Thursday, October 21, 2010

Data Clouds - Part 2

So, what was my proposal?  To refresh your memory from my last post, I was fortunate to explore the capabilities of the cloud and what it could offer data vendors.  As an application platform, although there are some limitations, there are real possibilities specifically in the off-trade floor businesses such as investment banking and wealth management among others.  As a distribution platform to enable customers easier access and integration of information sources into existing and new apps, the platform offers real promise.  But there was a third area I explored which I saw as a game changer.

One issue today is accessing clean and accurate data, not to mention the on-going support and maintenance of that data.  This includes not only customer and financial data sourced from inside the firm but externally sourced information which a firm depends on.  For larger financial institutions, this is getting to be a business onto itself.  Firms spend millions of dollars and thousands of person-hours addressing the issue of data and data quality.  The cost doesn't include data center space, servers and other infrastructure to support the number of applications needing the data stored therein.  In addition, much of this work is duplicated across firms.

Vendors generally offer datafeeds or APIs to push information out to customers who then store and replicate the data across their enterprise - highly inefficient.  While looking at and a firm they acquired, Jigsaw, I saw an opportunity.  For vendors, much of what they do is data collection and data quality - why not move this 'business', this function into the cloud?  Why not run a cloud-based data management business for customers?  Why not do for data management what the cloud did for infrastructure management?

This was my proposal - for TR to get out of providing data collection and management services for one customer (effectively, TR) and provide the same service in the cloud - starting with customer data on - and go from there.

The response was simply this - TR doesn't run a data management service.  Yes, that's right, according to a couple of my former colleagues - one of the world's largest information providers doesn't operate a data management service.  Now to me, data management is the core of what TR does (not to mention what Bloomberg or Factset or S&P and others do); the applications and other 'products' each offers are an off-shoot of this core business. 

So here's the opportunity for a vendor - go back to your first principles, start offering a data management service for customers.  Start moving to where customers store and want their data (and other data) to be located.  Use the years of experience in building data management systems to build and run your customer's data systems.  Accenture and other consulting firms do it, why can't you?  You are all fighting over the same pie, create a new market and expand what you do, don't limit yourselves.  What you can't do is try and offer a 'product'.  Don't look to sell another software solution or another 'configurable' data platform - its not what people want.

If you can't figure out the difference, well good luck to you.....

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