Tuesday, 11 September 2012

The magical Mr Bloomberg and his amazing clouds

Previously on the magical Mr Bloomberg show

Yesterday I wrote about how Bloomberg is the the $30bn cloud company you've never heard of.

Today I just want to flesh out a little about Bloomberg's cloud offering, because people don't often think of it in that way. You go through any self-congratulatory list of Top Digital Startups, disruptive cloud companies or cool cloud companies and see nary a mention of Mr Bloomberg. Despite the fact that Bloomberg is a cloud company, disruptive and (dare I say it) cool.

First to recap what I mean by cloud computing. Below is the chart I laid out in last week's post. Cloud comes in three forms - infrastructure as a service (e.g. Amazon EC2), Platform as a Service (Facebook Platform) and Software as a Service (Hotmail). What distinguishes each is how much of the traditional in-house IT stack is outsourced to the cloud vendor:

Bloomberg's SaaSy box of tricks

Traditionally Bloomberg runs a very sophisticated Software as a Service offering, streaming its news, data and analytics through to its Bloomberg terminals. The vast majority of users tend to use three basic services - stock quotes, news feeds and Bloomberg Messaging. I daresay this is "money for old rope" as far as Bloomberg is concerned because this doesn't cost much to provide, but users pay the full whack (c$20,000 a year) for the privilege. It's like when you join the gym in January, but only ever use the running machine (top tip - skip the gym membership and just go, er, running instead).

Note I said it was a "sophisticated" offering though. Under the hood Bloomberg offers an imaginably diverse range of functions from a fully featured (and excellent) crowd-sourced restaurant guide (EAT) to implied option volatility analysis (SKEW) to quite reasonable (for a London-based ice-hockey fan) coverage of North American sports (BSPD). In fact the grab-bag of services is unending - check out this article which highlights how you can use it to bet on sports, blog or search for jobs.

Bloomberg restaurant review. Surprisingly tasty (if you like Polonium with your maki).

It's a powerful box of tricks. When I think of the "enterprise grade" SaaS vendors out there (Salesforce, NetSuite, SAP ByDesign et al) I think it stands toe-to-toe with any of them in terms of functional breadth and product maturity. Remember Bloomberg were doing SaaS back in 1983!

Bloomberg takes the cloud on the road

One thing I think that has clouded (no pun intended) people's view of Bloomberg is its reliance on selling its own proprietary hardware and terminals. Cloud computing companies are associated with browser-based delivery. Terminals make Bloomberg look like an appliance vendor, rather than a software startup.

That's changed in recent years. First came the launch of Bloomberg Anywhere, which allowed you to fire up Bloomberg via the browser on any machine (albeit via a somewhat kludgy Citrix plugin). More importantly has been Bloomberg's move to embrace mobile devices with Android, iPhone and iPad apps offering a decent chunk of Bloomberg's core functionality on the road.

In fact can't think of any other enterprise vendor apart from SAP which has been putting as much emphasis on mobile. In particular Bloomberg were very fast to build deep enterprise functionality into its iPad app. I suspect this reflects the fact that many early iPad adopters were Wall Street jet-setters with high disposable incomes but limited space in their carry-ons. Exactly the type to embrace a tablet as a primary mobile device while the rest of us were still figuring out how to crack Angry Birds!

I'm also amused by the fact that Bloomberg has even been winning User Experience awards for its mobile offering. Now the Bloomberg interface has many merits (as I will write about later this week), but impressing Marc-Jacobs-shod UX gurus isn't one of them (definitely worth checking out their awards submission pdf for an insight into how seriously they're taking the mobile angle).

Bloomberg are getting serious about mobile.

Bloomberg are opening up the platform

The most disruptive element of Bloomberg's cloud strategy is its potential as a Platform-as-a Service offering. As I wrote last week, cloud gets genuinely innovative when it gives the customer the flexibility to run their own apps on a cloud platform and plug them into the vendor's APIs. Again Bloomberg has been ahead of the game running its own proprietary API (BLPAPI) for many years. More recently it upped the ante with its Open Bloomberg initiative, opening up its API and SDK to users free of charge. Now partly this is just competitive positioning (even though the API is free you still need to pay an arm and a leg to Bloomberg to access the actual data and do anything with it!), but is also shows the maturity of Bloomberg's API offering.

The diagram below (taken from the Open Bloomberg developer's guide) shows the basic architecture of the platform. It's not rocket science - the API allows you to pull data from the Bloomberg data centre (e.g. into Excel), manipulate it client-side and then publish/broadcast the data back into the Bloomberg system.

Effectively this means you could build a customised function (e.g. the Uneasy Empires Foie Gras Yield Calculator) and open it up to your clients who are using Bloomberg. For example they could use the UEFGYC to plug in assumptions about how much foie gras they want to bake, you can pull the data, crunch it at your back end and spit up how much actual foie gras terrine they will have and how much will turn to mush (believe me when you bake a foie gras terrine, a large proportion of it leaks out as fat).

Now this isn't quite full Platform as a Service. As far as I can tell you can't actually run your apps on the Bloomberg data centre - you simply use the API to pull data and then republish it to Bloomberg's data store. However its definitely got the building blocks there for a fully fledged PaaS. This is most definitely a case of Watch This Space.

On our next exciting episode...

The funny thing is this isn't (by a long way) the most exciting thing about Bloomberg.

It's great to have a better mousetrap (and I think Bloomberg does have a better mousetrap), but its even better to have the muscle to bash your opponents skulls in with it. As I've said before, having wide moats is a sine qua non for a successful tech company. And thinking about Bloomberg's moats they look extraordinarily wide...


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