Reuters has secured another four partnerships with software providers in its drive to “set up as many strategic alliances as possible”. And with 25% of their revenues – and growing – for the DataScope reference data service coming from the program, it’s little wonder that it is becoming an increasingly important strategy for the company.
The latest deals see Reuters’ data being made available to a varied audience across order management systems with LatentZero, economists with Ecowin, enterprise data management with SunGard Data Management Solutions, and the ISO 15022 crowd with STPenable.
Such partnerships, says Caroline O’Shaughnessy, Third Party Channel Director, EMEA, are usually driven by Reuters’ sales people who identify key software providers within a particular market sector or region, but can also be targeted as part of a strategic view of where Reuters would like to distribute its data.
The aim behind the partnership strategy is “to make our pitch more intelligent to clients so we can address more of their needs by enabling plug and play for our data within the systems they use.” At the same time, the partnerships “take DataScope further and wider than we can do ourselves through direct sales”.
As such, the objective is to build the contribution to DataScope revenues by over 30% next year and more after that. This is the responsibility of the third-party alliance team, which was established 18 months ago. It is led by London-based O’Shaughnessy, who is supported by Barnaby Nelson in Europe and Glenn Strier in the U.S.
The deal with LatentZero strengthens the presence of Reuters’ reference data within the order management arena (it did a deal with Princeton Financial Systems a couple of months ago), currently dominated by Bloomberg’s data services. Says O’Shaughnessy, “Order management systems have a need for data, particularly fixed income. LatentZero has a very good presence within Tier 1 banks in regions like London, Paris and New York. We have a good relationship with LatentZero through other divisions within Reuters, such as order routing, which we have lever-aged to secure distribution of our data.
“This is an example of Reuters as an organization coming together to provide combined services across the enterprise.” He says Reuters has deals with other OMS providers in the pipeline. “Once you do one deal, you figure out the specific data requirement of that sector, and can apply that know-ledge more easily to subsequent deals.”
The interface development has been completed, and target clients have been identified for its upcoming sales push.
Reuters’ partnership with Ecowin integrates its data into Ecowin’s database supporting its products that are used by thousands of economists and analysts. The first phase has been to plug in end-of-day pricing covering 1,000 fixed income instruments; a second phase will expand this to cover the full universe of fixed income data available via Ecowin.
The fixed income data comes from the former EJV bond pricing service that Reuters picked up through its acquisition of Bridge Information Systems in 2001. The EJV database covers 1.4 million instruments. Following the reversal of plans to migrate all data onto a new network infrastructure, the plan now is to port all Reuters’ fixed income data to the EJV technology.
Ecowin is paying for use of Reuters’ data within its services, although a content swap where Reuters distributes Ecowin’s economic data to its clients essentially nets out the fees between the two.
Reuters is also making its data available via industry newcomer STPenable’s Transformer data management system. Although early days in STPenable’s development, it does have a couple of hedge fund clients for its services. The company has a different philosophy to the larger data management companies, in its targeting of smaller institutions, particularly hedge funds, with lower cost data management services, says STPenable’s David Wynter.
Through Transformer, STPenable is providing a hosting platform for clients to access DataScope Portfolio. This could potentially extend to making the service available via market infrastructure provider Radianz.
Says O’Shaughnessy, “We view STPenable as a good potential gateway to reach their intended audience of T2 and T3 banks, a wider market that we might not otherwise reach.”
Wynter was previously a project manager for DataScope at Reuters and so is very familiar with the workings of the data service, including corporate actions. It is this knowledge he is leveraging in order to provide an additional service to Reuters: STPenable has been chosen to provide an ISO 15022-compliant version of Reuters’ data to the market on the vendor’s behalf.
Although the take up of ISO 15022 services in genreal has not been great so far, Reuters, just as with other vendors FT Interactive Data and Telekurs Financial, believes that when take up in the market picks up, they should be ready for clients as they eventually come on board. So far, there are seven or eight clients that have requested the service from Reuters.
Finally, Reuters’ deal with SunGard makes its DataScope data available through its managed data service as part of the Banc. “We believe this is the first of many via the SunGard platform and so we’ve been working to make sure our interface is scalable enough to handle multi-client environments.” Says John Wallis, vice president of sales, Enterprise Data Management at SunGard Data Management Solutions, “A central pillar to the success of our managed service offering is the longstanding and established partnerships we have with data vendors and our understanding of their business. Reuters is a key part of this strategy.”