Bloomberg Offers Client Data Spend Reviews
Bloomberg has begun offering consultations to client firms, to review their data usage and identify ways to reduce overall spend by eliminating duplicative products and under-utilized licenses for real-time data, industry sources say.
The account review process currently offered by the vendor comprises a free analysis of real-time exchange licenses accessed via clients' Bloomberg Professional terminals, and a series of interviews with market data managers and end-users to identify products from other vendors that may contain overlapping real-time data and functions.
"In the case of exchange feeds, we have the ability to show clients across their user bases unused subscriptions to real-time feeds," a Bloomberg official says, adding that the vendor always maintains "a balance between protecting our clients' privacy and providing them with useful information that can help them to manage their data costs."
According to a market data manager at a global bank, Bloomberg delivered a detailed report suggesting which of its real-time exchange accesses his firm could cut back on to reduce costs. Armed with that information, the executive was able to contact users to determine whether they were willing to cut back some items.
"We targeted each user with an email saying that we would remove real-time licenses that they were not using, unless they clicked on a button. Then we just collected the exceptions and followed up with a phone call," the source says.
In total, the bank managed to cut back on hundreds of exchange licenses, and needed to reinstate less than 10 percent of those following complaints from users. "With Bloomberg, when users wanted that real-time data reinstated, we could turn them back on within 10 minutes," the source adds.
Another data executive at a European asset management firm says that Bloomberg offered to perform a review of its market data usage once the vendor discovered that the firm was looking to cut its overall data budget. Bloomberg then engaged the asset manager to help identify under-utilized real-time exchange data licenses and to determine whether any other products could be cut that provide similar functions to those delivered via Bloomberg terminals.
The Bloomberg official says the vendor continuously works with IT and market data professionals to inform them of the full capabilities of Bloomberg Professional, and to develop new functionality where customers have bespoke requirements that are currently served by other products.
"They also offered to talk to users of other systems to see if they could replace those with Bloomberg terminals, but that would not have helped us save money," adds the second source. "It was very difficult to negotiate with Bloomberg on price."
The Bloomberg official concedes that the vendor does not negotiate on price, although a spokesperson for the vendor notes that Bloomberg has increased the price of its terminals by roughly half the rate of inflation each year since 1982, while continuously adding more content, functions and services.
An industry analyst says Bloomberg's account review process can be particularly helpful for firms that do not have their own usage monitoring software and cannot afford to invest in these tools in the current environment. However, the analyst warns that Bloomberg is more likely to suggest cutting services from other providers before cutting its own.
Another market data manager at a global investment bank welcomes the move, but agrees that the initiative is most likely motivated by the vendor's desire "to maintain its [own] terminals on desks."
Research Compares Bloomberg, Thomson Reuters News
A comparative study of news services from Bloomberg and Thomson Reuters shows that Bloomberg generally produces a higher volume of news items, while Thomson Reuters generally focuses more on analysis, according to research released this week by Burton-Taylor International Consulting.
Burton-Taylor gathered data for both newswires on multiple dates each month between December and March. On average, Bloomberg carried just under 32,000 news items per day, compared to just under 14,000 per day by Thomson Reuters, including news from third-party vendors that are part of each service, but not including news items "scraped" from the Internet by Bloomberg and items such as corrections or service alerts.
According to Douglas B. Taylor, managing partner at Burton-Taylor, Bloomberg delivers more third-party content than its rival, including items from other news sources, company announcements from sources like PR Newswires, and research announcements from sources such as Moody's for ratings actions. Without the third-party news sources, Bloomberg distributes roughly 11,000 items per day, while Thomson Reuters carries around 7,600 items.
In the 11,000 items per day that Bloomberg averaged, more than 6,200 tended to be alerts, or single-line headlines, rather than full stories, whereas about 3,300 of Thomson Reuters' 7,600 daily items were alerts. "This may show a difference in philosophy," Taylor says. "Although both services offer excellent speed, a higher percentage of the Bloomberg file is devoted to alerts than that of Thomson Reuters, indicating that Bloomberg may place a stronger emphasis on delivering key facts quickly and moving on, while Thomson Reuters may emphasize pulling together a complete story more quickly."
Bloomberg also appears to take a broader approach to tagging the relevance of stories, generally returning a wider scope of information in response to search terms on the Bloomberg terminal than similar searches done on 3000 Xtra, Taylor says.
The report also directly compares how the two vendors covered the same story over the same 24-hour period-examining between 15 and 20 stories that were either about a major company or were a hot topic on a sampled day-using Burton-Taylor's proprietary NewsMeter analysis, which provides an hour-by-hour breakdown of news coverage and whether items are press releases, alerts, full stories, updates, comments or analysis. Among the stories selected for the comparison were Honda's announcement regarding its earnings forecast being cut, Morgan Stanley's results and the Norway rate cut.
While the firm gathered the data and conducted the research independently of Thomson Reuters and Bloomberg, it verified the numbers with both, Taylor says.
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