Max harks back to the glory days of winter sports, and discusses how vendors are dealing with challenges of Olympic proportions in today's challenging markets.
I may be a child of the seventies, but I definitely identify most with the nineties, when there was so much great fodder for Valentine’s Day mix tapes or date movies in the theater. For example, 1991 and ’92 were great years musically, while 1994 was an awesome year for movies (Pulp Fiction, Forrest Gump, Speed and The Shawshank Redemption, to name a few). It was also a great year for figure skating, with heart-throbs Philippe Candeloro and Elvis Stojko, among others, all in their prime. With the winter Olympics in full swing, I’ve been reminded of their talents lately, and of how much things have changed since.
For example, this year’s winter games saw the introduction of new “slopestyle” events in the snowboarding competition—itself only included as an Olympic sport in 1998. In the data world, back in the nineties, Bloomberg was still the new kid on the block, chasing longer-established rivals Reuters, Telerate and Thomson Financial. Now, however, it’s Thomson Reuters reporting negative net sales in its Q4 2013 financial results and talking about exiting $40 million of “unprofitable revenues” as it struggles to achieve more than single-digit revenue growth. Compare this to Chicago-based data and investment research provider Morningstar, which—though not yet a threat to Thomson Reuters—managed to deliver profit increases that outstripped its revenue rises, despite being subject to the same market forces.
But it’s not just the Olympics making me think of winter sports: the current blanket of snow covering the US Eastern seaboard has me thinking of all things white (Shaun White?), such as—if it isn’t too much of a stretch—white-labeled software applications. For example, Danish foreign exchange data and trading workstation vendor NetDania, which has just upgraded its mobile app, is looking for new ways to expand the revenue base for its tools, including providing the app on a white-label basis to FX brokers seeking to offer mobile data and trading to corporate or institutional trader clients.
Similarly, FX charting and analysis provider TraderMade has just unveiled a completely web-based version of some of the data and tools available in its Maverick analysis workstation, as part of a strategy to combat waning interest in traditional deployed analytics workstations—a strategy that also includes developing a lightweight version of Maverick using HTML5 and focusing more on providing white-label solutions that brokers can offer to clients with their own branding, which in the past had been a “sideline” compared to sales of its core Java-based Maverick display, says TraderMade chief executive David Upton.
“We’ve been through a period of time when it has been very difficult to sell to our traditional institutional clients, because many of them are trying to rationalize services. I think that’s starting to turn around… but in the meantime, we’ve had to look at other ways to grow our business, because not only is there no growth—there are also significantly fewer people in the market than there were in 2008,” Upton says.
This rationalization process has implications for providers of niche add-on services. After all, if your core data and trading terminal offers analytics and commentary, why would you pay extra for another service that does the same thing? Thus, vendors need to differentiate themselves through innovation and by being hands-down better than the packages offered by those vendors, or they need to ally with those larger vendors and leverage their distribution mechanisms to reach potential clients. For example, decision support analytics provider Lucena Research last year rolled out its tools on Bloomberg’s app store of third-party add-on services to its Professional terminal, and has now been enlisted by the data giant to support custom development projects for Bloomberg clients.
And frankly, what better time for vendors to cozy up than around Valentine’s Day? Even if it doesn’t ward off the chilling effects of the economy, it may at least ward off the chill of the snowy weather.
James talks about his trip to Chicago and some of the interesting topics that came up (including a look at disaster recovery demands). Then Anthony and James touch on ISDA's initial margin rules, with Phase 3 going live next year.Subscribe to Weekly Wrap emails