Did Bloomberg Blink?
This week Bloomberg News announced that Bloomberg LP had unrolled a new product, Enterprise IB, that for the first time appears to unbundle a key messaging feature from the all-in-one Bloomberg terminal. Did Bloomberg blink?
Bloomberg is reacting to moves by Symphony, a messaging service adopted by several dealing banks intended to challenge the dominance of Bloomberg instant messaging within the Bloomberg terminal. Symphony’s crypto feature is touted as an advantage that allows banks to limit their exposure to information slippage. Bloomberg News had faced a scandal in 2013 when revelations emerged that Bloomberg had been mining bank customer messaging for news stories. The challenge from Symphony suggests this may have been a reputational scandal from which it has not fully recovered. Banks still seek solutions outside of Bloomberg.
How big a deal is this concession by Bloomberg? Has the firm blinked and unbundled the terminal at last? If so, one commentator says they are valuing all the other services too highly: “They’re betting the whole system without chat is worth $21,900 a year. Is it? Maybe for some old bond traders, but for everyone else, I don’t think so.”
Another reading of the facts suggests the Enterprise IB announcement is not quite so momentous, though still a big deal. In order to provide access to Enterprise IB for additional users, a firm must already pay for at least one terminal. So the amortization of messaging costs is not so extreme as suggested above. Moreover, Enterprise IB is expected to advance penetration within firms that were highly unlikely to purchase additional terminals (smaller firms especially) at that price point. So the feature really is a blocker: designed to stymie further adoption of Symphony at back offices and smaller firms while avoiding cannibalization. If the roll-out goes as planned, Bloomberg may end up experiencing further intensity of usage at its existing terminals, but not much opportunity cost. In some ways, the move is just a nod to reality in the same way that Bloomberg’s spreadsheet download features also acknowledged the need to interact with functionality in the outside universe.
On the other hand, this concession would never have occurred in the old world where messaging technology had not evolved so quickly, and where financial institutions were not so open to cultural innovation. Fintech is moving around legacy infrastructure like water, and the old players are forced to react. More features are rolling out to more distributed platforms (like DealVector) that can provide an interactivity among players that is by its nature less “closed” than the Bloomberg terminal. Bloomberg may not have blinked, but the giant is sleeping with one eye open.
