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.
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
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
May 12, 2013
The Financial Times
Bloomberg scrambles to reassure users
In Michael Bloomberg’s autobiography,
written before the Bloomberg founder became mayor of New York, he
recalled pitching the idea of adding news to his financial data
terminals to Matt Winkler, the man who ended up running Bloomberg News.
Mr Winkler replied by asking how Bloomberg would react if the newswire found out that the chairman of its biggest client had run off to Rio de Janeiro with $5m from the company coffers and and the company called up to kill the story?. Full Story
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Latest Burton-Taylor Research
April 10, 2013
Public Relations Information & Software Global
Share & Segment Sizing 2013
Burton-Taylor delivers a comprehensive, 88 page analysis of public relations information & software supplier share, demand segmentation, vendor demographics and survey results of key user expectations. The analysis is sufficiently detailed as to allow public relations information & software providers or industry analysts to clearly understand competitive positioning currently, historically, globally, regionally and within individual demand segments and to enable public relations information & software users to make better informed, more confident and more appropriate purchase decisions which could result in greater profitability.
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