This post has been updated.
The Bloomberg Terminal has been a staple of the financial world for decades, growing into a multi-billion dollar operation with 325,000 users. But Symphony Communications, a messaging platform backed by some of the biggest financial institutions in the world, is planning to cut into core pieces of its business when it launches today (Sept. 15).
Subscribers to the Bloomberg Terminal get access to a massive database of financial information and real-time financial news. However, its chat function might be the most valuable. The New York Times wrote in a recent profile of numerous competitors going after Bloomberg that “at Goldman, more than half of the people who have Bloomberg terminals use them primarily for chat and other simple functions.”
Symphony is going right after that audience with an open-source messaging service that developers can customize. That’s a big departure from Bloomberg’s model, which doesn’t allow the same kind of modifications on its closed platform. And it’s far cheaper—Symphony CEO David Gurle said in an April 2014 interview that the price for each user would be around $30 per month. The company told Quartz that Symphony is currently free for individuals and business with less than 50 users. For business and enterprise customers with more than 50 users, the price for the service is $15 per user, per month.
At a cost of more than $20,000 per year per terminal, Bloomberg is an extremely expensive system for users mostly interested in its chat features.
Beyond its dollar-and-cents cost, users have begun questioning the risks of using a terminal that also supports a massive news-gathering operation. Soon after Bloomberg reporters were caught spying on terminal customers, a group led by Goldman Sachs, and including BlackRock, Morgan Stanley, JP Morgan Chase, Wells Fargo, and others purchased a company called Perzo, which became Symphony. The consortium initially invested $66 million into the company, and Symphony may raise more money at a $1 billion valuation.
Symphony is looking to beef up its offering beyond messaging. The Financial Times reported on Sunday that Symphony has reached a deal with Dow Jones to provide news content to the Symphony platform. Articles from the Wall Street Journal and the Dow Jones newswire would be made available for Symphony users.
Just ahead of the launch, the New York Department of Financial Services (NYDFS) announced it reached agreements with Goldman Sachs, Deutsche Bank, Credit Suisse, and Bank of New York Mellon to make sure record-keeping regulations were properly met when using Symphony. The regulatory body felt that preserving chat transcripts for financial institutions was essential after events like the Libor scandal. The agreement stated that Symphony would keep chat transcripts for seven years.
The compliance agreement will help financial institutions avoid regulatory headaches, and the content deal should increase the value they get out of Symphony. But time will tell if it’s enough to supplant Bloomberg Terminal’s dominance on Wall Street.
Update [Sept. 15]: This post has been updated with current pricing for Symphony.