I too am a long term investor and I’m not trying to defend the...

I too am a long term investor and I’m not trying to defend the company but I believe ITE was established principally to service the need resulting from the requirement for financial institutions to move to a Basel II regulatory environment. As for the delays, yes we’ve heard it all before but if you consider the context of the regulatory framework that they have had to contend with, it is not really a product of IT&E’s now RZR’s inactivity. The American financial industry was not forced into adopting the Basel II standards, hence the delay. Basel II didn’t come into effect in most countries till last year and it was only in April this year that the G20 fully endorsed Basel II and committed to implement it. The Basel Committee is still to finalise details as they felt too stringent a capital requirement during the fallout from the GFC would hinder recovery and it is not until 2010 that a review of regulatory capital levels will be implemented. The lack of enforcement of the Basel II standards seems to me to be the primary cause for the slow implementation of new risk management systems and hence the slow buildup of RZR’s customer base and sales, the reluctant customers may have to be dragged kicking and screaming into updating their legacy systems but ultimately in the wake of the GFC and the implementation of Basel II they will have to comply.
Personally I’m going to give them another few years, I figure if they can’t get their product out into this post GFC market over the next couple of years and be making a substantial profit and locking in a long term recurrent income stream it’s never going to happen. I know it’s a competitive industry (what isn’t) but RZR has beaten the likes of Fitch’s Algorithmics in their own back yard with the Royal Bank of Canada project. And as for winning the Central Counter Party exchange sites they would almost have to be considered some sort of benchmark, reference system to the exchange participants surely? The rise of the centrally cleared exchanges is a very interesting niche market development and some reports indicate an exponential growth rate of 10,000 times the current level of transactions due to the standardization and the substantially lower cost of trading electronically, apparently very little of the US CDS market currently trades electronically. But what this translates into as far as likely income is beyond me. Maybe they didn’t mention fat pipeline but I think they did say they were increasing staff to meet an increase in demand.
As I’ve stated before I don’t work in this industry and don’t pretend to know the fine details involved but the simple fact that I saw, and this is why I invested in the company is that you have a market place with very large very profitable potential customers who are being legislated into conforming to some sort of enhanced next generation Risk Management regulatory framework ie Basel II, end of story.

cheers