Bloomberg’s terminal business has been caught up in a bit of a scandal this week (it does seem to be a week for doing that type of thing). Numerous stories indicate the company has been passing around terminal user information to the company’s sales staff and news reporters; meaning that what should have been confidential usage information, maintained only for “operational purposes”, has been less than confidential within the walls of Bloomberg. While there has been a lot of near hysteria about this, particularly with many of the larger banks, the reality is that the data that was accessible was pretty limited and in reality, fairly innocuous (things like when a user logged on, any help desk messages that were sent, info about what areas of the terminal were accessed). Nonetheless, for customers of the system – which includes virtually every financial and commodity trading shop of any size – this should be viewed as a serious breach of confidence, not to mention, a breach of contract.
Assuming Bloomberg cleans up their act and securely locks down user information going forward, one still has to wonder about the impact. Bloomberg has definitely carved out a leading position in providing pricing and market data and news across the global financial and commodities markets, despite the fact that much of the capabilities they provide could be found in other, less costly systems (a single terminal will run you about $20k a year). One of the advantages they’ve had is that they have been considered the safe choice – nobody would get in trouble for signing up for a Bloomberg terminal. Now however, with their reputation tarnished, the decision to spend $20K versus potentially less half that for competing functionality becomes a much more marginal decision for many.