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While he has so far seemed unstoppable, Bloomberg may be coming into a vulnerable period. The financial-data industry, which grew at the breathtaking rate of 20% a year during the bullish 1980s, has slowed down. Since the stock- market minicrash in October 1989, demand for computerized business data has grown a tame 5%. A subsequent shakeout has already claimed some weaker firms, such as Bunker Ramo, GTE Financial and Pont Systems, through mergers and failures. To remain viable, survivors must invest heavily in the next generation of information technology. That could spell trouble for small outfits like Bloomberg, says Margaret Fischer, head of electronic-information , practices at the market-research firm Link Resources. "The survivors will be those with deep pockets, critical mass and strong stomachs."
Bloomberg may need all three to prevail. Customers are starting to move away from specialized terminals, like the Bloomberg, that cannot be linked to standard PCs or run off-the-shelf software. Some large vendors have already made the investment to switch to "open" systems. Knight-Ridder has developed a PC-based service using Microsoft's popular Windows program. Reuters is teaming up with PC-maker Intel. And EJV Partners, the joint venture of six Wall Street firms, is building a system designed to run on personal computers. But Bloomberg stubbornly rejects this approach. He fears that he would lose his unique edge if he abandoned the Bloomberg. However, says Robert Russel, senior vice president of marketing at Reuters, "unless Bloomberg opens up, he'll be an island alone against the rest of the industry."
Still, the man for whom the machine is named isn't worried about EJV, Dow Jones or Reuters. They can be outfoxed, he insists. While they are spending heavily to develop futuristic products that incorporate audio with full-motion video, for instance, he plans to introduce this year a lower-cost system using sound and still images. "What frightens me," he says, "is the little guy in the garage I don't even know about right now." In other words, the only thing that scares Bloomberg is the next Michael Bloomberg.