February 16, 200909
Inside Market Data - Special Report
Data Industry Seeks Third Player for New ‘Big Three’
FactSet Research
Systems,
Interactive Data
Corporation and
SIX Telekurs
saw the fastest growth among major data providers in 2008 as the
market seeks a third competitor to break up the duopoly of
Thomson Reuters
and
Bloomberg,
which both saw slight growth in market share, according to new
research from Burton-Taylor International
Consulting LLC.
The merged Thomson Reuters now holds 34 percent
of the global market for financial information
and other services provided by data vendors,
including trading room platforms and trading
systems, against Bloomberg’s 24 percent. These
figures compare to 23 percent for Reuters, 22
percent for Bloomberg and 9 percent for Thomson
Financial in 2007.
Douglas B Taylor, managing partner at
Burton-Taylor, says that the slight growth in
market share at the big vendors was due in part
to stagnation in other parts of the market, as
well as the difficulty among the smallest
competitors in withstanding the tough economic
climate.
However, Taylor says market participants are
looking for a third competitor to challenge the
pricing power of the top two, similar to the
period following the demise of Bridge and before
Thomson stepped into the void. Interactive Data,
FactSet and Telekurs experienced strong growth
in 2008, and now hold global market shares of
3.3 percent, 2.5 percent and 1.2 percent,
respectively. In 2007, market share was 2.6
percent for Interactive Data and 1.5 percent for
FactSet, while Telekurs’ share was not separated
out from other smaller vendors in last year’s
report.
While FactSet has maintained its focus on
analytics and customer support, Interactive Data
has been competing heavily on price to steadily
build a global organization, and Telekurs has
taken a methodical approach in choosing markets
carefully and selling into that market at its
own pace before moving on, Taylor says.
To be a legitimate third competitor, a provider
would have to provide quality data and customer
support, and be able to offer these globally, as
well as demonstrate a commitment to be a
competitor, which could include investments in
infrastructure or new product lines, Taylor
says. FactSet, Interactive Data and Telekurs
have all exhibited those attributes, which have
contributed to their growth, he adds.
Prior to the Thomson Reuters merger, Reuters and
Bloomberg competed closely in revenue, with
Thomson in third place, bringing in slightly
less than half the revenue of the top provider,
which created a “healthy triumvirate.” Now,
assuming revenues of around $7 billion to $8
billion for Thomson Reuters, and around $6
billion for Bloomberg, Taylor says he would like
to see a third player with revenues in the $1.5
billion to $2 billion range to establish a
viable alternative.
The race for third place is still fragmented,
with no other providers having reached the $1
billion revenue mark. Interactive Data is
currently closest, at around $750 million,
followed closely by FactSet at about $575
million and Telekurs at about $270 million. The
vendor emerging for that third slot must clearly
rise above other competitors to reach a “tipping
point,” where enough customers perceive it as
the clear third choice, Taylor says.
Forward-Looking Statement
Looking forward, Taylor says Bloomberg may find
it harder to identify new sources of revenue,
if—particularly in challenging economic
times—clients decide that they do not need
everything included in Bloomberg terminals and
opt instead for products that provide limited
data at a lower cost. And though Bloomberg is
increasing its focus on datafeeds as a potential
source of revenue, balancing a datafeed business
with its terminal business is a commercial
framework that is still new to the vendor, he
says.
In contrast, Thomson Reuters may be better
placed to weather the economic challenges
because of its diverse product lineup, including
terminals, datafeeds and transactional products,
which also have varying price points, says
Taylor. He sees the vendor’s focus on
low-latency feeds and machine-readable news as
key growth areas, but says
Dow Jones
will be a significant competitor in the machine-readable news space.
by Vicki Chan
Latest Burton-Taylor News
December 10, 2011
The Economist
Thomson Reuters - Screen Test
The information company, in danger of losing its top spot, gets a new boss
IN SEVEN years as head of Reuters, Tom Glocer brought the British-based news agency from the verge of bankruptcy to a state of rude health. But he has done less well as chief executive of Thomson Reuters, the company created when Thomson, a Canadian purveyor of professional information for lawyers, accountants and others, bought Reuters in 2008. Full Story
This story, as well as all Burton-Taylor news may be accessed through the Press Room link below.
Latest
Burton-Taylor Research
November 10, 2011
China Financial Market Data/Analysis Market Share 2012 - Key Competitors
Combined
data from Burton-Taylor and Robert Agnew of Marlin & Associates
estimates China domestic vendors increasing relative share
Burton-Taylor International Consulting LLC, a leading information and news industry market research, strategy and business consulting organization, today published a report estimating mainland China financial market data/analysis spend will reach USD745.4 million by the end of 2011.
This report, as well as all Burton-Taylor free or for purchase research, may be requested through the All Research link below.
