Sky Grid: Thomson Reuters and Bloomberg Challenger
January 6, 2009
A reader in the Eastern Mediterranean alerted me to SkyGrid, founded in 2005. After a bit of checking, I found some information in the TechCrunch write up here. The SkyGrid Web site here provides a run down of the media coverage the firm’s for-fee service has achieved. The founder of the company is Kevin Pomplun who combined high value content and what one commentator called “flow based architecture”. The notion is that information is dynamic, and the SkyGrid system is constantly refreshed. Once configured, the system delivers search without search. The service costs about $500 per month per user. The target market appears to be Wall Street’s analysts and related disciplines; for example, some intelligence and law enforcement professionals will find the service interesting. Based on information available to me, SkyGrid uses proprietary methods to acquire, process, and personalize information for each user. The technologies embraced by SkyGrid hit such hot buttons as sentiment analysis (whether information is positive or negative), categorization (figuring out what an article is about and tagging it with a classification code and term), and graphic displays of data (stock price change, for example). When I reviewed the service, I noticed parallels between SkyGrid and data on the terminals in financial shops now. The dense display (shown below) appeals to those in the financial business. The idea is to provide hot information in one place. There are some similarities between SkyGrid and Silobreaker, which I have described in this Web log. Other services that offer similar functions include FirstRain (which asserts that its technology “changes the rules of research). Monitor110 was another similar service but fell upon hard times in mid 2008.
Source: SkyGrid 2008
Several comments will let me capture my thoughts:
First, the financial services sector has some challenges facing it. As a result, I expect some of the big name Bloomberg and Thomson Reuters customers to start demanding more value. The word value, in my opinion, means price cuts. This may be good or bad news for companies like SkyGrid. The good news is that its price point is appetizing compared to the hefty fees assessed by the incumbent real time data providers on Wall Street. The bad news is that a start up lacks the track record of the incumbents, so the cost of sales might be an issue. Long decision cycles may also work against the newcomers.
Second, other companies are pushing into real time. These range from “utility” type vendors such as Exegy. This company’s value proposition is speed; that is, no bottlenecks. Latency is a big deal for the surviving financial services firms. Also, such companies as Connotate and Relegence offer appealing services that are even more customized than some of the services now trying to make sales to the Wall Street crowd (minus Mr. Madoff’s operation, BearStearns’ and Lehman Brothers, of course).
Third, these new services are at their core “dataspace” plays. As the volume of information increases, the cost of the plumbing will be an ongoing issue for these challenges to Bloomberg and Thomson Reuters. Cluuz.com, for example, has shifted from direct indexing of Web content for its demonstration service to the Yahoo “build your own search service”.
Fourth, the for fee content vendors are going to have little choice but raise their rates. The Factiva unit of Dow Jones struggled as an independent entity. Now that company is inside Dow Jones and as Dow Jones’s financial pressure mount, watch for Factiva to charge more for its services, particularly the Wall Street Journal and Barron’s data.
Fifth, the Google looms over this entire sector. Here’s why that company is a serious mid term threat to both incumbents and start ups:
- Scale. Google has plumbing. Incumbents and competitors have to get it. Expensive that.
- Data. Google has quite a bit of structured and unstructured data. The incremental cost to the GOOG to expand http://finance.google.com is incremental, maybe incidental.
- Brand. The GOOG has the hot brand. Brand visibility sells.
In closing, I think there will be consolidation and attrition in this sector. I don’t think the services have flaws. I think that the broader datasphere is marshalling forces that will make life difficult.
Stephen Arnold, January 6, 2008