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In the twilight you probably would have missed him. In late 2012, at about 6:30 every weekday evening, a slight, compact bald man in his 50s would emerge from the shadow of the tower on Manhattan’s East Side that houses Bloomberg LP, the world’s largest financial data provider. Dressed in triathlon gear, he’d perform some short stretches, then slip quietly away into the streets leading west. It was an unassuming afterwork routine for a man faced with a difficult task.

Earlier that year Stanley Young — fitness fanatic, financial technology veteran and former member of the British Army’s Special Forces — had been hired away from NYSE Euronext, where he’d spent more than three years as head of the exchange operator’s technology division, to manage Bloomberg’s enterprise data business. Great hopes were invested in Young. Bloomberg had risen to the pinnacle of the financial data industry on the back of its fabled desktop terminal, a one-stop, perma-blinking information pleasure dome encompassing data, news, analytics and much, much more — the financial product world’s answer to the Broadway show. But the company that Michael Bloomberg famously founded in 1982 with a $10 million severance check from Salomon Brothers recognized that the financial industry was changing and that it would have to adapt to survive: As Wall Street cut jobs and embraced greater automation, the model of a fixed-price, all-encompassing black-box terminal, installed at great cost on a financial professional’s desk, had a limited shelf life.

The terminal was, and still is, Bloomberg’s lifeblood. More than 80 percent of 2013 revenue came from the service, which the firm sells to customers for a flat fee of about $20,000 a year. Pivoting away from the terminal while doing nothing to damage the rivers of gold it diverted into the company’s balance sheet was sure to be tricky. Young was brought in to manage that transition by building up Bloomberg’s presence in direct, open feeds, à la carte data provision and in-firm data management — in other words, every part of the data world that exists outside the serene and closed ecosystem of the terminal. Evening runs in Central Park were his therapy.

But less than a year after joining Bloomberg, Young was gone. “Stanley Young joined Bloomberg to help broaden our enterprise offerings and strategy,” a statement by the company announced in May 2013. “We are grateful to Stanley for his contributions and wish him well in his future endeavors.” Bloomberg insiders say Young’s time at the firm coincided with a “civil war” over how deep and significant the pivot toward the enterprise business would be. Vice chairman Thomas Secunda, one of four founding partners of the firm and current head of the financial products division, is known throughout the industry as Mr. Terminal.

“Tom’s a brilliant guy; he’s got a brain the size of a planet,” says one former Bloomberg senior executive. “But everything he does is colored by the desire to see everything on the terminal. He has great ideas, but they all lead back to the terminal. If you want to access new functionality, if you want to access product innovation at Bloomberg, it’s $20,000 a year to buy the terminal subscription, and that’s nonnegotiable. There’s no other way in.”

Gerard Francis, a Bloomberg lifer who has been at the company for more than two decades and previously served as Secunda’s chief of staff, replaced Young. The Englishman’s exit and the appointment of Francis at the helm of the enterprise group were largely interpreted by insiders as a sign that, in the civil war over the fate of the Bloomberg data business, the status quo — the terminal and Mr. Terminal — had won. Francis laughs off this suggestion. “There’s nothing further from the truth than that statement,” he tells Institutional Investor. “That’s a little strong.”

The news of Young’s departure was lost amid the furor that erupted at about the same time over revelations that reporters from Bloomberg’s news division had improperly accessed data related to clients’ terminal usage to generate stories. But in the grand narrative of Bloomberg’s future as a financial data company, Young’s failure to break the primacy of the terminal at the heart of the firm’s business model was a much more significant event. Now, with finance undergoing deep currents of change and many critics questioning whether Bloomberg’s terminal obsession will allow it to remain relevant into the next decade, the financial data giant is fighting harder than ever to repel a growing army of would-be disrupters.

Bloomberg — the company and the terminal — came of age in the 1980s, when there was no consumer Internet and the shift to automation throughout the financial industry was in its infancy. There were no dark pools, no algos, no matching engines and no kill switches in 1982, the year Bloomberg made its first sale. At that time, when most information in the real world was fragmented, disconnected, messy and difficult to digest, the terminal provided order and sense. That remained the case well into the 1990s, even as the Internet gained traction.

But times have shifted. The Internet is far slicker and faster than it was in 1999, and consumer technology — with its portable whirligig of apps, social networks, smartphones and selfies — is at the leading edge of innovation. Although the Bloomberg terminal, with its striking interface of black background and blinking orange and green lettering, once appeared innovative, now it “looks like something out of MS-DOS,” says Leigh Drogen, referring to the Microsoft Corp. operating system, popular throughout the 1980s and early 1990s, that ran on typed keyboard commands rather than the clickable icons made famous by Apple and Microsoft Windows. Drogen, 27, is chief executive and founder of Estimize, a data start-up that is one of many small companies looking to chip away at the edges of Bloomberg’s market share.

But the shift is more than cosmetic. In the wake of the 2008 crisis, with financial firms facing a raft of new regulatory and compliance costs, Basel III rules forcing banks to keep more capital in-house and growth throughout much of the developed world remaining below trend, the financial industry is cutting jobs and thinking far more carefully about how it spends its money than ever before. “All of those data vendors and data sales that are tied to bums on seats have reduced over the past few years, and I don’t think we’ve seen the end of that reduction,” says Douglas Taylor, founder and managing partner of Burton-Taylor International Consulting, an Osprey, Florida–­based firm specializing in the financial data industry. “Those bums aren’t going to be cyclical; the desktops won’t come back.”

Meanwhile, there has been a shift throughout the financial data consumer base from eyeballs to machines, part of a broader, society­wide transition to what the title of a recent book by Erik Brynjolfsson and Andrew McAfee terms “the second machine age.” Digital, machine learning–driven technologies are beginning to replace humans as the dominant agents in the financial markets — a trend best captured by the rise of high frequency trading, which now accounts for north of 50 percent of U.S. equity trading. As the human presence on Wall Street fades, so too, presumably, will the need for specialized products that only humans use. The terminal is not designed for machines; it is a product built for human consumption.

Changes to market structure in the wake of the financial crisis mean that many securities that were once traded through opaque over-the-counter channels, such as derivatives, are being forced onto open, transparent markets. This, in the view of some in the industry, hands a considerable data advantage to exchanges and clearinghouses, where many of these new markets will be transacted. Whereas specialist vendors such as Bloomberg once provided prices and data to help users understand these sometimes illiquid securities, public prices and the data around them will now fall into the custody of the exchange operators, robbing the data firms of one source of their historical competitive advantage.

Perhaps most critically, software development costs have fallen to the point that the barriers to entry into the financial data market are far lower today than previously. Countless ambitious start-ups are looking to exploit open, easy-to-deploy, cheap technologies, many of them adapted from the consumer realm, to carve niches for themselves in the data world. “There’s a fervor of debate, discussion and conjecture taking place in the market data industry the likes of which I haven’t seen before, and I’ve been in this industry for 20 years,” says David Craig, president of the financial and risk business at Thomson Reuters. “The cost of doing something fresh and innovative is lower than it’s ever been before.”

The overall financial data market continues to grow but at a decreasing velocity: It rose 6.8 percent in 2011, 2.3 percent in 2012 and just 0.7 percent in 2013, according to Burton-Taylor. Between the scandal over its reporters’ use of terminal information and the departure of Young, 2013 was a difficult time for Bloomberg. Financially, however, it was a banner year. As a privately held company, Bloomberg does not release its financial statements to the public. But according to Burton-Taylor, the firm generated revenue of $8.3 billion in 2013, pulling clear of its longtime rival Thomson Reuters to claim the mantle of the world’s largest financial data company.

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