The old adage of the hospitality and retail industries that “the customer is always right” was never intended to mean that customers can’t be pig-headed, ignorant, demanding, and often just plain wrong, but rather that when a customer wants something, you make it happen, no matter how pig-headed, ignorant, demanding, or wrong the customer may be. And rather than haggling over what each little demand will cost, you charge that customer a price that reflects the extra value they receive.
But in the market data world, this is becoming increasingly hard to find. In part, it’s those pesky customers. To use the hotel analogy to represent market data costs, no-one wants to stay in a full-service luxury hotel anymore; they want a budget motel with an itemized bill and a free breakfast. Meanwhile, to protect incumbent business, vendors have made it difficult to switch away from their products, by integrating them with infrastructures that are hard to unwind.
For years, firms have pursued true best-of-breed data architectures, with limited success, while projects such as Collaborative Software Initiative tried to create abstraction layers to facilitate these moves—itself failing to get sufficient buy-in.
Yet, there now appears to be greater momentum around change, and—with the maturing of the OpenMAMA open-source messaging technology—a vehicle to achieve it.
OpenMAMA was open-sourced in 2011 by NYSE Technologies based on the Middleware-Agnostic Messaging API layer built by Wombat Financial Software, which NYSE acquired in 2008. But NYSE Tech—assembled via a string of acquisitions—never achieved the ambitions of its owner (former NYSE Tech chief executive Stanley Young once laid out plans to grow it to a $1 billion business), and was ultimately spun off in pieces by new owners Intercontinental Exchange, with ICE CEO Jeffrey Sprecher saying “[The NYSE Technologies assets] are... things that my colleagues and I don’t understand, and I don’t think we should be in businesses that we don’t understand.”
Yet with broad industry support, and removed from a single owner with vested interests, OpenMAMA is now showing the promise of being able to succeed where previous efforts have failed. In this week’s issue, we detail two such efforts. First, London-based market data toolkit vendor Tick42 has built a “bridge” between OpenMAMA and Thomson Reuters’ Enterprise Platform (TREP—formerly known as RMDS), ostensibly for connecting different data sources to TREP, but also to allow developers to write applications to the OpenMAMA API rather than directly to TREP, ultimately giving them the option of removing TREP altogether and replacing it with a different vendor’s solution—providing that the new vendor also supports OpenMAMA.
And second, low-latency data technology endor SR Labs—which acquired the Wombat business and MAMA API from NYSE Technologies last year—is building a new hosted data management platform that incorporates tools for compliance and usage monitoring, but which also integrates OpenMAMA to make it easier for firms to connect applications to the platform, and to swap out parts of other vendor’s infrastructures in favor of its own platform, using OpenMAMA as a sort of abstraction layer that standardizes vendor connections.
The great thing about these initiatives is that they don’t necessarily end up displacing a specific vendor, but—like the services launched by GFI and Bolsas y Mercados Espanoles for measuring swaps clearing spreads on different clearinghouses, and for transaction cost analysis, respectively—provide customers with more choice, forcing vendors to be more competitive and responsive. If an incumbent vendor ups its game to fend off rival vendors who are now in a better position to compete, then it may well remain the incumbent, and either way, the customer is happy. In short, everybody wins.
Anthony and James look at developments pertaining to the Consolidated Audit Trail and wonder if big-tech companies could challenge traditional asset managers.Subscribe to Weekly Wrap emails
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