2011 - Check In on Predictions

August 1 - can it be the summer is nearly gone and the year over half way gone?  It is true and as a result, I thought I'd take a look back on my 5 fearless predictions for 2011  and see how I've done.

Prediction 1 - Organizational Shake up at Thomson Reuters.  I guess I got this one right.  After one minor adjustment in February, the much needed shake happened just a couple of weeks ago.  More changes are sure to follow as the Woodbridge team look deep into the organization.  Whether the changes turn around lack-luster performance in some of the units remains to be seen.  We'll weigh in once more becomes available.

Prediction 2 - Factset expands into Investment Banking with more gusto.   Ok, I guess Factset hasn't done much here.  In reading through their quarterly releases, sell-side business has been 18% of new revenues since early 2010.  They remain arguably the choice desktop for portfolio managers and researchers and continue to make in-roads within M&A functions.  However, if they did more to tie the buy and sell-side together through research and advisory tools and collaboration, they could hit 20 to 25% growth.  For now, this is a miss, but to reach a billion dollar company, diversification of their portfolio of products is needed and Banking makes the most sense.

Prediction 3 - InfoGroup enters into financial services.  This might be a 2012 actuality as opposed to 2011, but signs are there.  The company, under Clare Hart, has sold off a couple assets and Gemma Postlethwaite has brought on board ex-Thomson Reuters I&A content strategist Christian Ward, who's work in the financial data space is well known.  With the pending changes at TR, I would expect Ms. Postlethwaite and Mr. Ward to poach a few former colleagues for InfoGroup to set the stage for an aggressive 2012.


Prediction 4 - Market data accelerates to the cloud.  Well, this one was true, and as expected it wasnt a named vendor but an exchange that set the bar.  NYSE Euronext made a couple announcements the first part of the year which showed the exchanges commitment to the cloud as a technology solution for the industry.  In particular, their announcement of a "Community Platform" in cooperation with VMWare and EMC.  As I noted in this research report in partnership with Saugatuck Technology, this move has tremendous upside for customers and NYSE.  Will more exchanges follow NYSE's lead?  It remains to be seen.  As for vendors, they seem to be lagging well behind.

Prediction 5 - Apple acquires Salesforce.com.  This one hasn't happened (yet) but it still remains appealing.  As noted by Business Insider, Apple has over $76 billion in cash on its books, more than the US government at the time of this post.  Saleforce.com market cap is only $19 billion.  Apple hardware and Salesforce.com software/platform make an ideal combination for the enterprise.  Salesforce.com's annual conference is scheduled for August 30 to September 2 and each Dreamforce they have a major announcement.  What will this year's be?

Of the 5, 2 have been correct, 1 is leading to be correct and the other two are still out - not bad.  With another 5 months to go, here's hoping I go 5 for 5.

Predictions for 2011

Happy New Year dear readers and I hope 2011 is filled with success for you all.  With the New Year come resolutions and predictions and I've read more than a few.  So staying with the theme, I thought I'd venture a few predictions of my own on the information and cloud industries just for fun.

Prediction 1 - Organizational shake up at Thomson Reuters Markets.  Although the A-Team group's Andrew Delaney has been on this since mid-last year, I think this year is where changes finally occur.  An influx of external talent into the Enterprise and Sales & Trading organizations, a major sales re-org kicked off this year and poor performance by some of the Investment & Advisory segments leads me to think some shuffling is due.  Sources also tell me of a general hiring freeze through Q1 of 2011 which also has preceded organizational changes in the past, seems to indicate some shifting of the deck-chairs.

Prediction 2 - Factset finally expands into Investment Banking with more gusto.  Reading through the recent Factset filings indicate they have been steadily investing into their stable of content assets with high value into the IB space.  Enhancements to the ex-TF Worldscope data (now called Factset Fundamentals), new issues, M&A data as well as other PE/VC data sets, seem to indicate they are ready to go after the junior banker/knowledge worker space.  They might not have all the necessary assets for the senior banker but their partnership with Dow Jones supports that sub-segment.

Prediction 3 - InfoGroup enters the financial services space.  Clare Hart, CEO of InfoGroup, is too smart and too experienced not to.  Add to it her recent hire Gemma Postlethwaite from Thomson Reuters to run products and content, tells me they are shifting from serving only the sales and marketing segments.  Ms. Postlethwaite has significant experience in the Investment Banking space and built the latest Thomson Reuters Banking desktop product.  As well, her experience in managing the data alliances for the Investment & Advisory division of Thomson Reuters more recently, gives her insight into the other competitors and their relative content strengths.  Its a good hire and indicates to me Infogroup to make a push into financial services, specifically in Investment Banking before year end.

Prediction 4 - Market data accelerates into the cloud - and not through big name vendors. As I've mentioned before, smaller cloud-based 'data vendors' are starting to appear to support off-trade floor uses of market data.  This is the year one or two make their presence known.  While the name vendors - Thomson Reuters and IDC mainly - invest in a 'market data cloud' themselves, I expect firms of all sizes look to other providers.  Firms are already realizing the 'standardized' data product of the vendors is limiting and in often interferes with their data strategies.  Access to raw, "as prepared" data directly from sources, rather than the packaged data through data vendors, will become increasingly in demand and impact on big-box vendors adversely.  A couple firms will start to break-through and will start to erode large vendor revenues for off-trade floor data needs.

Prediction 5 - Apple acquires Salesforce.com.  With Mr. Jobs health in question, Apple will need a strong voice and leader to support if not replace Mr. Jobs for the overall good of the company.  As Microsoft has shown, putting a good operations guy in the number 1 seat doesn't lead to maintaining a leadership position and innovation.  These company traits start at the top and Mr. Benioff's resume is solid enough to replace Mr. Jobs.  As I said in a prior post, back in June of last year, the tie-up of Apple and SFDC complete both firms and puts them as the sole competitor to Microsoft, outside of search and gaming.  SFDC sees the iPad and Apple technology platforms as the clear winner and placed a firm-wide bet on the Apple products.  However, should Mr, Jobs condition be debilitating, and we hope it is not for nothing else than for him and his family's sake, Apple will need to find a new head as the firm faces increased competition on its core businesses and seeks to expand into the enterprise market.  That search for a new CEO should start and end with Mr. Benioff.

There you have it, 5 fearless predictions for 2011.  Appreciate comments on any or all of them, but we will see in 12 months time if any are actually accurate.  If anyone has any predictions of their own, love to hear them.

Until next time....

Data-as-a-Service

Dun and Bradstreet have fired the open salvo in the pending Data-as-a-Service war, with their D&B 360 product.  D&B 360 is an open API which allows customers to access the full breadth of D&;B data to power a customer's applications.  Integrated with Salesforce.com, D&B 360 enables a customer to pull in data over 160 million companies stored in the D&B databases for sales and marketing.

This is a big step, as it suggests that D&B is drawing some clear lines for customers, partners and potentially competitors as well, to where D&B is investing and considers its core value to customers.  As I noted in my previous post (The Next Great Information Company), information providers need to make some choices as to where they will specialize and consider their core business.  For D&B, leadership in financial risk management applications as well as sales and marketing solutions marks the extent of the application business potentially.  However, for their data and information, there is an opportunity to grow revenues significantly as other ISVs learn to leverage the D&B data for other business purposes.

At Dreamforce next week, the Salesforce.com signature event, D&B plans to announce additional details and explore with prospective customers and ISVs how D&B 360 can help them.  It will be interesting to see where they take this innovative solution.
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On another front, I hear there is a ground-swell of start-ups to deliver a 'data cloud' much like the solution D&B and offers.  This is a good thing.  Much like Salesforce.com's push to SaaS CRM solutions and the subsequent embrace of the cloud by Microsoft and others, having a healthy vibrant stable of data-as-a-service providers offers customers choice and keeps costs down.

In a conversation with a couple old friends the other night, we discussed if the data cloud truly is viable.  Some of the issues they raised were primarily around what traditional providers have stated as their core value - we link all the data bits together and 'normalize' the data.  True, but it is still a valid point?

There have been a series of very interesting articles from the A-Team Insight group that highlight to me that the answer is no.

Just this week there were 3 separate pieces that demonstrate that customers are actively looking to work around the vendor data structure, thus paving the way to a seamless data cloud.  From this week's A-Team Insight (A-Team Group.com) there were articles from Deutsche Bank, Northern Trust and Goldman Sachs, which indicated each are: a) breaking down internal data silos; b) taking a more enterprise-wide approach to data management; and c) (in the case of Goldman) establishing their own centralized symbology service.  Although this in itself isn't news, (larger firms have always had individual identifiers), what is news is that there seems to be more open talk of ending vendor identifiers - or at least their complexity.

This was clearly drawn in the same A-Team report, where David Berry, member of the Information Providers User Group and head of market data sourcing and strategy at UBS, clearly states customers are, to paraphrase from Howard Beale in Network, 'mad as hell and we're not going to take it anymore'.  As Berry is quoted in the piece: "Vendors introduce complexity into the market by attempting to differentiate themselves on the basis of instrument identification and this should be eliminated".  A clearer line in a sand has never been drawn.

To me, the initial lines of breaking the large vendor monopoly are starting to appear.  It will be interesting to see where we are in 12 months time.....