as an acquisition partner,”Cowan said.

“OSI's Oracle-based platform lets Fiserv add a differentdimension to their core DP offerings in both the credit union andbanking space,” he added. “We wish their customers and employeeswell in their transition as we have many friends and jointcustomers on both sides of the house.”

Fiserv President/CEO Jeff Yabuki said he doesn't expect DNA andFiserv's flagship Acumen platform to co-exist and indicated thesurvivor would be DNA. He also said that the company's list of morethan a dozen core platforms for community financial institutionswould not necessarily shrink.

Time will tell, said one industry consultant.

“Fiserv is very experienced at acquiring other companies butalso has been criticized for not rationalizing assets, for puttingso many competing cores and lending solutions and online bankingsolutions out in the market,” said Randall Pearson of PearrariSolutions in Tucson, Ariz.

“They've been making progress on this and this presents anopportunity to do something about it. Why buy three cores? We'lljust have to see which solutions come out the winners. I think itwill be DNA,” Pearson said.

He added, “Well, whenever these things happen, you hear thestandard blather, 'nothing's going to change,' and so on. Well,we'll get past that part of it and be in in the reality part in afew months.”