In 1989, Reuters the legendary international
news agency based in London launched an
ambitious and secretive project.
Bloomberg, a relatively young New Yorkbased company,
had been eating into Reuters market, providing analytics
and data to Wall Streets Masters of the Universe via
proprietary terminals. Dubbed Decision 2000, the projects
goal was no less than the destruction of Reuters
competitor and its terminals.
But to beat Michael Bloombergs brainchild, the legacy
brand first needed to rival it. Reuters tasked Capital Market
Decisions, a firm led by ex-Smith Barney executive J. Stephen
Levkoff, with developing an investment analytics system on par
with the one luring away clients. Reuters played hardball
but it also played dirty, evidence suggests: In the late
1990s, federal prosecutors obtained more than 100
communications between Reuters officials and a consulting
company that investigators believed was hired to steal
information from Bloomberg, according to The New York
Times. But the alleged Watergate tactics failed, as would
It was the first product to be dubbed a Bloomberg
killer, and that was unfortunate, says Douglas Taylor, a
former Reuters executive who worked on the project. It
wasnt a bad product, but it wasnt a Bloomberg
In 1993 relations between Reuters and Capital Market
Decisions soured. The project collapsed; lawsuits ensued;
accusations of intellectual property theft were lodged.
And Bloomberg remained.
Since then a handful of other products have taken on the
mantle of Bloomberg killer. So far none has succeeded. Up
to this point, any so-called Bloomberg killer has ended up as
roadkill itself, says Taylor, who now runs his own firm,
Burton-Taylor International Consulting.
Yet large-scale shifts in banking and money management
including compressed margins and, correspondingly,
shrinking information-service budgets are causing a
mature Bloomberg more pain than copycats ever did. Its terminal
count has barely risen over the last five years, according to
Burton-Taylor. And last year, for only the second time in the
companys 35-year history, the terminal total shrank.
(Bloomberg doesnt have physical terminals anymore, but
rather a software package officially named Bloomberg Terminal.)
At the same time, another generation of upstart competitors,
including Money.net and Symphony, has emerged.
Can anyone finally bury Bloomberg?
The basic complaint about Bloomberg is its
price always, forever, infuriatingly, the
Whether Ray Dalio or Ray Daytrader, everyone pays the same
price: $25,000 a year for one terminal and $22,600 a year per
terminal for more than one. No discounts are available.
Ive been a Bloomberg user for close to 25
years, says Seth Shalov, a partner and portfolio manager
at $4 billion MAI Capital Management in Cleveland. And
for 24 years, I have been frustrated with their pricing.
Bloomberg declined to comment for this story.
Banks, of course, have faced economic struggles since the
financial crisis, making Bloomberg terminals an onerous
expense. And many money managers are seeing less revenue amid
the shift to passive investing and general pressure for lower
fees, putting their budgets for information services under
JPMorgan Chase & Co. CEO Jamie Dimon complained in a
recent letter to shareholders that his bank paid $9 billion for
its technology services in 2016 a sum about twice the
gross domestic product of Fiji. For many financial services
firms, information technology is the biggest expense after
Its no wonder, then, that Bloombergs terminal
volume climbed only 0.7 percent annualized over the last five
years, and that it shrank 0.96 percent last year, to 324,485,
according to Burton-Taylor.
But a large number of financial market participants see
Bloomberg as an absolute necessity, regardless of the cost.
Its basically a way of life for many people,
says Bloomberg user David Gilmore, a partner and currency
analyst at Foreign Exchange Analytics in Connecticut.
Bloomberg provides one-stop shopping for data, analytics,
news, and trading. Bruce Falbaum, who invests in high-yield
bonds and leveraged loans as a senior portfolio manager and
principal at $1.6 billion Cohanzick Management in
Pleasantville, New York, has used Bloomberg for 20 years.
Hes not looking to make a change now.
For the things it does, I dont find anything
that really compares though, honestly, I havent
looked, Falbaum says. Market makers post high-yield bond
prices and send traditional communications to customers like
him over Bloombergs messaging system. I see the
entire market going on in front of me on Bloomberg. Im
not aware of any other place where I can do that.
Cohanzick has six Bloomberg terminals and would love to trim
the expense. Thats real money for a firm like
ours, Falbaum says. But a replacement would have to
include the same capabilities he and his colleagues enjoy on
And just as important, the other players in his market would
have to adopt the new service as well, so he could continue to
communicate with them. We have relationships with about
100 broker-dealers, Falbaum says. I can use a
scraping function to see their quotes that are contained in
messages, and then I can contact them to potentially do a
trade. Thats all on Bloomberg. It would be very
difficult for a competitor to gain a critical mass of users, he
One complaint lodged against Bloomberg by competitors such
as Money.net CEO Morgan Downey is that the terminal is
difficult to use clunky, as Downey puts it,
citing outdated software and the lack of touchscreen
But only one of the 16 Bloomberg users contacted for this
story echoed Downeys complaint. A market analyst, who
requested anonymity to avoid alienating Bloomberg, says that
when he is looking for an old news story about a specific
event, he can often find it more quickly with a Google search
than by going through Bloomberg hardly a fatal flaw in
Bloombergs front end is antiquated, Taylor
says. But regardless of how cumbersome it is, you still
get the best result on the street. From Bloomberg users,
almost all the complaints focus on price.
Some say they are open to switching, or at least adding a
competitor to Bloomberg. One is the co-head of portfolio
management at one of the countrys largest money managers,
which only communicates anonymously to the media and utilizes
85 Bloomberg terminals. He has great respect for the
Bloomberg is a very fantastic product, he says.
In addition to the terminals capabilities, Bloomberg is
extremely customer-centric, he says. They are
focused on improving their products in any way that users find
meaningful. They have earned a spot in our ecosystem.
But his firm would love to find an alternative to the
colossus. First, theres the $1.9 million its paying
each year for its Bloomberg terminals. The per-terminal price
has climbed 25 percent over the past ten years, the
executive says. People are concerned about price, but the
more inextricably linked you are to Bloomberg, the more you
realize you have to pay that price, he says. There are
competitors in narrow areas with products his firm views as
superior to Bloomberg. The firm pays for those services in
addition to Bloomberg.
Another reason the firm would like an additional
full-service solution is to avoid complete vulnerability to a
Bloomberg network outage. Such a breakdown occurred for a few
hours in April 2015, effectively shuttering parts of financial
markets around the world. We are actively looking for an
alternative to Bloomberg, because we feel like a competitor
even if its just for a piece of the business
is in our best interest, the executive says.
A friend of his who is the head trader at a global macro
hedge fund recently switched to Money.net from Bloomberg for
all nine of the firms traders. The head trader declined
to identify himself or his fund. He told me that knowing
the work I do, if I spent six weeks using Money.net, I would
forget about Bloomberg, the executive says.
Money.net and fellow new entrant Symphony have
been all the rage as of late to the financial
media, at least.
Money.net, built by ex-Bloomberg commodities chief Downey,
charges $150 per month, or less than 10 percent of
Bloombergs fee. Downey, 44, grew up on a farm in Ireland.
After graduating from the University of Limerick, he ventured
to New York City, where he found a job as a junior fixed-income
derivatives trader at Citibank. He later specialized in
commodities, and after working overseas for Citi and Bank of
America, he joined Bloomberg in 2010 to lead its commodities
He had used Bloomberg since the beginning of his career in
1993. But even then I thought it was old, Downey
says. Seeing that after the financial crisis users were
increasingly concerned about Bloombergs pricing and
sensing they were disappointed with the terminals
technology, I figured I could build a better system at
one-tenth to one-fifteenth of Bloombergs cost,
Downey says. And so he went to Money.net in 2014.