The Business of Upsetting Apple Carts

Because, and let's not beat around the bush, it is. $20,000 per year for a terminal is a lot of money, regardless of the network it provides access to. It's just the gross distortion of cost versus value in the commercial world, regardless of industry, that lets people justify it. Also, of course, there isn't really any competition. Or there wasn't, until Markit announced that most of the major banks have signed up for its federated chat service.

It's something that's been bounded around the newsroom for a while, mostly from Inside Market Data's desks, but a few more details have been made official today. It will have an open directory, use video and chat rooms as well as traditional instant messaging, and be able to transmit documents across platforms. Also, if anyone had any doubts that Markit was squaring up to Bloomberg, the partnership with Thomson Reuters puts those very firmly in the ground.

Signs and Portents
I mean, it's all competition, right? Someone makes a good product, that product corners the market, derivative (in the pejorative sense) products nip at its heels until someone improves on the formula and makes something better. Repeat ad nauseam, and boom, capitalism. Or ‘innovation', at least. Bloomberg, also, took a bit of a pounding this year from Goldman Sachs's merciless pursuit of them after it turned out their reporters had been looking at things they shouldn't have, leading them to break their own rule (again) about commenting on themselves in a very public mea culpa. Trust, though, as the adage goes, takes a lifetime to build and moments to break.

It's not surprising, then, that Markit has come out with this. But it did take someone with Markit's emergent scale, resources, connections and technology to be able to effectively counter a giant like Bloomberg. If Goldman is, as popular myth goes, the vampire squid of the financial industry, then surely Bloomberg is the same for the financial information industry. It's in every shop, every floor, every desk and every installation, in all financial centers. Instant Bloomberg is undoubtedly the dominant chat platform. Whether Markit is able to make inroads, or remain a peripheral tool, remains to be seen. But it's in the spirit of the system to shake things up now and again.

There are factors for success, such as technical capabilities, network reach, user proliferation and, of course, cost. But there are others at play, as well. As much as people like to complain about tools and technologies they use, familiarity is a powerful pull. Yes, it also breeds contempt, but moving people away from something they've been used to for a long time is a remarkably difficult exercise.

It did take someone with Markit's emergent scale, resources, connections and technology to be able to effectively counter a giant like Bloomberg.

An example: At a magazine I worked in a freelance capacity for, before Waters, we changed the entire back end of the website to a different platform. I forget the specifics, but I think it was a proprietary system to a highly modified form of WordPress. Myself and the section editors thought it was superb─the functionality was richer, it was faster, it may have required a little more fiddling around, but we immediately noticed an uptick in traffic after we shifted onto it. The reporters, though, particularly the older hands, were in a state of near-open mutiny for months after. Despite how much they'd complained about the achingly slow, antediluvian content management system before, they were used to it. They knew what would cause it to freeze, to work, when it was likely to be quick and when it would be slow. It was familiar. They didn't want the hassle of learning an entirely new system, and some weren't too capable of it, either. *

That may be a challenge Markit faces, despite its efforts at cross-platform integration. People are used to Bloomberg, and users themselves may not really care how much it costs, as long as it works.

*Incidentally, three years later, I heard that a similar outcry occurred in that same newsroom, when they shifted from the new platform to an even newer one. Take from that what you will, but reporters are clearly fickle creatures.