Fiserv Inc.’s buyout of Open Solutions Inc. is good for credit unions. Or it’s very bad.

Reaction varied to the news that the Wisconsin-based financial services technology giant had scooped up its debt-ridden former rival.

“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. 

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Barry noted that credit unions often depend on their core processor for their other services – such as bill pay and online banking – and  said Fiserv can profit from cross selling while offering users of Open Solutions’ CUnify and DNA platforms solutions they previously had to get elsewhere.

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

Kirk Drake, president/CEO of Maryland-based business continuity CUSO Ongoing Operations LLC, had a different take on the purchase announced this week.

“I think the acquisition of OSI by Fiserv is terrible for credit unions,” he said Wednesday “Anytime choice is eliminated or one company controls that much market share, innovation and product advancement suffers.  

“Fiserv’s entire goal is to maximize profits – that goal is completely counter to a credit union’s mission and purpose. This conflict creates never ending lousy customer experience, poor service and poor focus on helping customers achieve their goals.”  

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

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

“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,” he said.

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

Scott Cowan, vice president of sales and marketing for document management specialist Millennial Vision Inc. in Salt Lake City, said he wasn’t surprised that Fiserv ended up owning Open Solutions.

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

“OSI’s Oracle-based platform lets Fiserv add a different dimension to their core DP offerings in both the credit union and banking space,” he added. “We wish their customers and employees well in their transition as we have many friends and joint customers on both sides of the house.”

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

Time will tell, said one industry consultant.

“Fiserv is very experienced at acquiring other companies but also has been criticized for not rationalizing assets, for putting so many competing cores and lending solutions and online banking solutions out in the market,” said Randall Pearson of Pearrari Solutions in Tucson, Ariz.

“They’ve been making progress on this and this presents an opportunity to do something about it. Why buy three cores? We’ll just have to see which solutions come out the winners. I think it will be  DNA,” Pearson said.

He added, “Well, whenever these things happen, you hear the standard 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 a few months.”