Opening Cross: Strength in Numbers—A History Lesson in Surviving The Data Purge


This week, our New York office has been gearing up for Purge Day, when we purge our desks of papers and items that we no longer need, and in return the company buys us a pizza lunch. In preparing for Purge Day, clearing out a closet of old copies of Waters magazines, we made some startling discoveries: copies of Waters from the 1990s, including the Spring 1995 issue, celebrating Inside Market Data’s 10-year anniversary.

The pages of ads were a who’s-who of the data and trading technology industry in 1995, but which might be alien to someone joining the industry today, as companies disappeared over the years through consolidation, failure, or moving into different business areas.

For example, here’s an abridged list of advertisers from that issue: ADP, which would exit the market data business; FirstCall and Worldscope, both ultimately acquired by Thomson Financial; TCAM Systems (complete with testimonial by—ahem—Peter Madoff of Bernard L. Madoff Investment Securities), was acquired by OM Technology before it became OMX and merged with Nasdaq; S&P Comstock sold its Comstock real-time business to Interactive Data, then S&P later returned to the real-time space with the acquisition of French low-latency infrastructure and data provider QuantHouse; Dow Jones Telerate eventually divested its once-grand-now-toxic Telerate business to Bridge, which succumbed in 2001, and was split between Reuters, SunGard and Moneyline, which itself festered and withered before being snapped up by Reuters at the start of 2005; Once news-powerhouse Knight-Ridder was also acquired by Bridge and suffered the same fate, though its name lives on outside finance through its newspapers, which were bought by The McClatchy Company in 2006. There was also an ad for Bridge itself, with the headline “Searching the Universe” (for profits?), along with a separate ad for subsidiary Market Vision.

Of the original advertisers from 1995, the big players that remain are Standard & Poor’s and Moody’s Investors Service (even Reuters was acquired by Thomson Corp.), while it would probably be fairer to say that Telekurs (now SIX Financial Information) simply changed structures under the same group of owners, ultimately becoming part of SIX Group, which also operates the Swiss Exchange and Swiss clearing and settlement utilities.

Shocking as this level of attrition is, a quick scroll through the contact list I started in 2001 reminded me of the extent to which the market data industry has consolidated. What was once a vibrant patchwork of mid-level providers throughout Europe—such as AFX News, CMS Webview, CSK Software, Ecovision, Ecowin, Gissing Software, GL Trade, Hemscott, Infotec, IS Teledata, Knowledge Technology Solutions, and MarketXS, among others, not even getting into those outside Europe—has been purged to a much smaller and more centralized range of providers.

Thankfully, there are companies—both new and established—rising to fill the void left by the shrinking competition, such as Updata, which has added energy data from Canada’s Natural Gas Exchange;, which is adding content and capabilities to its low-cost terminal to support a push aimed at institutional users; and Exegy, which is making a play for Wombat clients as SR Labs takes over that business from NYSE Technologies.

In business, strength in numbers usually means strength that protects against competition. But this industry needs competition and innovation. Unfortunately, the economic circumstances of the past few years have been more conducive to “purging” rather than fostering and investing in innovation—defunct bond pricing startup Benchmark Solutions being a case in point. But ultimately, if you want more choice, you must first choose to support those that can provide a choice. Sticking with the same-old because “no one ever got fired for buying IBM” can only lead to stagnation. And if we want innovation, not stagnation, that’s one attitude we need to purge.

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