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Convergence Conundrum: Will XML
Standards Increase or Decrease Content Value? |
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19 April 2004 |
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At the SIIA's recent Issue Brief session
on "The
Convergence of Market Data and Information Publishing"
a broad array of financial content and technology experts
made it clear that XML standards are reshaping not only
content delivery but how companies need to distinguish
themselves in creating content value in major markets such
as finance. It seems that XML's ultimate impact is not in
commoditizing content but in forcing providers in the value
chain to concentrate on what really makes a difference in
the eyes of people who need to make money by using their
content products and services. For those who can attune
their operations via XML to the needs of a marketplace that
is real-time in changing its focus and requirements, the
rewards will be great. |
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Time was when real-time delivery
of financial content was a real black art, using the cutting
edge of computer technology and telecommunications equipment to
give financial companies the edge in highly competitive
markets. Delivery efficiency is still highly important for
real-time quote feeds, but the real advances in financial
content delivery today are in making wider arrays of content
work together in supporting financial decision making and trade
processing. The introduction of numerous content delivery
standards based on eXtensible Markup Language (XML)
over the past few years has accelerated this trend, making it
far easier to integrate normalized content in real-time and
near real-time from both the financial industry and other
sources.. The key word for describing this trend is
convergence, the merging of various sub-disciplines of content
creation and delivery into a single fabric of information and
experiences provided via common infrastructure, a unified
XML-based content
aether, if you will. This unprecedented freedom to mix and
match content sources at will would seem to spell doom for many
"middle men" struggling with content commoditization.
Or does it? At the SIIA's recent Issue
Brief session on "The
Convergence of Market Data and Information Publishing"
moderated by SIIA President Ken Wasch a
broad array of financial content and technology experts made it
clear that although XML standards are reshaping many aspects of
content delivery, the question of convergence's impact is open
to debate. Market Data Definition Language (MDDL)
makes it easy to mix and match quotes from many sources, for
example, placing more pressure on vendors to provide more value
added capabilities, but already there are hundreds that do just
that. The eXtensible Business Reporting Language (XBRL)
adopted by hundreds of vendors and institutions to standardize
the delivery of financial reporting provides enormous
improvements in content delivery efficiency, but still leaves
open the question of how to integrate those results with other
kinds of content in a reliable and predictable manner. Just
because content can flow from point to point more easily thanks
to these and other XML-based standards doesn't mean that
content synergy is going to pop out of the woodwork
instantaneously. What is the real impact of converging content
delivery standards on the content industry? The panelists at
the SIIA Issue Brief session offered several points to
consider:
- Content can dress for success -
inside and out. Jeff Simon, Senior Director of
Information Technology at
Standard & Poor's Credit Market Services, pointed out
that one of the key advantages for XML-based content
processing is its impact on internal content production
processes. Jeff sees XML content standards making it easier
to assemble new content products that provide incremental
value on numerous levels, akin to providing just cotton or
cloth or fully fabricated clothing in supply chain
management. David Brukman, VP of Technology for IDC's
Comstock division, similarly noted that XML's standard
formats give content vendors additional reselling
opportunities at multiple layers of the industry.
Standardization, then, tends to force content companies to
develop more innovative approaches to content marketing that
create value on more layers in more venues than ever before.
- Content intelligence takes center
stage. Liv Watson, Vice President of XBRL strategies for
EDGAR
Online, works to distinguish content based largely on
public information sources delivered in XBRL format by making
EDGAR Online the most intelligent and usable version of this
information available. Providing the highest quality taxonomy
for categorizing business content and defining the fields of
content used in XBRL with a consistent data dictionary
applications is key to this effort, which makes it easy to
use XBRL-based content in applications such as Microsoft
Office. EDGAR Online is developing add-ons for the MS Office
environment that will, for example, allow one to view a data
definition for an Excel spreadsheet cell containing XBRL-defined
content with a click of a mouse button. Working with
commoditized, standardized content in the shadow of
technology giants would seem to be a tricky feat, but when
you're the expert in content quality and usage there's a fair
amount of room for defining success.
- User requirements become key.
David Spenhoff, Vice President of Marketing for
Inxight
Software, Inc. works with content via their sophisticated
content organization and visualization tools to create order
out of the content chaos that converges at user desktops.
From his perspective convergence offers the hope that content
requirements can be addressed from the perspective of
addressing real problem-solving requirements rather than
trying to view content delivery as a solution in and of
itself. As costs move from content acquisition, storage and
retrieval towards discovering its most useful context in
light of specific, real-time needs, those companies that are
best at delivering to spec on those discovery needs are going
to emerge victorious. As Dale Richards, CEO of
Sungard
Data Systems, put it, "The higher the technological
value-add, the better." Companies that take a neutral
approach to the sourcing of data sets and concentrate on
meeting the user requirements for content value are the most
likely winners in the convergence game.
- Monetization models may change. James Hartley,
MDDL Evangelist for the
SIIA,
noted that embedded in MDDL and other XML-based content
standards are the equivalent of "bar codes" found on consumer
products, identifiers that make it easy to use reference data
that can link XML content to other content sources - and to
transaction processing. Strong improvements in reference data
are making these links much more powerful and consistent
tools, providing not only more value in end-user applications
but as well opening up the door to highly auditable ways of
tracing how people make money with content under what
circumstances. While the initial benefactors of these links
are likely those responsible for ensuring compliance with
corporate governance and market regulations, look for both
financial companies and content companies to begin to
recognize that being able to quantify the value of content
used to underwrite individual transactions to create new
models for monetizing content, models that may prove to be
highly lucrative for those that know best how to respond to
real-time content discovery requirements.
Convergence via XML standards is a transforming factor in
the content marketplace, but its net effect is to free up
investment from costly infrastructure development and
maintenance to create new levels of content value that are much
more in line with the highly competitive and dynamic needs of
marketplaces that can change their focus in an instant. This
spells huge opportunities for companies that can respond to
these real-time content development needs - and huge problems
for those that insist on monetizing those opportunities based
on the premise that basic delivery is a tough nut to crack.
Convergence giveth, and convergence taketh away...
-
John Blossom
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