Bloomberg L.P - Becoming An "open" System

In the mid-1990s, Bloomberg stood apart from its competitors by being the only market data provider that required customers to lease one of its terminals to gain access to its information. Rivals like Bridge Information, Dow Jones, and Reuters all allowed subscribers to use their own PCs to link into a digital data feed, from which they could dump selected information into applications like spreadsheets, databases, and word processors for customization. Even more importantly, users could integrate data from a variety of sources for any purpose short of publishing it themselves. Despite the obvious benefits of such a system to clients, Bloomberg gave in to market pressures to offer a more "open" system rather slowly. In 1995, the firm began allowing subscribers to access its data from any PC, but restricted the actual download of raw data so that users could do little more than dump numbers into spreadsheet software. The price of the data was the same as the terminal itself—roughly $1,140 per month. This package, known as the Open Bloomberg, required that data be transferred via a Bloomberg server to desktops using either Unix or Windows NT. It also required subscribers to use a Bloomberg keyboard, which had built-in audio capabilities and color-coded keys.

In 1996, the firm's Bloomberg Data License opened things up a bit further. The license gave subscribers access to a raw data feed and allowed them to select the data they wanted, which varied in price depending on the amount and type chosen. However, Bloomberg's analytic features, which many analysts believe are its most valuable commodity, could not be downloaded. Eventually, the firm also introduced technology, called ActiveX, that allowed subscribers to customize the information displayed on their Bloomberg boxes.

Despite being criticized for maintaining a more "closed" system than its competitors, Bloomberg received praise for its proprietary machines, which were considered among the most comprehensive in the industry. Rodger Shaw, a writer for America's Community Banker claimed Bloomberg's technology was "like the Internet, with none of the 'signing on' and 'looking up' complications." Bloomberg terminals use high-speed telephone lines that allow users to access real-time market price information about securities. They also offer comprehensive information about the securities themselves; detailed historical information about prices, including comparisons of prices spreads over several months or several years; and extensive financial information on corporations, including documents filed with the Securities and Exchange Commission. Thanks to Bloomberg's extensive news wires, the terminals display financial news as it breaks. Analytic features allow the machines to examine a bond's past performance and project its future potential, as well as to assess things like how a bond purchase will fit into a specific portfolio. Subscribers also can use their "Bloombergs" for video conferencing, e-mailing, trip planning, employee recruiting, and even personal tasks like reading horo-scopes and gift hunting.