Open Password - Donnerstag, den 4. Juli 2019

# 586

Reference Data – William Jan – Outsell – Asset Management Firms – EDI – Disruption – EU – Financial Information – Rent Vs. Own – EU – Anti-competition Laws – Exit Strategies – Analytics – Machine Learning – Back-testing – Data Ownership – Financial desktops – Hedge Funds – Refinitiv – S&P Global – Bloomberg – FactSet – Licencing Strategies - ProQuest - ProQuest One Academic - Artificial Intelligence - EBSCO - Faculty Select - Open Educational Resources - Affordable Textbooks - IEEE - Open Acess - Adavantage Business Marketing - Advantage Business Media - Elsevier - International Center for the Study of Research - Microsoft – eBooks – Maximilian Senff – Süddeutsche Zeitung – k10plus – BSZ – VZG – Syndeo - OCLC

Rent Vs. Own: The $2 Billion
Reference Data Question

By William Jan, Outsell – International Partner of Password Online

In the quest for alpha, asset management firms continue to utilize reference data to back-test their quant strategies. With appetites for reference data increasing, EDI brings an offer that could disrupt not only the reference data market but the entire data market in the EU.


Important Details


To understand how financial reference data provider Exchange Data International (EDI) is disrupting the data marketplace, one simply needs to understand the currently accepted business structure of financial data. Reference or historical data — in this case, archived financial market data, including securities symbology, past stock pricing, market indexes, and other core financial information — is commonly offered by financial information providers, including the major financial research desktops. While it is understood that ending a license subscription terminates the content feed, it is also common practice that any data consumed or used for analytics during the subscription — despite it being old data or public data that can be found elsewhere, like 10K earning filings — be “returned” to the provider upon the termination of the agreement. To be specific, “returned” in this context means erased or destroyed; the former customer usually has one year to do this, after which the provider will send in an auditor to ensure the destruction of the data.

To keep such reference data for consumption or back-testing, the former customer is usually left with two alternatives: subscribe/license the data again or pay for it. This puts former customers in an interesting predicament. To keep the data that they need for perpetual use, they would need to license the research platform indefinitely or be asked to pay a lump sum as determined by the provider to keep the data. Both are costly, particularly if the former customer has no intention of using the research platform for any other purpose moving forward.

EDI is disrupting this common practice by simply allowing its former customers to keep forever the data that they have used during the subscription. The global financial reference data provider further states that the continuation of the original common practice in the EU is potentially violating anti-competition laws, given that customers are often pressured into maintaining commercial relationships with providers, given the costly alternatives to the business terms. EDI is aiming to capture the reference data market by storm, offering the market a cost-effective exit strategy — no prenuptial agreements for a market that is married to data — while sustaining its data needs without business interruption.


Analyst Rating: Positive


Strengths and Risks. EDI has made a powerful statement to other reference data providers in the EU financial market. Its offer to allow customers to buy data rather than rent it is well-timed in a market that is increasingly driven by analytics and machine learning / AI. This is especially true given that many of these technologies require reference data for back-testing — testing algorithms for how well their predictions mapped to actual (verified) market performance.

The risk for EDI is in not being able to gain enough momentum for the market to take up its offer of data ownership over data tenancy. More specifically, major financial institutions around the world will continue to find it hard to decouple themselves from the major financial desktop providers, mostly due to the fact that they are utilizing these research desktops for other investment and trading functions beyond the use of reference data.

Recommended Actions for EDI. Where EDI could gain the most traction is in small and mid-market institutions, where firms that shy away from large numbers of financial desktop seats still need reference data. This also speaks to the smaller, quant-driven asset management firms (typically hedge funds), where the bespoke, in-house analytical platforms now only require direct data feeds, including reference data, with minimal use of common financial desktops that they feel are not yielding the level of competitive differentiation of their home-grown platforms.

Recommended Competitor Actions. EDI’s competitors in the reference data market are the big financial desktop providers, like Refinitiv, S&P Global, Bloomberg, and FactSet. The advice here is for these players to watch EDI’s development in the EU and see how far EDI is pushing its position on anti-competition violation. With regulatory action taken in favor of EDI’s business, this could potentially disrupt these players’ data monetization strategies in the EU. Any case, and subsequent ruling, in favor of EDI’s business model could weaken these providers’ leverage in securing recurring customer contracts. Financial data providers in the EU must then reevaluate their data licensing strategies and agreements with their customers, with potential concessions toward enabling reference data ownership.


Bottom Line

For the greater information, data, and analytics industry, this potential disruption in the financial data business and its resulting outcome need to be closely monitored, as this will reveal the market’s preference for data ownership versus data tenancy. For data customers (or providers looking to secure data partners) investing in AI in the EU, this case becomes even more critical. Each piece of data used to develop the learning algorithm must be used under this consideration: What would happen to all the technology investment if the data used had to be relinquished or destroyed at the request of the provider? Only by being able to answer this question and accepting the outcome will companies be ready to embrace this disruption.

Microsoft gibt eBook-Sparte auf

Man wacht auf, und kein einziges Buch
steht mehr im Regal

„Microsoft gibt die Buch-Sparte seines App-Stores auf. Den Nutzern stehen deswegen ihre digitalen Bücher bald nicht mehr zur Verfügung, sie werden einfach nicht mehr angezeigt. Was bedeutet das für das kulturelle Gedächtnis?

Man stelle sich vor: Es ist Sonntagmorgen, der Kaffee frisch aufgebrüht, man möchte den Roman, der einen in den letzten Tagen gefesselt hat, zu Ende lesen. Doch im Wohnzimmer steht kein einziges Buch mehr im Regal. Unvorstellbar? Für Kunden, die im Microsoft-Store E-Books erworben haben, wird dieser Albtraum, zumindest digital, Realität.  

Maximilian Senff, Digitale Bibliothek - Vergessene E-Books, in:

Start für K10plus

Größter Katalog für wissenschaftliche Bibliotheken in Deutschland

Das Bibliotheksservice-Zentrum Baden-Württemberg (BSZ) und die Verbundzentrale des Gemeinsamen Bibliotheksverbunds (VZG) haben den Start der gemeinsamen Verbunddatenbank K10plus bekanntgegeben. Dieser größte Bibliothekskatalog für wissenschaftliche Bibliotheken in Deutschland nutzt Syndeo von OCLC, eine Reihe von Diensten, die die Zusammenarbeit zwischen nationalen und regionalen Bibliotheken erleichtern.

Der neue Verbundkatalog K10plus vereint über 200 Millionen Bestandsnachweise gedruckter und digitaler Medien von wissenschaftlichen Bibliotheken aus zehn Bundesländern, der Stiftung Preußischer Kulturbesitz und anderen Wissenschafts-, Forschungs- und Kultureinrichtungen. Zu den Partnern gehören die Mehrzahl der deutschen staatlichen Universitäten und Hochschulen. Hinzu kommen renommierte Forschungseinrichtungen wie Leibniz-Institute, Helmholtz-Zentren und Max-Planck-Institute.

ProQuest mit erster
akademischer Plattform mit Virtual Reality und 360-Grad-Videos

Students can now immerse themselves in their studies through the power of virtual reality. ProQuest announced the launch of virtual reality (VR) and 360-degree viewing functionality for select videos on the ProQuest search platform, as well as in ProQuest One Academic and on the newly redesigned Alexander Street video interface. ProQuest is the first academic streaming video platform to offer VR and 360-degree video.

SAGE mit neuem Terminologiedinest und sozialwissenschaftlichen Thesaurus. SAGE Publishing’s new Terminology Service is a valuable tool to aid researchers in understanding and exploring key concepts. It launches with the SAGE Social Science Thesaurus, a multidisciplinary vocabulary of the most important concepts in the social sciences that combines concepts, relationships and definitions. Most of this vocabulary has been created by using semantic text mining to put structure around text content published by SAGE.

Finnen bringen AI und Roboterautomatisierung nach UK. Digital Workforce, a provider of Intelligent Process Automation (IPA) services, has  launched in the UK. The Finnish company brings together both RPA and Artificial Intelligence to offer a broad range of automation services and solutions to businesses, all aimed at enabling purposeful work. The UK market is key for Digital Workforce as it continues its rapid growth and brings the future of work to the UK.

EBSCO mit Faculty Select für preisgünstige Fachbücher. EBSCO Information Services announces the release of EBSCO Faculty Select, a single interface for library staff and institutional faculty. Faculty Select makes it easy for faculty to explore Open Educational Resources (OER) and purchasable DRM-free e-books to support their courses. The interface provides affordable course options that drive textbook affordability, access and usability for faculty and students alike.

IEEE startet 14 Open- Access-Zeitchriften.  IEEE, the technical professional organization dedicated to advancing technology for humanity, announced it is launching 14 new gold fully open access journals spanning a wide range of technologies including telecommunications, computing, biomedical engineering, automotive technology, signal processing, industry applications, power and energy and more. The new journals will begin accepting submissions in the fall of 2019 and publish their first articles in early 2020.

Nach 13 Jahren und vergeblichem Rebranding abruptes Ende. Advantage Business Marketing—the B2B media company formerly known as Advantage Business Media until rebranding in a last-ditch pivot to marketing services a year ago—abruptly shut its doors this week, notifying its more than 50 employees that they were out of a job, effective immediately, and would not be receiving severance packages, according to multiple sources.

Elsevier gründet International Center for the Study of Research.  A new Center tasked with examining and advancing the evaluation of research across all fields of knowledge production has been launched by Elsevier. The International Center for the Study of Research (ICSR) will work closely with the research community to review and develop the use of qualitative and quantitative metrics of research evaluation to create a more transparent and robust approach to research assessment.


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