Brokat

Brokat was a German technology company that developed software and professional services for electronic banking, e-business, secure communications, and mobile commerce. Established in 1994 as Brokat Informationssysteme GmbH, it began in Böblingen near Stuttgart and later moved its central offices to Stuttgart-Vaihingen. The company was founded by Stefan Roever, Boris Anderer, Achim Schlumpberger, Michael Schumacher, and Michael Janßen, whose combined backgrounds covered law, business administration, physics, computer science, and economics. Brokat’s early market focus was financial institutions seeking to connect legacy banking systems with emerging digital channels. Its technology portfolio included encryption tools, middleware, rules and personalization systems, electronic-finance applications, and mobile-payment software. The company’s best-known platform was Twister, a modular application and integration framework designed to connect Internet and mobile interfaces with back-end databases, mainframe systems, and other enterprise applications. Twister used a proprietary object and routing model that allowed business components written in languages such as Java, C++, and Tcl to communicate within a common architecture. It was marketed particularly to banks and other organizations requiring high transaction volumes and integration with established information systems. Another important technology was XPresso, an applet-based encryption and secure-request toolkit. Brokat promoted it as a way to provide strong encryption for online transactions, at a time when export controls and restrictions affecting cryptographic software were significant commercial and technical concerns. The company also worked on mobile digital signatures and other mechanisms for conducting authenticated business transactions through mobile devices. Brokat became one of the highly visible German New Economy companies of the late 1990s. It went public on the Neuer Markt in 1998, expanded into the United States through acquisitions, and developed a presence in both Stuttgart and San Jose. In 1999 it acquired Atlanta-based Transaction Software Technologies. During 2000 it expanded further through the acquisitions of GemStone Systems, Blaze Software, and Automated Financial Systems. The company reported a large international customer base that included banks, insurers, payment organizations, industrial companies, and technology firms, and it operated across numerous countries with more than 1,400 employees at its peak. The rapid expansion was financed partly through outside investment and debt. Intel invested in Brokat, Siemens also became an investor, and the company issued a high-yield bond in 2000. Its market valuation rose dramatically during the technology-stock boom. However, the collapse of the dot-com and New Economy market exposed the company’s financial vulnerability. Brokat was unable to reach an acceptable restructuring agreement with creditors connected to its high-yield debt and declared insolvency in November 2001. The business was subsequently divided. Data Design AG acquired Brokat’s professional-services activities and remaining operations in 2001. The electronic-payment engineering business was acquired by eOne Global, a First Data company, and continued under the name Encorus Technology. Encorus concentrated on mobile-payment software and related professional services and was later acquired by Qpass in 2005. Brokat therefore ceased to exist as an independent operating brand, although elements of its engineering work continued through successor businesses.

Brokat was founded on October 21, 1994, as Brokat Informationssysteme GmbH with registered share capital of 158,300 Deutsche Marks. The founding group consisted of Stefan Roever, Boris Anderer, Achim Schlumpberger, Michael Schumacher, and Michael Janßen. The company initially operated from Böblingen near Stuttgart and moved its central offices to Stuttgart-Vaihingen in January 1998. Its business developed around the digitization of banking and financial services. Brokat supplied software that connected customer-facing electronic channels with banks’ existing infrastructure, including mainframes and databases. The company’s products combined integration middleware, secure communications, application components, electronic-finance functions, and consulting or implementation work. This model made Brokat particularly relevant to banks that wanted to launch Internet services without replacing their core systems. Twister became the company’s central technology platform. It was a proprietary middleware environment based on a C++ CORBA Object Request Broker. Gateways received requests and routed them to repository-defined objects, or RDOs, which represented reusable business functions. Accessors connected those functions to back-end systems. RDOs could be implemented in Tcl, Java, or C++ and could interoperate across languages. Later versions also supported the Enterprise JavaBeans object model. The platform was designed for high transaction volumes and was used in demanding applications such as online securities trading. Brokat also developed XPresso, an encryption toolkit based on Java applets and the company’s Secure Request Technology protocol. The system was intended to support strong encryption for online transactions. The company obtained patents connected with encryption, random-number generation, and its cross-language RDO programming model. In its later years, Brokat shifted greater attention toward mobile commerce, including mobile-payment systems and XML-based mobile digital signatures for signing and encoding business transactions. The company’s most prominent growth phase occurred between 1996 and 2000. Brokat became a highly valued participant in Germany’s New Economy market and went public on the Neuer Markt in 1998. It also became associated with Nasdaq trading. Following the listing, Roever served as chief executive alongside Anderer as co-CEO, while Janßen served as chief financial officer and Schlumpberger as chief technology officer. Anderer and Schlumpberger left their executive positions in 1999; Anderer continued as chairman with responsibility for United States expansion, and Schlumpberger became chief architect. Both ultimately left the company at the end of 2000. Brokat pursued aggressive internationalization. In 1999 it acquired Transaction Software Technologies in Atlanta and received investment from Intel. In 2000 it acquired GemStone Systems, Blaze Software, and Automated Financial Systems. At its high point, the company maintained dual centers in Stuttgart and San Jose, employed more than 1,400 people in 17 countries, and reported that its technologies were used by more than 3,500 enterprises worldwide. Customers and partners named in accounts of the company included major banks, insurers, payment organizations, automobile companies, telecommunications firms, and technology suppliers. Expansion was supported by equity-market access, strategic investment, and debt. Siemens invested in Brokat, and a high-yield bond of €125 million was issued in 2000 under the lead of WestLB. Brokat’s market capitalization exceeded $5 billion near the end of 1999 according to contemporary descriptions, reflecting the extreme valuations of the period rather than a stable long-term financial base. The collapse of the dot-com bubble and the wider reversal in technology stocks undermined Brokat’s expansion strategy. The company could not secure a restructuring agreement with creditors connected to its high-yield bond and declared insolvency in November 2001. Its assets and activities were subsequently separated. Data Design AG acquired the professional-services department and the rest of the operating business. eOne Global, a First Data company, acquired the electronic-payment engineering core, which continued as Encorus Technology. Encorus focused on mobile-payment software and professional services before being acquired by Qpass in 2005. Data Design was later acquired by the Hungarian company Interactive Net Design, or IND, in 2003. Brokat consequently became a defunct brand, although its technologies and personnel continued indirectly through successor organizations.

• 2005

  Encorus is acquired by Qpass

  [1]Brokaten.wikipedia.org

  Qpass acquires the successor mobile-payment business that had continued from Brokat’s electronic-payment engineering activities.

• 2001

  Insolvency and asset transfers

  [1]Brokaten.wikipedia.org

  Brokat declares insolvency in November after restructuring talks with bond creditors fail; its activities are subsequently sold to Data Design and eOne Global.

• 2000

  Brokat broadens its software portfolio

  [1]Brokaten.wikipedia.org

  The company acquires GemStone Systems, Blaze Software, and Automated Financial Systems and raises additional capital through Siemens investment and a high-yield bond.

• 1999

  United States expansion begins

  [1]Brokaten.wikipedia.org

  Brokat acquires Transaction Software Technologies in Atlanta and receives investment from Intel.

• 1998

  Move to Stuttgart-Vaihingen and public listing

  [1]Brokaten.wikipedia.org

  Brokat relocates its central offices and becomes a publicly traded company on Germany’s Neuer Markt.

• 1994

  Brokat Informationssysteme GmbH is founded

  [1]Brokaten.wikipedia.org

  The company is established on October 21 in Germany with five founders and initial registered share capital of 158,300 Deutsche Marks.

Brokat positioned itself as a specialist provider of secure, high-volume digital transaction infrastructure for banks, insurers, payment companies, and other large enterprises. Its proposition combined integration middleware, secure communications, channel connectivity, and implementation services, with an emphasis on linking Internet and mobile interfaces to established back-end systems.

• Enterprise middleware and application integration

  Twister

  Twister was Brokat’s principal software platform and the foundation for many customer implementations. It provided middleware for routing requests between electronic-service gateways, reusable business objects, and enterprise back ends such as mainframes and databases. Its repository-defined object model supported components written in Tcl, Java, and C++, allowing them to interoperate across languages. Twister was marketed to financial institutions and was designed to handle high transaction loads, including online brokerage traffic.

• Encryption and secure-transaction technology

  XPresso

  XPresso was Brokat’s Java-applet-based encryption toolkit for secure electronic transactions. Its associated Secure Request Technology protocol used strong symmetric encryption and was intended to protect communications between digital channels and enterprise applications. The product reflected Brokat’s focus on secure Internet banking and its effort to address the technical and regulatory constraints surrounding cryptography in the 1990s.

• Mobile commerce and authentication

  Mobile Digital Signature

  Mobile Digital Signature was an XML-based technology for encoding and signing business contracts and other transactions on mobile devices. It formed part of Brokat’s later shift toward mobile commerce and mobile payments, extending the company’s secure-transaction expertise beyond desktop Internet banking.

• Electronic banking and financial applications

  Brokat e-finance applications

  Brokat developed customized electronic-finance applications for banks, insurers, brokers, and emerging financial-services companies. These implementations used the company’s middleware and security components to expose banking, trading, payment, and account functions through Internet and mobile channels.

• 2001

  Declare insolvencyOther

  Background

  The collapse of the dot-com market weakened Brokat while creditors sought repayment or restructuring of high-yield debt.

  Action taken

  Brokat declared insolvency in November after failing to negotiate a restructuring agreement with bond creditors.

  Aftermath

  Its professional-services and remaining operations went to Data Design, while the electronic-payment engineering business continued under eOne Global as Encorus Technology.

  Source

• 2000

  Expand through GemStone, Blaze, and Automated Financial SystemsM&A

  Background

  Brokat used acquisitions to broaden its technology portfolio and deepen its United States market position.

  Action taken

  It acquired GemStone Systems, Blaze Software, and Automated Financial Systems.

  Aftermath

  The acquisitions increased the scale and complexity of the company shortly before the technology-market downturn.

  Source

• 2000

  Finance continued international expansion with debtStrategy

  Background

  Brokat was pursuing rapid growth in enterprise software, electronic finance, and mobile commerce.

  Action taken

  The company issued a €125 million high-yield bond led by WestLB, alongside strategic investment from Siemens.

  Aftermath

  Debt obligations later became central to failed restructuring negotiations and the company’s 2001 insolvency.

  High-yield bond. €125 million issued (2000)

  Source

• 1999

  Acquire Transaction Software TechnologiesM&A

  Background

  Brokat sought to establish a stronger presence in the United States and expand its enterprise-transaction software capabilities.

  Action taken

  The company acquired Atlanta-based Transaction Software Technologies.

  Aftermath

  The transaction formed part of Brokat’s broader international expansion before its later insolvency.

  Source

1. 1Brokaten.wikipedia.org