|
Special Reports
Loan Origination Systems
Brokers Pick Sides in Ellie/Calyx War
By Anthony Garritano
SAN JOSE, CA -- Even though the trial between Calyx Software here and Dublin,
Calif.-based Ellie Mae isn't scheduled to kick off until November of 2005, both companies continue to battle it
out, this time in the streets over market share.
To this end, Ellie Mae has released news that Acceptance Capital Mortgage Corp.,
Spokane, Wash., has made the switch from Point to Encompass. "I was looking for a centralized data base tool
to gather, retain and file all the data as it's obtained from the field," said Craig Wilkins, president of
Acceptance. "We have 74 offices throughout 25 states and the hardest thing with Point was that it didn't have
an easy setup and centralized database. This will allow me to complete more frontal management duties more efficiently.
The fact that Point plans to release a centralized data base tool of its own has
not forced Mr. Wilkins to rethink his decision at all. "From my standpoint, I was amazed that Point had the
market share it did with basically a forms tool," he noted. "When I saw some of the technology under
Encompass I was forced to decide to go with either the old company trying to upgrade to something new or to run
with the new product that has the pieces in place built on a more advanced platform. That's why I went with Encompass
because they're already there. The contact management system with Encompass was also an advantage.
He continued, "Because this was built into Encompass, I was only entering
this data once without having to buy another solution to handle my contacts and rekeying everything there. I'm
also all SQL server-based. Now that Encompass launched version 1.5 we were able to build a secure socket using
my SQL server. So all my data is on the same level now, which wasn't the case with Point."
Also, Allied Home Mortgage Capital Corp., the largest mortgage brokerage company
in the country headquartered in Houston, is contemplating a switch from Point to Encompass. "We had a serious
look at Encompass and went to Calyx and offered them some of our technology to license from us because we have
a significant investment with Calyx," said Ron Litt, executive vice president of Allied. "So, we've been
dancing back and forth between the two for a couple of months now. We want to make sure that Encompass is a full
solution before we make a decision and we're still not sure if we want to go that way or not. We picked a sizeable
branch to test it and see how it performs under pressure."
The test is slated for this month and will run for 30 days. By the end of this
year Allied predicted that it would be prepared to make a decision. Regardless, Allied has no intention of converting
to Ellie Mae's ePass.
Ellie Mae sees these two developments as big pluses in its struggle to steal Point's
market share. "These users had just hit a wall with how far Point could take them," pointed out Jonathan
Corr, senior vice president of products at Ellie Mae. "These deals are very significant because these users
see that Encompass meets the needs of everyone in the industry beyond just the processor. Encompass has surpassed
our expectations. We have over 4,000 companies using Encompass that we've taken from Calyx."
In total, Ellie Mae claims to have taken 15% of Calyx's market. However, of the
4,000 companies using Encompass, Mr. Corr was unable to identify how many of those companies are paying for and
using the solution and how many just got the free sample that Ellie Mae sent out earlier in the year and just decided
to throw it in the trash.
Also, if Encompass is performing so well the question remains why isn't Ellie
Mae dropping support for Genesis and Contour, two rival LOS solutions also owned by Ellie Mae. "We're not
outselling Genesis and Contour," Mr. Corr responded. "We are however supporting both products and have
no plan to stop supporting those solutions. We'll focus on customers we don't have by targeting Calyx instead of
looking to migrate our existing customers. Migration technology will be coming starting with version 2.0."
On the other side of the coin, Calyx claims to have made significant inroads in
taking back any customers that switched to Encompass as well as adding new customers from Genesis and Byte. According
to sales figures provided by Calyx, the company has sold over 650 new licenses of Point each month this year.
"It's not our style to talk about when we convert a customer from another
product to ours, but given the tactics used by Ellie Mae we will have to now so there isn't the false perception
that we're losing market share because we're not," said Dennis Boggs, senior vice president of business development
for Calyx.
"First off, when you're as big as Allied you're going to be approached by
every vendor in the book. By nature of the fact that they're so big, this is just business as usual for them. We
were just sitting with them to make sure that they're happy with us and I won't think much about that unless they
decide to switch, which I don't think they'll do because we're working very hard for them."
In addition, companies like Sterling Home Mortgage, Phoenix, which has 100 users,
have sampled Encompass and made the decision to come back to Point. "We found Encompass to have several bugs
like printing problems, forms locking up, having to open several different programs simultaneously just to get
a print preview and a ton of other problems," said Chris Brown, president of Sterling. "I was really
happy with Point but Encompass was claiming to be the latest and greatest so I thought I'd give it a try and wait
for it to get better but it never did. I just switched back to Point two weeks ago."
Smaller firms like Hansel Mortgage Group Inc., Centerville, Ind., which has just
two users, has made the same decision. "Encompass laid out their program and it sounded good on the telephone,"
said Lewis Hansel, managing partner of HMG. "I've used the software for almost a year and I don't mind it
but I have to backtrack at every step to ensure it gets done.
"For example, in Point I can just click in the previous employment section
and fill in the information on the 1003 that I'm looking at, but with Encompass in order to get previous employment
in at all I have to go back and do a full-blown verification of employment in order for it to show up on the 1003,"
he said. "So, I went back to Point because of the ease of use. I'm a small company so ease of use is really
important for me."
|
