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Will Symphony Lead to the Fall of Bloomberg's Terminals?

May 18, 2015

In the mid to late 90s, one of the offices I set up had two Bloomberg terminals. The office was for a risk transfer company so it was important for them to be in the loop of what was going on in the financial world. The thing I remember most, other than how expensive it was for a single function terminal, was how much time I spent with their technical support, almost a weekly event, to resolve several issues.

Fast forward 20 years and you will still find that the service costs in excess of $20,000 per year. A lot has changed since the days that I had to deal with clumsy terminals, back then people were still trying to figure out the best way to use the Internet.

Currently Bloomberg terminals are considered to be the industry standard in terms of secure, instant messaging with over 320,000 clients. Although the terminals of the past have evolved into the large flat screen monitors of today, little has changed in the form of its software interface. Many would agree with Salman Ullah, a partner at the venture firm Merus Capital, which invested over $3.5 million to Symphony’s seed round, when he said “It’s like clay tablet era,” when referring to the Bloomberg terminals.

While the terminals may be secure from outside attacks, the same cannot be said from within Bloomberg’s own walls. Two years ago a Bloomberg reporter asked a Goldman Sachs executive if a partner at the bank had recently left the firm. He casually noted that the executive had not logged into his Bloomberg terminal in some time.

This led to a Bloomberg being accused of spying on Goldman Sachs through its terminals. One year later, this led to 15 of the world’s largest financial firms, which include Goldman, Bank of America and J.P. Morgan Chase, just to name a few, to acquire a secure instant messaging service called Perzo.

This was a two-step process, the consortium invested $66 million in a venture called Symphony, which in turn, acquired Perzo. In a statement at the time, Darren Cohen, global co-head of the Goldman principal-investing arm, said "Symphony responds to a pressing need across the industry for better methods of communication and collaboration."

The original company was founded by David Gurle, who has a rather interesting background in communications. Fifteen years ago he had a conversation with Bill Gates concerning a unified communications (UC) service which later was dubbed “Project Phoenix” and ultimately evolved into Microsoft Lync.

Gurle remains as CEO of Symphony with a simple plan in mind. The goal is to create an open source service that will allow people to build features that can be useful. This is something that is not possible with the Bloomberg terminals. By using this approach, Gurle hopes to create a service designed to make life easier.

Gurle made the following remarks, “I’m going to make a very bold statement. If we end up forcing you to use two different communication tools, inboxes, let’s call it, for lack of a better term, then we have failed. Then we will not have simplified your life, we will have made it more complicated.”

Needless to say, Goldman Sachs leads the pack and has already being using Symphony. So the question that remains is whether or not Symphony will lead to the fall of Bloomberg’s terminals. When a company that bases its reputation on security is caught spying on its clients, it leaves a very sour taste as they see it as a violation of their privacy.

The next question to ask is whether or not Symphony will be able to replace Bloomberg. There will be features, such as an automated personal assistant, unlimited storage and regulatory compliance. It is possible the service will be free with three levels of paid services that include under $10 for Professional Level, up to $20 for Enterprise Level and under $30 for Enterprise Plus Level.

After Bloomberg has controlled the industry for over 30 years, it will be interesting to see if Symphony will have the staying power and become direct competition. With the major financial institutions leading the way, it sounds like it is a good bet.

Edited by Maurice Nagle

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