I like to invest in startup companies that provide software and data services to the wall street world. I've had a lot of success in deals like Alacra, TheStreet.com, and Multex, which was sold earlier this year to Reuters.
One of the reasons that Reuters bought Multex was they needed Multex's data to feed a new product called Retuers Knowledge. Reuters Knowledge is a desktop application that will allow investment bankers and research analysts to get tons of information on public companies quickly and easily.
Last night, Reuters had a launch party for Reuters Knowledge, which they kindly invited me to. I have to say the Reuters Knowledge product is very slick. The user interface is excellent. It's intuitive, easy to learn and use, and there is a ton of data available on public companies. I can't compare it to Thomson ONE Banker which is the other major investment banking deskto product on the market today because i haven't seen the Thomson product. It also competes to some degree with CapIQ, which does not have the comprehensive data that Reuters Knowledge and Thomson ONE has. But CapIQ has some innovative features like a networking tool that's really useful and also has private company data.
But all that said, I've got some issues with Reuters Knowlege. Here's what i think they got wrong;
1 - its too expensive. They want $700/month per desktop. That's a ton of money when this information is available in other places and many of the banks have integrated a lot of data onto their intranets. I have to wonder if the dollars/desktop model is gone for good with the web and corparate intranets.
2 - its a desktop application. who wants to install and maintain desktop applications? its a total pain. its costly. and there isn't much benefit to having a desktop app. Reuters claims that they need a thin client to provide some of the really nifty charting stuff. but BigCharts does most, if not all, of that via the web. i would think Java would work if they really need a client.
3 - its missing private company data. the fact is that private companies matter - a lot. if you can't tell an investment banker or research analyst what's happening in the entire market, including the private companies, they are still going to have to go elsewhere to finish their work. and the whole point of this product is to put all the information in one place. so that's a big deal. and the real irony is that Reuters used to own a good private company database called Venture One. For some reason, that i can't figure out, they sold that to Wicks. they'll probably have to buy it back now.
So in summary, i think the battle for the desktops of investment bankers and research analysts has been joined. But i have to wonder if they are fighting the wrong war.