With the news that Thomson Reuters Chief Tom Glocer is set to step down on January 1, the industry began questioning what went wrong with Eikon, the company's next generation market data desktop product launched with much fanfare in September 2010.
Thomson Reuters had high expectations for Eikon, reportedly investing close to $1 billion dollars in the product, holding launch celebrations in 78 offices worldwide and live events in 14 cities that brought in Wall Street decision makers for demos and executive speeches. An ad campaign -- the company's largest in its history -- touted the product as a market data platform for "The New Eikons of Finance."
All seemed to be going well. Members of the executive team even rang the New York Stock Exchange opening bell on October 4, 2010, and Devin Wenig CEO of the Markets Division gave interviews.
Nine months later Wenig unexpectedly quit along with five key members of staff, after reportedly being asked to make faster and more extensive structural changes than planned. A few months later Glocer expressed regret for the fast pace of Eikon's launch, and one month after that in early December, the company announced Glocer's replacement.
[Thomson Reuters Eikon Marketing Video]
Overall, sales of Eikon have reportedly been disappointing, putting pressure on the stock, which dropped 36 percent to $26.88 in December from a high of $42 in February 2011.
WHAT WENT WRONG?
Industry experts say that it was a confluence of factors. "In an economy where cost cutting is rampant on Wall Street, it's hard for any company to make a major platform switch," says one industry executive, who requested anonymity. In addition to the cost of the new platform, there are integration and training costs associated with a major platform change. These costs are not easy to swallow in a difficult economic environment.
Thomson Reuters vision of Eikon was to create an intuitive platform that would also be easy to roll out. "They have not sunset all their existing products -- such as Bridge, and other platforms. The idea was to create a next generation system and transfer all of their existing users to the newer, more robust front end," says the executive.
He adds, "Eikon was not nearly as successful as Thomson Reuters would have liked, which is to a certain extent why Devin (Wenig) is gone and I'm sure had something to do with Glocer leaving." Philip Brittan, who runs the Eikon Group, says he's left scratching his head at comments like these and others in the press.
Brittan, who is Global Head of Desktop/Mobile Platform at Thomson Reuters, has a long history of successful product launches starting early in his career when he founded several tech start ups. He worked for Bloomberg for six years and brought to market its foreign exchange product. Then he was recruited by Google to plan the strategy for Google Finance. In May, Thomson Reuters tapped him to come on board to run Eikon.
Brittan says Eikon is exactly where it should be according to the company's metrics. He says, "I watch a series of metrics such as how many terminals are we selling and the rate at which we are converting people from trials, the number of active users, etc. There are tens of thousands of people using the Eikon product today." In addition, he notes that the firm has received positive feedback from its pilot customers and other clients.
He admits, as with any new product, there was some "teething" that had to be worked through early on. "There is a process to maturing technology and getting the early kinks worked out," Brittan says. "There was no one smoking gun that everyone experienced, just some little things like 'this isn't showing up right' or 'when I do this giant flex sheet it uses a lot of memory,' or ‘the layout on screen isn't how I want it.'" He explains that these things were fixed very quickly.
Brittan says speed was another issue that came up early during the release. "Speed is something that we are constantly optimizing," he says. "Speed of retrieval of news stories was sluggish according to some, and now it is multiples faster. Creating charts and downloading data into excel, all these things are dramatically faster.
"The product we have out today is dramatically different from the Version 1 roll out of a year ago," Brittan explains. "The initial product had some gaps, which we've been filling."
The early bugs are not the only issue Thomson Reuters is facing. According to Sang Lee, Co-founder and Managing Partner of Aite Group, a financial research and consulting provider, Thomson Reuters has had some integration issues and the marketing of the product was not very good initially. To top it off, the market conditions this past year haven't been great. As he sees it, "All of the things that could have gone wrong, have gone wrong."