Opening Cross: Have the Heavyweights Handle the Heavy Lifting

Of course, I feel pretty confident in my own abilities, when healthy. But for those of us who don’t, there’s a whole movement springing up to persuade us to offload any heavy lifting to those with more expertise, who are more likely to get the job done well. For example, anyone riding the New York subway will have seen ads for companies like TaskRabbit or Handy, whose pitch is basically “Why spend your free time hanging shelves or building closets when you can pay an expert to, while you do something else?”  

There’s a similar movement underway in the data industry, with vendors making the case why using their services is much easier than recreating that same service yourself. It’s essentially the same economies-of-scale argument that consolidated feed providers have been using for years: we do the hard work of gathering feeds from a multitude of exchanges so you only have to deal with one provider and API. And whereas some firms suffer the burden of sourcing feeds directly from exchanges for lower latency, there are still areas where it makes sense to let specialists do the heavy lifting for you.

For example, when interdealer broker Icap decided to reengineer its Fusion client-facing online data and trading platform to deliver a more “desktop-like experience” with the benefits of a browser-based solution—such as being able to roll out updates more quickly—it turned to HTML5 runtime technology provider OpenFin to deliver an HTML5-based thin-client solution. Like most firms, having built Fusion using Adobe Flex, Icap didn’t have the resources to completely rewrite the platform, says OpenFin chief executive Mazy Dar, whereas OpenFin’s solution allows Icap to continue running Flex, while OpenFin rewrites components in HTML5.

Meanwhile, on the content side, Thomson Reuters’ new intra-day power data app, which it unveiled last week as part of its Eikon desktop, combines supply and demand forecasts, regulatory announcements, weather forecasts, and market prices to create predictions of price movements. Officials say this saves user firms the time, burden and compute resources required to source that data and generate the analysis themselves.

And it isn’t just those whose primary business is trading and broking who stand to benefit from offloading non-core requirements: other vendors can also take advantage of their rivals’ expertise. For example, Interactive Data last week announced that its Continuous Evaluated Pricing for fixed income securities is now available to clients of FactSet Research Systems. Until now, adopters of the CEP pricing have mainly been marketplace operators such as MarketAxess and Liquidnet, and those using it as a source of independent pricing to underlie indexes, such as Northern Trust. This does open up an interesting possibility—if more vendors share content and create “marketplaces” for data that other vendors can easily license and redistribute, we might see a more level playing field between vendors, where consumers don’t feel tied to one supplier because of their hold over a particular content set, but base decisions on other factors, such as cost and customer service.

However, there’s a downside to offloading too much: if you don’t regularly use a muscle, it withers. And if you don’t regularly perform a data-gathering or analytical task, you may forget how it’s done, and may then find it more troublesome and expensive to perform it yourself again, leaving you at the mercy of third parties. So while offloading heavy lifting can be beneficial, be sure to keep working out as if you were still doing it yourself.