Opening Cross: Choose Your Partners for the ‘Year of the Ecosystem’

For example, Dubai-based data vendor DirectFN has allied with Dow Jones Newswires to create an English-language news service focusing on the Middle East and North Africa region that provides in-depth coverage of company fundamental analysis and regional market and economic news. By leveraging each other’s expertise, the vendors can deliver a niche service that fills a gap in the market.

Meanwhile, analytics provider OTAS Technologies has built an app to leverage startup messaging provider Symphony Communication Services as a distribution channel, and plans to partner with more third-party platform operators that can offer it access to a wider audience.

But while OTAS is looking to exploit a growing network of partners as an additional channel to market, Symphony’s business model is predicated on partners to extend the messaging platform's use cases and force it into users’ workflows. By offering access to chat alongside a user’s data application, Symphony makes it easier for them to add an extra layer of communication to their processes. And by embedding data or analytics—such as from OTAS—within users’ chat, Symphony can turn any message chain into a data-enriched discussion.

One company that has no problem with partnering to obtain data is FactSet, which last week added municipal bond data from startup vendor Best Credit Data—co-founded by former FactSet exec Jimmy Suppelsa and Pierre Robert, former operations and product manager at Boston-based bond pricing vendor Advantage Data. FactSet recognizes that the more alternative sources of data it can supply to clients, the better its clients’ decisions will be, and the more likely they are to use FactSet’s products as a result. Another advantage of having multiple suppliers of similar datasets is that it significantly reduces the risk of one supplier being able to disrupt your business if they pull their data from your product—something that FactSet knows all too well: Around a dozen years ago, the vendor embarked on an initiative to bolster its content—especially its proprietary content—after rumors emerged that its main content provider at the time, Thomson Financial, was considering ending deals with third-party distributors.

BCD, of course, is well aware of the value that partners can bring, having already signed distribution deals with Mergent and Exchange Data International, and plans to pursue more distribution partnerships in the short term, since this is more efficient than hiring a large sales force to achieve the same level of distribution. Basically, these deals gain exposure for BCD’s data while the company establishes ithe quality of its data, and buy it time to build that sales force as the business grows.

But what will make or break a good partnership over time is not who you partner with, but how you define the partnership, what roles are assigned to each party, and ensuring that the partners fulfill them. The data industry is littered with examples of smart ideas that fell by the wayside because partners didn’t understand what they were supposed to do for one another, or weren’t incentivized to pull their weight. So if you’re considering entering a partnership—or if you value the one you’re already in—you should also consider a sturdy pre-nup agreement. Not only will it set out exactly what you expect of each other, it will also protect you should things turn sour.