Feed - Desktop Cannibalization?

The biggest development in the last 10 years in information services management is the Rise of the Feeds.

People will argue it's AI or NLP, but I don't think so. Not yet.

Those technologies have the potential over the next 5-10 years to transform business information workflows. I don't discount that. I see numerous opportunities to improve business productivity with AI. Everyone does.

Feeds, on the other hand, and are here and now.

Almost any structured content can be delivered in a feed format. Market data, securities prices, entity identifiers, reference data, filings, news, ownership data, you name it. If it's structured it can be delivered via feed.

For decades, the prevailing delivery channel for the vast majority of third-party content was web-application or terminal. The market was pioneered by Quotron, Telerate and ILX, all now gone the way of the Ticker Tape, thanks to Bloomberg, which dominated the market through most of the 90s and 2000s. The iconic Bloomberg Terminal remains a powerhouse to this day. It's joined by Thomson Reuters Eikon, and to a lesser extent Moody's, FactSet, and S&P Global.

But the terminal, while still a mainstay in front office trading operations, has shown its age as a delivery channel. The financial crisis of 2008-09 gutted desktops: employee - and terminal - counts on the Street never fully recovered. Instead, vendors and buyers are investing heavily in structured data feeds. With feeds, structured data is delivered to the client via Web service API, or even an FTP. The data live in internal applications, designed to spec by the buyer.

Competing chat services like Symphony are also a major threat to Bloomberg terminals. Don't underestimate how much of the Bloomberg terminal value proposition lies in chat.

No terminal required? Perhaps.

Data providers such as Bloomberg have massive terminal installed bases. They fear cannibalization of their terminal business by the rise of feeds, more than they do upstart competitors like Money.net.

They price their feeds accordingly. Bloomberg in particular have built a billion dollar feeds business in just 15 years - while keeping terminals roughly flat over the last 5 years.  I believe it's possible to extract greater ROI from your feeds than from terminals. But it takes careful planning. Vendors take a keen interest in the use-cases for your feeds. They want to know who is using the data, and how. These questions weren't as pressing with terminals. The use-case wasn't particularly important. You were sold a terminal and off you go.

Vendor's don't want to lose money if a customer switches from terminals to feeds. If a vendor is making X from terminals they will want to make X - and more - from feeds. They will fight tooth and nail to maintain topline numbers. I don't blame them.

But with feeds, you have more control over your ROI. You can do more with a robust, thoughtful and well-managed feeds program. You can, in theory, extract more value from your feeds than terminals. Terminals take a lot of work to get marginal value upside. You can only customize the experience to your use-case so much. Feed-driven applications you build internally offer almost infinite development flexibility and customization. At a price. Properly managed, the ROI potential is much higher than with a desktop.

I think there's always going to terminals in the front office. But feeds, and, increasingly, hosted cloud apps, are the present and the future, particularly for analytics.

But are feeds as much the future as they are the present? Will the cloud, combined with AI, actually reduce feed delivery, moving workflows onto a vendor-hosted stack?  Will the cloud do to enterprise feeds what enterprise feeds are doing to terminals? That's a topic for another post.

- Kevan Huston