Thomson/Wombat Tie Up For Low Latency Datafeeds

News Wire

From A-Team Group’s Market Data Insight, February 2007: Thomson Financial has forged an agreement with Wombat Financial Software to embed Wombat’s low latency market data delivery capability within the real-time Thomson Data Feed (TDF). The deal gives Thomson a jumpstart in the area of direct exchange feed delivery and handling, and lends credence to Thomson’s plan to offer enterprise distribution of its data.

Thomson is promising further announcements soon. It says, however, that the arrangement will give Thomson clients a low-latency option for receiving quotes from more than 160 exchanges, as well as order book data, bond pricing from the Thomson Tradeweb platform, the Thomson Financial News and Thomson AFX newswire services, and contributed fixed-income data.

Furthermore, as part of the deal, Thomson is adopting Wombat’s single application programming interface and data model for its feed (heretofore, its real-time feeds have been derived from former ILX Systems and Primark/ICV GlobalTopic services).

The combination with Wombat, says Emilio Mercado, vice president and commercial manager, data feeds, at Thomson, will allow it to offer customers multiple deployment options, ranging from on-site servers through hosted and co-location services. The new TDF API will allow the feed to be integrated with “the most commonly deployed market data platforms,” presumably meaning Reuters Market Data System (RMDS) and Wombat’s own Wombat Platform.

At Thomson, the deal has been spearheaded by Mercado, who operates as part of the team headed by Matthew Burkley, the former strategy head who, as president of enterprise solutions, has been charged with responsibility for data feeds and news services. The word ‘enterprise’ in Burkley’s title is in essence key to Thomson’s objective in tying up with Wombat.

According to Burkley, “We are focused on the future; as a result, the embedding of the Wombat technology is one of the key pieces to providing an enterprise data feed solution to our clients – one which positions them to take advantage of the increasing performance demands of the market.”

As such, Thomson moves into the space currently dominated by Reuters and its various data feed and platform infrastructure offerings, and targeted by the likes of Interactive Data with its Comstock Plusfeed, and Bloomberg with BPipe.

Thomson believes that adding low latency delivery rounds out its array of delivery options for clients. The new arrangement gives Thomson a matrix of possibilities, in terms of onsite or hosted delivery, and access to various degrees of data integration; for example, clients can opt for support of consolidated or exchange specific order book displays.

For its part, Thomson believes the various options will appeal to different client types. The top-tier version of the feed – with sub-5-millisecond latency – is targeted at algorithmic trading applications. The middle-tier version – with sub-50-millisecond delivery – will be pitched to buy-side trading, order management systems and tick capture engines. And the third option – at 150 milliseconds – will be targeted at client portals, intranets, compliance and back-office applications.

Thomson believes the global data feed marketplace is probably worth between $200 million and $400 million annually, and is growing fast. It reckons the overall real-time market data business is worth up to $1.2 billion annually.

The deal puts an end to speculation of an acquisition of Wombat by Thomson. For Wombat, the arrangement would appear to give it the kind of financial clout that could allow it to build on its growing success. The company has been winning direct exchange feed deals regularly over the past year or two, and Thomson’s backing could help it make the next step toward more enterprise-based client implementations.

As we’ve pointed out in the past, Wombat will need to protect its neutrality, which has surely been key to at least some of its recent successes. It hasn’t gone unnoticed that the company has proceeded with integrations of competitive feed services, including Interactive Data’s Plusfeed and Bloomberg’s B-Pipe and (pending) BPOD.