Strength of habit: Why poor interface and high cost do not affect the popularity of the Bloomberg terminal
In our blog we told the story of developing our own SmartX trading terminal , and today we will talk about the cult terminal used by traders around the world - Bloomberg. And despite all its legendary character, not everyone is happy with it. But is anything threatening the leadership of this tool?
What is wrong with the Bloomberg terminal
For almost three decades now, the famous Bloomberg terminal has been operating on the screens in Wall Street trading desks. This tool is used by traders and heads of financial organizations to obtain information vital for business. But he has certain disadvantages.
Price
The terminal is very expensive - $ 21 thousand a year, so its leading role in the world of finance brings its developer, Bloomberg LP, billions of dollars. It is with this money that the journalistic division of the organization is maintained, and indeed the terminal is the main asset of the founder of this business empire and former New York Mayor Michael Bloomberg.
Wall Street is in the midst of a fever of cost reductions - market changes and new regulatory requirements are forcing companies to think about saving money. And here the Bloomberg terminal, a subscription to which in large organizations can result in $ 100 million, is an obvious candidate for reducing costs.
The New York Times published material in September 2015competitors of the Bloomberg terminal. This article provides comments on some current terminal users.
Among those who believe that the terminal is too expensive, and in the future it may play into the hands of its competitors and former top manager of Lehman Borthers Bank David Bullock (David G. Bullock). According to the expert, many of his colleagues in the financial market say that they “do not like to pay $ 25 thousand a year for Bloomberg."
They are also trying to find alternatives to an expensive instrument in Europe. So, according to Hamza Khan, head of product market at Amsterdam's ING Bank, his company began using one of the competing Money.net products. It is now implemented in several ING divisions with the goal of replacing current data providers in the future, including Bloomberg and Thomson Reuters.
Interface
Another disadvantage of the Bloomberg terminal is its not the most friendly interface. Moreover, for an unprepared person, he is completely incomprehensible, but it can take a huge amount of time to figure it out.
Many UX designers dream of making a “normal” interface for the terminal that will be understandable to users (for example, one of the concepts from IDEO). However, the management of the company, obviously, does not plan to follow the desire of the audience (usually its younger part), which is used to the fact that now almost any application on the desktop or smartphone allows you to carry out the desired action in a couple of clicks (we wrote on the blog on the creation of mobile terminals in the era of touch interfaces ).
Customer service friendliness
The rigidity of the terminal development company is legendary. For example, many Bloomberg users interviewed by New York Times reporters complained that they could not get a discount, even when their company paid for hundreds of terminals.
According to the founder of Money.net, Morgan Downey (Morgan Downey), the dissatisfaction of Bloomberg customers ripened for a long time, but the point of no return was passed when in 2013 it became known that the company’s management allowed its journalists to study the personal data of customers. Bloomberg and netizens, such as Reddit , have blamed “spying for your own money” .
However, all these disadvantages did not lead to a drop in Bloomberg's market share, although its growth has now slowed somewhat.
Why Bloomberg Doesn't Die
According to the New York Times, over the past year, the number of terminals grew by only 1.9% to 325,000. 10 years before the financial crisis, on average this number grew by 12% each year, with many companies signing up for several years at once.
The whole history of Wall Street shows that it is rather difficult for technology products to maintain leadership for two or more decades. Bloomberg ascended to the top in the 90s, displacing from the market the software that traders used before - for example, Quotron and Telerate. However, so far, Bloomberg, in fact, has no competitors.
The most successful project is Thomson Reuters, which for many years tried to suppress Bloomberg and achieved certain successes in this field. Bloomberg terminal managed to compete seriously, for example, in the niche of trading in foreign currencies. However, Thomson Reuters terminals are not much cheaper than Bloomberg, in addition, they are much inferior to their competitors in popularity in the USA, earning significantly less money.
There are several reasons for such a stable position of the legendary Bloomberg terminal.
Habit
As mentioned above, Bloomberg has been a leader in the exchange terminal market for a couple of decades. During this time, more than one generation of traders has grown up who are used to its unpretentious terminal. That is why all the attempts of designers to create a more “beautiful” version of the terminal run into fierce criticism of fans of the “old school Bloomberg”.
IDEO's new Bloomberg terminal design concept A
few years ago, UX Magazine wrote that “most users will not accept the new, more fashionable interface.” According to experts of the publication, studies have shown that many users are proud of the fact that they figured out this complex interface (including using the 86-page manual) and every day they use the terminal in work. Poor interface solutions, such as black background and yellow or orange text on it, are compensated by the image of “hardcore professionals”. Therefore, "the more difficult the work with the terminal, the more users like it."
Functionality
Until now, it was extremely difficult for other companies to deal with Bloomberg because of its scale and the number of services that are integrated into the terminal. With this software, you can get not just access to market information from world exchanges, but also to documents for almost every share, professional messengers, a tool for buying and selling shares, news feeds and this is not a complete list.
As noted journalists ZDNet publication, create more and more new unique "features" faster than the competition team Bloomberg terminal allows including the fact that they do not have to pay so much time appearance of the product.
New ambitious startups that aim to overthrow the Bloomberg terminal from the stock exchange Olympus can not yet boast even a tenth of its functionality. For example, the Symphony project, created by Goldman Sachs and received investment from large banks, provides an alternative to the most popular Bloomberg terminal function - a chat program for traders. According to the assurances of people close to the project, in Goldman Sachs itself, more than half of users of Bloomberg terminals mostly "sit" in the built-in chat.
However, many experts believe that creating a product that is superior to Bloomberg in any one area is futile. “Articles that Bloomberg is about to be squeezed out often appear, but in my opinion, they look pretty ridiculous,” says ITinvest senior traderAlexey Boyko. - Everyone writes that some kind of “messenger” or “chat for traders” will squeeze it out of the market, but they forget that this terminal has such a set of functions and such extensive analytics and information that a fashionable “chat” has it all do not interrupt. "
Network effect
According to Fortune, one of the main factors that guard Bloomberg's leadership is the effect of the network. According to journalists, not everyone understands that the main value of the terminal lies not even in its functionality of the vast amount of data, but in the fact that it is used all over the world.
“The Bloomberg terminal can even be called the first social network in the world,” says Matt Turk, a former Bloomberg Ventures employee. “In the target markets, everyone uses it to get information and communicate with colleagues, and popular web services like Facebook, Dropbox and Gmail in financial organizations may be completely prohibited.”
Alexey Boyko agrees with this opinion. “There are different terminals, portals and even chats in local markets - in Russia, for example, there is a TRData project. But these much cheaper products can’t gain popularity in any way, since there is nobody in them, and everything is in Bloomberg, the expert is convinced. “The principle of“ liquidity attracts liquidity ”works here.”
Future
Despite the fact that the media often write about the appearance of the next “Bloomberg killer”, market experts do not believe that anything threatens this product in the near future.
“Bloomberg will be defeated only if there is a revolution in the dissemination of all exchange information,” says Alexey Boyko. “The new“ ICQ ”from Goldman Sachs, although it is behind a formidable name, is absolutely not drawn to the revolution.”
Fortune expert Matt Turk also holds this position. In his article, he directly says that creating startups aimed at global competition with Bloomberg is futile, and you need to go to niches that this company prefers to ignore. In his opinion, it makes sense to try to create some kind of financial social networks, tools for collecting big data and their analytics, or platforms where third-party developers could publish their financial applications.
As the experience of mobile applications like Robinhood shows, there is a chance for those developers who prefer not to beat off users of current financial software products, but to attract new people to the exchange, providing them with a convenient and easy way to complete transactions using swipes and tapes .
See also: Five UX-tricks for creating exchange software