Exchanges, vendors reinvent inventory management platforms to enable sales.

Data sources are realizing they can leverage end-user inventory ‘r management tools to streamline their side of the data sales and licensing process.

Founded by former NYSE data professionals, the vendor’s platform focuses heavily on the licensing aspect of its clients’ sales activities, including vendor approvals, reporting, billing and compliance, reducing or eliminating any ambiguity around what data a client is licensed to use, for what purpose, which version of a contract they are on, and synching with billing and customer-relationship management systems.

The reason these platforms are becoming important for data providers is that new data sources and different license types are creating more complexity around data sales and billing.
“It seems that new data provider entrants see data commercialization strategies as binary—charge or don’t charge—but the reality is there are myriad permutations of licensing and subscription models,” Schaedel says. The varied models are meant to ensure flexibility and elasticity with use cases which can rationalize the cost … [and] the appropriate models vary by type of data assets and use cases.”

For example, he says, commercial distribution must be differentiated from reference usage, while OTC price fixings and composite prices should be treated—and licensed—differently from tradable dealer prices.

“Both types of prices are used differently and require different commercial strategies. So, the scale of license types that can be supported ensures the best possible fit for use cases,” Schaedel adds. “To grow business, data providers need to manage a diverse array of licenses/use cases to penetrate the broadest market possible requiring automation and tools. That’s where we come in.”

The NYSE connection

But while DataBP has grown rapidly in the space of a few years, it’s not the only game in town. In 2014, around the same time that its founders were setting up the business, their former employer was in the process of separating from the Euronext group of exchanges, following the acquisition of NYSE Euronext by Intercontinental Exchange. One upshot of that spin-out was that Euronext needed its own reporting system, having previously used a NYSE¬built system.

The exchange contacted vendors about building a new system to manage client contract licensing, tailored to its data products and policies, but was approached by Dutch vendor Screen Consultants (now part of TRG Screen, after merging with rival The Roberts Group), developer of the InfoMatch inventory management platform. Euronext hadn’t considered these types of vendors because they were focused on the inventory and cost management needs of end-user firms. However, the exchange gave Screen its requirements, and concluded that the vendor could deliver exactly what it needed.

“We spun off from NYSE in 2014, and were up and running on InfoMatch at the beginning of 2015,” says Michael Hodgson, head of real-time data at Euronext. “That was the core. Then in 2018, we rolled out our reporting portal, then more recently we rolled out our client portal where they can manage their agreements and services. They can browse and buy data via the portal. If a client wants, they can be completely self-service.”

This speeds up a client’s ability to order and start using data—and, once the exchange relocates its primary co-location datacenter from Basildon, UK, to Bergamo, Italy, clients will also be able to use the portal to order and deploy all data-related services, including connectivity and physical hardware in its datacenters.

“Before this, there was a certain amount of manual administration and checks on our side … and a lot of that has now gone away. So, instead of a conversation with a client being about whether they’ve ticked all the right boxes, that conversation becomes about how that client is using the data, and how many people are using it,” Hodgson says.

The work completed so far has “enabled us to get a full picture of everything a client does, and to follow all the data flows outside our organization to clients,” Hodgson says, adding that the project has benefited the exchange and user firms alike. “Clients don’t want to spend their time bogged down in billing issues. With this, we can make everything quicker for them, so they can spend their time on other things.”

Further additions planned for the platform this year include creating a usage questionnaire in the portal, based on an audit tool built with TRG Screen’s Axon Financial Systems business last year, and automating the process by which the exchange approves data vendors to provide its data to specific clients. This first effort would bring greater understanding to the audit process, allowing it to move faster, and potentially allowing clients to use that audit module to input and report their usage, Hodgson adds. The second effort would streamline and automate the currently manual processes of requesting access to data and receiving approval to distribute data to clients.

Chris Hutton, head of content and exchanges at TRG Screen (formerly CEO of Axon prior to its acquisition by TRG), says this makes data administration functions easier for both the exchange and its data subscribers.

Ironically, Euronext’s ownership change isn’t the only NYSE connection: Hutton and his Axon co-founders Aaron Garforth and Steve Cowler all previously worked at NYSE in data management, policies and licensing, and reporting. So even though the original deal was signed with Screen Consultants, the acquisitions of both Screen and Axon by TRG has put Hutton’s team back on familiar turf.

TRG Screen built Euronexrs platform with significant input from the exchange, which Hutton says has helped shape its product roadmap for the benefit of other clients, adding that the vendor is free to sell the technology to other exchanges. Indeed, he says data vendors also use TRG Screen’s technology to manage licenses, including Ion Group’s Fidessa business and Web Financial, while several other unnamed exchanges are already using the platform in a similar way to Euronext, for contract management and reconciling invoices.

And as use cases among exchanges and vendors grow, the vendor continuously adds more functionality to the platform. For example, as self-certification becomes more important to clients, TRG has developed a self-certification questionnaire for clients, which helps users identify the best products and license models for their needs, guided through the process by the interface itself. And for the front-end interface to simplify complex workflows, more work constantly needs to be done on the back end.

Room for more in the pool

Any efforts by existing providers to expand their reach into new areas could create opportunities for new players to encroach on their turf, such as Vendex Solutions, whose suite of data management tools include inventory management capabilities; and startup inventory tracking and cost management platform vendor Crizit.

Ethan Shen, CEO of Crizit—which currently monitors Bloomberg enterprise data licenses and data from the vendor’s B-Pipe datafeed, and is expanding its Periscope platform to cover enterprise licenses from Refinitiv as well—says demand is not only being driven by consolidation among established providers, but also by demand for more granular details about what firms and individual business areas are spending on data.

“The starting point is often that a client has received a bill and is apportioning the percentage split of costs between different departments. But nowadays, people no longer accept that—business units are pushing back on being allocated flat overhead costs,” and are instead insisting that data departments clearly demonstrate exactly what costs they incurred, and what they are responsible for paying, Shen says.

With fee compression, margin pressure and other factors impacting all business divisions, departments are in constant competition for resources, and can’t afford to subsidize the data costs of other business lines. It’s not just a matter of slicing the pie differently, but slicing it fairly, he adds.