Bloomberg support is excellent but I disagree it is as significant in decision making as some commentators appear to imply. Many shops will have internal support able to handle the majority of first line questions, then Bloomberg support is relied on more for edge cases or tier 2 support. Especially at the senior (decision makers) level they may have someone contact Bloomberg on their behalf; so the degree to which support is better is not punishing competition.
Tangential to 5) there are numerous financial services firms of various scales, and even the mid-sized and small shops (for whom $20k/yr + exchange fees is not a write-off amount) disproportionately use Bloomberg. I think squigs25 identifies some of these reasons, I would highlight and add the following:
1) Network effect - Even if you build a better mousetrap capital markets are highly connected. On the sell side we may adapt our technology choices to our most significant clients on the buy-side to provide as seamless a service as possible to clients. Bloomberg messenger has been mentioned by many people and that is a huge factor in our decision making, but simpler things contribute too:
1.a) Consistency - If my client calls we're discussing a trade or security it is a significant advantage in seeing the same thing they see. Be it VWAP on the day to 6dp, the order we're looking at published research, recent trades, if we're looking at the same thing the service I can provide is improved. My service and execution is how I differentiate myself. This relies on us using the same system
1.b) Connectivity - I can have a Bloomberg EMSX client able to send trades to me in ~5 minutes with no exaggeration. Similarly if they want to receive our IOIs or TA (basically advertising from the sell-side to the buy-side) and have an acronym - the connection between the systems already exists and I can find and target your specific acronym in under 5 minutes.
B) Incentives - Smaller shops are, in my experience, less likely to mandate technology to sales/trading/research. It is also unlikely that my personal technology expenses are tied to my comp. Even if cost is significant to the firm it may not be to the individual who have influence
C) Inertia - Capital Markets are not Technology firms. Technology exists to facilitate a job and if it does that well enough there is scant appetite for change. No one wants to re-learn tools that have been familiar for years. They want to even less when that is fundamentally not seen as part of the job, it's a facilitator and should be easy and convenient as a result.
Reliability cannot be emphasized enough. The uptime % we expect (and Bloomberg delivers) is exceptionally high during and around market hours.
Tangential to 5) there are numerous financial services firms of various scales, and even the mid-sized and small shops (for whom $20k/yr + exchange fees is not a write-off amount) disproportionately use Bloomberg. I think squigs25 identifies some of these reasons, I would highlight and add the following:
1) Network effect - Even if you build a better mousetrap capital markets are highly connected. On the sell side we may adapt our technology choices to our most significant clients on the buy-side to provide as seamless a service as possible to clients. Bloomberg messenger has been mentioned by many people and that is a huge factor in our decision making, but simpler things contribute too:
1.a) Consistency - If my client calls we're discussing a trade or security it is a significant advantage in seeing the same thing they see. Be it VWAP on the day to 6dp, the order we're looking at published research, recent trades, if we're looking at the same thing the service I can provide is improved. My service and execution is how I differentiate myself. This relies on us using the same system
1.b) Connectivity - I can have a Bloomberg EMSX client able to send trades to me in ~5 minutes with no exaggeration. Similarly if they want to receive our IOIs or TA (basically advertising from the sell-side to the buy-side) and have an acronym - the connection between the systems already exists and I can find and target your specific acronym in under 5 minutes.
B) Incentives - Smaller shops are, in my experience, less likely to mandate technology to sales/trading/research. It is also unlikely that my personal technology expenses are tied to my comp. Even if cost is significant to the firm it may not be to the individual who have influence
C) Inertia - Capital Markets are not Technology firms. Technology exists to facilitate a job and if it does that well enough there is scant appetite for change. No one wants to re-learn tools that have been familiar for years. They want to even less when that is fundamentally not seen as part of the job, it's a facilitator and should be easy and convenient as a result.
Reliability cannot be emphasized enough. The uptime % we expect (and Bloomberg delivers) is exceptionally high during and around market hours.
(source: work on sell-side trading desks)