1998 In Review: Reuters Revamps Trading Businesses

LONDON--With the inevitable saturation of the worldwide trading systems marketplace, Reuters, the owner of Tibco, was compelled to rethink its trading and information products strategies. As the leading provider to global trading rooms, Reuters captured several important headlines in 1998 when rumours about a pending reorganization came true.

Serving as a harbinger of things to come, Reuters's corporate reshaping will pave the way for the integration of the distinctly different environments of Reuters Triarch SSL and Tibco's The Information Bus (TIB). It also puts the business organizations in support of these technologies on notice that unification is coming--like it or not. With 1999 already earmarked as a transitional year, Reuters will be working hard to make it a smooth one--as many bumps as possible will be avoided.

Although January 1 of this year was set as the start date, the company embarked upon its reorganization this past summer with the intent of increasing across-the-board profitability and using capital more efficiently. It is also thought that top management is moving into a broader, company-planning role and delegating more of the daily running of the company to managers. The full impact of this highly complex corporate overhaul will begin to take effect this month.

In August, Reuters made it clear that it would be splitting its businesses down the middle by creating Reuters Trading Systems and Reuters Information Services. In a major consolidation, Reuters put the Reuters Triarch 2000 and Tibco's The Information Bus (TIB) trading room businesses under the same umbrella. The information businesses came under the aegis of Information Services (TTW, August 3).

As part of the reorganization, Reuters Trading Systems will consist of five businesses: Financial Enterprise Systems Business (FESB); the Risk Management Systems Business (RMSB); Money and Foreign Exchange Transactions Systems Business; Securities and Transactions Systems Business; and Client Solutions Business.

The FESB group will be pursuing "a standard open systems" framework for the integration of the Reuters product line, including the current Triarch and Tibco financial product lines, according to Reuters. The integration will encompass clients' applications and other externally supplied products. The framework will extend beyond the trading room with the creation of enterprise-wide products that facilitate straight through processing and links to third party applications.

In line with the company's goal of greater operational congruity, Jean-Claude Marchand, former managing director of Reuters' Europe, will head a new distribution group--Global Sales & Operations (GSO)--that replaces the regional geographic structure which currently exists within Reuters. Marchand's group will be responsible for sales, installation, delivery, technical infrastructure and internal management systems. The new GSO unit emerged as one of three core operating units alongside Reuters Information and Reuters Trading Systems.

Word of the Reuters reorganization came shortly after speculation that the company may offer Tibco Software in an IPO.

The Reuters Trading Systems division will incorporate: Reuters trading room systems businesses--often found in the Open Systems (IMS) category--based upon the digital data distribution platforms Reuters' Triarch and Tibco's TIB; the Tibco Finance Technology (TFT) and Tibco Software subsidiaries; transactional services Dealing 2000/3000; risk management products Kondor+ and Sailfish; and the Reality Online unit.

Reuters also made clear that David Ure, executive director for Reuters' Open Systems global marketing and development, would be the temporary CEO for Trading Systems, coordinating the creation of that unit. A senior manager from outside the company is expected to serve as permanent head of the new trading products group.

Losing little time, Reuters gave Simon Yencken a key post as overseer of Reuters' trading systems product development, strategy and marketing; Yencken is also managing director of FESB. The new FESB group is devoted to maintaining Reuters' financial technology dominance in the trading room (TTW, September 21).

Yencken was among the first to be identified as a major player in the Trading Systems division. Yencken has the responsibility for rationalizing the market data distribution system product lines and, until the new range is released, responsibility for the sale of Tibco and Triarch product lines. Before taking on this new role, Yencken became chief operating officer (COO) at Tibco Finance after serving as general counsel and company secretary at Reuters in its London headquarters. Yencken's term at Tibco began July 27. Yencken will keep his COO post and Tibco Finance staff will continue to report to him. One of the reasons that Yencken took the COO position was to help relieve Vivek Ranadive from his Tibco Finance duties. Ranadive would then help prepare Tibco Software for an IPO (TTW, July 27).

Yencken will report to Ure as do the heads of the other Trading System units; Ure remains responsible for the division's overall results.

For sales and marketing support, Greg Meekings has been designated the managing director, global sales and operations for the GSO group. Meekings oversees the sales and operations activities in support of Reuters Trading Systems (TTW, September 21).

In the wake of the global restructuring, there were several new appointments at Reuters America (RAM), which is part of Marchand's GSO group.

The GSO will have a regional structure represented by managers who will report to Meekings. Each of the global areas--the Americas; the United Kingdom and Ireland (UKI); Germany; the rest of Europe, the Middle East and Africa (REMA); Japan; and Asia/Pacific--either have or will get executives responsible for RTS products.

One of the first regional GSO posts filled was for the Americas with Graham Albutt appointed to president, Reuters Trading Systems, Reuters America. Also among the executive appointments for RAM was Tom Glocer's ascent to the presidency.

Other appointments for the marketing services of RAM included Alex Hungate, former executive vice president for the Reuters Marketing Information business, who is executive vice president for marketing services for the Trading Systems division; he reports to Albutt.

In other RAM appointments, Bruce Wolf will continue to manage IMS sales as vice president and business manager for open systems, and Susan Gammage, director, transactions sales, will stay in her current post as overseer of the sale of transaction products including Dealing 2000-1. Wolf and Gammage report to Albutt.

In Asia/Pacific, Reuters has the start of a new, flatter structure for Reuters Asia that will pave the way for a split that reflects the overall division that is underway at Reuters (TTW, December 14). The GSO, headquartered in Geneva, will oversee the changes in Asia.

Managing director for Reuters Asia, Jeremy Penn, in an exclusive interview last year with Waters Information Services, publisher of TTW, detailed the organization and strategy of Reuters Asia for this year.

Penn, who will report to Marchand, will oversee a transition that is likely to include Reuters Japan splitting away from Reuters Asia and a reorganization of the businesses along the lines defined in August. For now, Japan and Asia/Pacific are part of the regional organizations that make up the GSO.

Among the changes to come, Penn will have 18 direct reports and responsibility for overseeing Asia during the transition that is likely to take all of next year. Penn, who replaced Geoff Weetman in Asia in early 1997, had earlier served several stints with Reuters Asia, most recently in 1991 on a one-year assignment as marketing manager for a territory covering South East Asia and Hong Kong (Dealing & Investment Systems, October 21, 1996).

A former direct report to Andre Villeneuve, chairman of Reuters' Instinet, Penn, an ex-international marketing director for equities, anticipates that Reuters Asia will "put in place a structure which reflects the rest of the group reorganization and structure". Until this comes about, Penn will continue to oversee the information and trading systems businesses. Penn replaced Geoff Weetman in Asia in early 1997, and had earlier served several stints with Reuters Asia (Dealing & Investment Systems, October 21, 1996).

At the same time that Reuters Asia is beginning to reorganize, Laurence Neumann, former country manager of Reuters Israel, has the new position as director of marketing services for trading systems, within GSO. He will be based in Geneva and will report to Meekings.

Also in Asia, among the direct reports to Penn is Richard Pascoe, who will shift from country manager of China to become president of Reuters Japan. One of Pascoe's reports in Japan will be Yuji Takei, as executive vice president, Trading Systems (formerly technical manager of Reuters Japan). Keith Macbeath, until recently marketing director for Reuters Asia, is moving to London to take a position in strategic planning.

In the functional side of the organization chart, Michael Tarlinton takes over Macbeath's Asia marketing slot but retains his present title of marketing manager.

With Pascoe moving to lead Reuters Japan, the new top person in China will be Tan Wee Seng, who has been finance manager, Reuters Hong Kong. Pascoe replaces Frank Beaumont in the Japan position. Beaumont will be the global accounts director within GSO.

Throughout 1999, Reuters Asia will remain in place as a geographical unit as the changes take effect, Penn adds. The Reuters Japan spin-off is likely to happen by the end of this year.

The country managers of China, Hong Kong, Taiwan and the Philippines have been reporting to Marion King, who has been managing director of Reuters East Asia, based in Hong Kong. With King's promotion to head the money and foreign exchange transaction systems business, she will relocate to London, taking over from Rosalyn Wilton (Inside Market Data, September 21). With the changes, these country managers will answer to Penn directly.

John Parcell, who will administer all financial information products, editorial, media and corporate accounts, will head the other new division, Reuters Information Systems. The grafting of the Reuters and Tibco trading system businesses will not include electronic stock brokerage Instinet, which will remain a separate subsidiary.

While the details for other positions were being worked out, Ure managed to find a chief technology officer, Mike Sayers, who is setting company-wide policies for desktop, network and system management. Sayers will also oversee the use of technologies derived from Reuters' investments in emerging technology companies.

The uniting of the Triarch and Tibco businesses is clearly only the beginning.

When Reuters announced that it was acquiring Tibco in 1993, the speculation was rampant then that the trading room technologies of the Triarch and Tibco environments would be merged quickly. Pundits aside, Reuters and Tibco pursued separate marketing and sales strategies for the past five years. Clearly, starting in 1999, the line between the TIB and the Triarch environments will begin to blur.

Over the coming years, the core protocols of each will rise to the top and they will be supported by what will be industry-standard reliable IP multicasting technology, speculate industry observers. The TIB and Triarch distribution mechanisms are likely to be masked.

"There will be unification from a certain perspective," said Bill Donner, US-based director of research and architecture for Reuters, when asked to speculate on the future of trading rooms for the November 1998 edition of Waters magazine. Each platform is likely to support the same look and feel as well as the same applications--just their legacies will be different. "They will effectively be the Reuters trading platform," says Donner, who was not speaking for the product development efforts of Reuters.

James Powell, Tibco's CTO, is in fairly close agreement with Donner's predictions. Powell was also interviewed for the Waters piece.

Not surprisingly, Powell foresees Tibco's major contribution to the future in the form of the PGM Reliable Transport Protocol. In February, Tibco and Cisco Systems presented this joint IP multicasting proposal to the Internet Engineering Task Force (IETF) for future inclusion in IP, version 6.0; further action by the IETF will be coming later this year (TTW, February 16).

While the technology path for the Reuters and Tibco trading technologies may be getting clearer, it may take much longer before the vagaries of the sales, marketing and support staffs of Tibco and Reuters can be clarified.