The inside track on Bloomberg
Does Bloomberg see itself as a technology, media, data or information company? All of the above, says president and CEO Dan Doctoroff, writes GORDON SMITH
HOW DO YOU define a company that provides real-time information for a specific market niche, through a system where its customers exchange 200 million proprietary email messages each week and average between 12 million and 15 million chats a day?
When technology is so central to what that company does – and how it does it – at what point do you start referring to it as such?
“People ask us all the time whether we are technology company, a media company, a data company, are we an information company? And in many respects we’re all of the above,” says Bloomberg’s president and CEO Dan Doctoroff on a recent visit to Dublin.
Since the company began trading almost three decades ago – several lifetimes in technology terms – it has been delivering market information and a host of financial tools, called the Bloomberg Professional service, to a growing subscriber base.
Once, the Bloomberg terminal was a physical piece of hardware but keeping in step with technology trends, the means of delivery has shifted.
Today, subscribers can access the mix of market information, business news and financial analysis over a range of devices including BlackBerry, iPad and Android smartphones.
“We’ve been a big data company, a cloud company . . . We have been offering managed services from our data centres to our customers, since the beginning of Bloomberg, before it was fashionable to call it cloud, or even a managed service,” says Doctoroff.
On the subject of labels, he recalls a conversation last year with LinkedIn’s CEO Jeff Weiner who dubbed Bloomberg “the first profitable social network”.
Doctoroff says: “Over our system with those messages, with those chats, people exchange market information or price talk. They do trades with one another, they look at the same news – in effect, creating a community.”
The company’s footprint has also grown to include a news service spanning multiple media channels that includes print since the acquisition of BusinessWeek in 2009.
The media products have tens of millions of unique viewers every week. Doctoroff says this is part of a strategy that underpins the company’s professional offerings.
Bloomberg Professional remains the core product. Even allowing for the financial crisis, on Doctoroff’s watch the client base has grown from 268,000 at the end of 2007 to 310,000 by mid-2012.
One area earmarked for expansion is enterprise data management (EDM). Explaining the rationale, Doctoroff says: “Everybody spends all sorts of time, money and other resources putting this information together and then distributing it . . . Nobody does it well. It is not an activity that makes anybody money – it’s just something you have to do in order to operate your business.”
At a time when information volumes are growing and regulatory scrutiny is increasing, there is a clear business opportunity in addressing a significant technical challenge.
“So the insight is, bring that data in to a central party one time, let us organise the data, let us develop the tools so that you can pick and choose what data you need, when and for what, saving you lots of money and enabling you the client to focus on those activities where you truly add value.”
To meet its objectives in EDM, Bloomberg decided acquisition was the best route to achieve traction quickly and it choose the Dublin software house PolarLake. When the acquisition was announced in May, the Irish company had 47 employees. By the end of the year, Doctoroff expects that number to reach 70.
“We see PolarLake as an operating business but it is also an RD unit. PolarLake will become a centre of excellence in terms of data management and we will create new jobs.”
Doctoroff admits to being “late to the party” as far as considering Ireland as a base of operations, but it was PolarLake’s technical capability and a “cultural fit” that won the argument ahead of other contenders.
“We looked at probably 10 companies. PolarLake was the one that we thought had the ‘special sauce’ in terms of a unique ability to manage data. It’s at the core of our enterprise data management offering,” he says.
Bloomberg has not disclosed the purchase price for PolarLake but Doctoroff says what it paid is “dwarfed by the potential”. The company estimates that the size of the market among its own clients is close to $2 billion.
Bloomberg’s own spend on technology is “not insignificant” – Doctoroff doesn’t reveal how much – but he confirms the company’s single biggest expense is staff, not systems.
This summer, it unveiled Bloomberg Industries, a dashboard tool for industry watchers such as investment bankers, portfolio managers or analysts. It carries up-to-the-minute profiles of 125 different sectors, which can be viewed by a range of categories such as company or region.
According to Doctoroff, customers weren’t even aware that this breadth of industry-specific information could be gathered together and presented on a single screen. “This you won’t find anywhere else because nobody asked for it,” he says.
Doctoroff says the concept emerged from Bloomberg marrying the knowledge of its customer base with what technology can deliver.
This approach to product development immediately invites comparisons with another technology company that rejects market research in favour of a singular vision. Doctoroff doesn’t reject the association with Apple.
“I think what Steve Jobs would say is, he believed he did intuitively understand what the consumer wanted, and he delivered it. Never did they imagine what they could have, but that’s what he did. I would argue that what we do is not fundamentally different.”
Doctoroff visited Dublin on September 11th, a date with added significance for him because, in his own words, the events of that day led him directly to the role he now occupies.
When Michael Bloomberg took up the mayoral reins in New York following the World Trade Center attacks, he asked Doctoroff to swap the private sector for public office as deputy mayor. Doctoroff subsequently joined Bloomberg the company in 2008 – first as president, then taking the additional duties of CEO in 2011.
The intervening time has allowed him to settle on a definition for the Bloomberg business. “The way I think about us is, we are a knowledge company. We are in business to give people the information – news, data, analytics, analysis – that they need to make smart decisions. And so, we don’t think of ourselves as a technology company.
“We think of ourselves as a company that employs technology to get people to the place where they can make those smart decisions, where they can do things more efficiently. But, it’s not the end in and of itself: it’s the means to getting there.”