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Goldman leads Wall Street to open-source Bloomberg alternative

  • Wall Street firms led by Goldman Sachs (NYSE:GS) are closing in on a deal to purchase a stake in chat and instant messaging start-up Perzo as an alternative to Bloomberg's similar application, Reuters reports.
  • Bloomberg has dominated Wall Street for years, but banks have been looking for a substitute as sluggish trading volumes and higher regulations weigh on revenues. Bloomberg's trading and news terminal costs about $20,000 a year, while Perzo's applications are open-source and free. Bloomberg customers must also buy an entire terminal, and cannot just buy the messaging system and adapt it.
  • Several other banks and asset managers have received term sheets for the Perzo deal and have recently signed non-disclosure agreements including Morgan Stanley (NYSE:MS), JPMorgan (NYSE:JPM), Bank of America (NYSE:BAC), Deutsche Bank (NYSE:DB), HSBC (NYSE:HSBC), and BlackRock (NYSE:BLK).
  • Goldman has been looking at alternatives to Bloomberg's messaging program for years, and launched a project internally called "Babel" in early 2013 to develop a competitor.
Comments (11)
  • devlau20
    , contributor
    Comments (163) | Send Message
     
    Are they missing security and terrorist tampering & infiltration possibilities by operating with Pergo on a free & open system to save pocket change?
    3 Aug 2014, 05:29 PM Reply Like
  • SRhia
    , contributor
    Comments (2) | Send Message
     
    This is not pocket change. Imagine $20,000 per user x 500 users (and that's VERY VERY low count for a company like GS, even just for the NY Office).
    3 Aug 2014, 08:53 PM Reply Like
  • FATUGLY
    , contributor
    Comments (44) | Send Message
     
    The $20,000 per year terminal enables the trader/user to bring in profits upward of a million dollars per year. Yes,I would say $20,000 per year is pocket change.
    3 Aug 2014, 11:18 PM Reply Like
  • yv204
    , contributor
    Comments (174) | Send Message
     
    For a company the size of GS, it is indeed pocket change even if the real count of Bloomberg accounts in NYC is probably more like 2,000. A fixed income trading desk of five people is easily expected to bring in more than $500 mil in profits every year.

     

    Whatever open source terminal the company decides to install, the system by definition would have to be able to interface with Bloomberg messaging, incorporate all of its major features, use similar shortcuts, and look more or less the same as a Bloomberg system. I could believe that Goldman is making this switch for legal reasons - access rights to the system, controlling how long messages stay stored, owning the storage servers, etc. Having seen first hand what trading desks spend money on for a slimmest potential edge, this is not about trading costs.
    4 Aug 2014, 11:40 AM Reply Like
  • devlau20
    , contributor
    Comments (163) | Send Message
     
    That's $10M for the New York office….still a pittance for the potential risk taken. There are dozens of GS brokers who combined make more in their annual bonuses.
    3 Aug 2014, 11:12 PM Reply Like
  • Rubicon Associates
    , contributor
    Comments (1823) | Send Message
     
    Bloomberg is far more than chat. Chat is a feature, but nothing more. $20k per year isn't a luxury, it's a necessity. If you are in the markets, you are on Bloomberg (sorry Thomson)
    4 Aug 2014, 12:15 AM Reply Like
  • 808Amigo
    , contributor
    Comments (320) | Send Message
     
    Babel??? As in Tower of Babel??? Who names these things?
    4 Aug 2014, 03:27 AM Reply Like
  • JohnBinTN
    , contributor
    Comments (3881) | Send Message
     
    Probably Babel, as in Babel Fish.
    4 Aug 2014, 07:31 AM Reply Like
  • 808Amigo
    , contributor
    Comments (320) | Send Message
     
    The language translator, huh... Well, I'm learning everyday. Thanks, John.
    4 Aug 2014, 03:34 PM Reply Like
  • vikramnjnjjdjnd
    , contributor
    Comments (715) | Send Message
     
    I should of became a banker!
    4 Aug 2014, 11:50 AM Reply Like
  • yv204
    , contributor
    Comments (174) | Send Message
     
    For that, you'd have to learn to spell first!
    5 Aug 2014, 03:00 PM Reply Like
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