My company effectively (yet loosely) competes with BBG in a small insignificant corner of the fixed income universe (asset backed securities).
My observations:
1- BBG is now part of a banks (and most large trading firms) infrastructure. BBG vCons are the standard way to confirm trades, its chat is one of three tools approved by banks, it has all the APIs to monitor every piece of communication, etc
2- BBG has proprietary data sets no one can get or on terms no one else will ever receive (Eg CUSIP).
3- I think that if the CUSIP license were more open and affordable, we would see many more competitive products. Instead S&P effectively has a monopoly. CUSIPS are the foundation of any alternative. The reality is you need many millions to get that feed and must charge hundreds to each customer. Few can do that
4- I think the idea of BBG as a social network is way over valued. It’s convenient yes but if you have inventory other people want in fixed income you’ll get the look. Every trader I know uses telephone and Outlook. It’s a moat but not the biggest in my opinion.
5- BBG does A LOT. I believe that a given user typically uses some small fraction of a % of functionality (like 2-3%), eg Chat + news + 2-3 pages. I think if one were to compete against Bloomberg, one would have to focus on not being everything (like Money.net or Eikon which isn’t working) but isolating key verticals and building a comprehensive alternative for that space. Going up against all tools everywhere globally feels like a fools errand.
For example, there is a site called Artemis for catastrophe bonds. Everyone serious in that market I’m sure has a BBG terminal and yet everyone also actively visits the site which is run by one guy.
I agree on the key verticals approach as being the best bet. Perhaps the best way to dip your cup into the raging river of Bloomberg cash flow is to take a page out of the Stripe/Twilio book and focus on API first, with phenomenal Excel and Python interfaces, docs and examples. Just forget about a terminal-like UI, or any UI at all and build the tools that make it easier for other people to build their own niche apps. Money.net, Sentieo, YCharts, Koyfin -- my observation is that these all treat the programmability of their data and analytics as a secondary focus, or not a focus at all. It would be nice to see someone come along and do it the other way round.
Re: #3 Doubtful IMO. I personally believe that ISINs are the most viable alternative (and far less expensive to license). The issue is that you will have to get the industry (or perhaps just JPM/BOA/CITI in the US) to stop quoting and executing everything with CUSIPS... I think the best fix here is a legislative one personally. CUSIPS along with all corresponding identifying data on a security should be public domain in my opinion.
#5 I probably shouldn’t have said that, at this point my anecdotal observation on it is too dated. At the time I worked in banking and evaluated it for our team it did a lot but not enough, was pretty but challenging to figure out and everything was being “worked on”. Everyone I knew either had BBG or FactSet.
My observations:
1- BBG is now part of a banks (and most large trading firms) infrastructure. BBG vCons are the standard way to confirm trades, its chat is one of three tools approved by banks, it has all the APIs to monitor every piece of communication, etc
2- BBG has proprietary data sets no one can get or on terms no one else will ever receive (Eg CUSIP).
3- I think that if the CUSIP license were more open and affordable, we would see many more competitive products. Instead S&P effectively has a monopoly. CUSIPS are the foundation of any alternative. The reality is you need many millions to get that feed and must charge hundreds to each customer. Few can do that
4- I think the idea of BBG as a social network is way over valued. It’s convenient yes but if you have inventory other people want in fixed income you’ll get the look. Every trader I know uses telephone and Outlook. It’s a moat but not the biggest in my opinion.
5- BBG does A LOT. I believe that a given user typically uses some small fraction of a % of functionality (like 2-3%), eg Chat + news + 2-3 pages. I think if one were to compete against Bloomberg, one would have to focus on not being everything (like Money.net or Eikon which isn’t working) but isolating key verticals and building a comprehensive alternative for that space. Going up against all tools everywhere globally feels like a fools errand.
For example, there is a site called Artemis for catastrophe bonds. Everyone serious in that market I’m sure has a BBG terminal and yet everyone also actively visits the site which is run by one guy.