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The Bloomberg Terminal

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The Bloomberg Terminal, an iconic tool in the world of finance, transformed how professionals accessed, analyzed, and acted on market information. Lunched in the early 1980s, it quickly became an indispensable part of the financial industry, enabling faster and more informed decision-making. By 2012, the Bloomberg Terminal had a greater annual revenue than Thomson Reuters.

The terminal’s evolution reflects the vision of its founder, Michael Bloomberg, and the broader transformation of financial markets through technology.

The Origins of the Bloomberg Terminal

The Bloomberg Terminal was born out of a need for real-time financial data in an era when market information was often delayed or incomplete.

In 1981, Michael Bloomberg, a former partner at Salomon Brothers, was dismissed from the firm during a merger. He did not get any severance pay, but had been a partner at the firm and owned $10 million worth of equity. With this money, Bloomberg founded Innovative Market Systems (IMS), which later became Bloomberg LP. At Salomon Brothers, he had designed computerized financial systems specifically for Salomon, so he was experienced in this field.

Bloomberg identified a gap in the market: financial professionals lacked tools to access live market data and perform complex analyses efficiently. His solution was the Bloomberg Terminal, which combined real-time data feeds, analytical tools, and a user-friendly interface to meet these needs. He believed that Wall Street firms would pay well for this type of tool, and he was right.

An early name for the terminal was Market Master terminal, before it was given the name of its inventor.

The Bloomberg Terminal was released to market in December 1982. Before the year was over, Merrill Lynch had purchased 22 terminals – making them IMS´s first major client. Merrill Lynch was actually so impressed that they also acquired a 30% stake in IMS for 30 million, in a deal that came with a five-year restriction aiming to keep the terminals away from Merrill Lynch´s competitors. In 1984, Merrill Lynch removed the restriction.

Early Growth and Features

The first version of the Bloomberg Terminal featured basic but revolutionary capabilities, including live market data, analytics, and a secure messaging system. While the hardware was bulky and the interface monochrome, the terminal’s functionality set it apart from anything else available at the time.

As the financial industry grew more complex, so did the terminal. By the late 1980s, it offered expanded market coverage, better analytical tools, and a more user-friendly design. The stock market crash of 1987 further highlighted the terminal’s value, as traders relied on its real-time updates to navigate the crisis.

Expansion and Growth

The 1990s marked a period of rapid growth for the Bloomberg Terminal. It moved beyond Wall Street to reach financial professionals worldwide, with coverage expanding to include international markets, currencies, and commodities. The terminal became a one-stop solution for market data, news, and communication, solidifying its place as an essential tool for traders, analysts, and investors.

Key innovations during this period included the integration of Bloomberg News, providing live financial reporting directly within the terminal, and the introduction of more advanced graphical interfaces. The first Bloomberg keyboard with a trackball and built-in voice-chat features was released in 1990, and the first colour edition of the terminal was launched the following year.

Staying Ahead Through Innovation

Michael Bloomberg stepped away from working on the terminal in 2001 as he was running for New York City mayor. He served as the mayor of New York City for three terms, from 2002 to 2013. In 2014, he returned to work on the terminal.

The Bloomberg Terminal’s success has always been rooted in its ability to innovate. It introduced tools that allowed users to perform detailed financial modeling, analyze portfolios, and execute trades directly from the platform. Its secure messaging system, known as Bloomberg Instant Messaging (IB), became a key feature, allowing financial professionals to collaborate in real time.

Over time, the terminal has adapted to changing technologies, ensuring that it will remain relevant in a rapidly evolving industry. Colour displays have replaced monochrome screens, cloud integration has provided enhanced accessibility, and mobile applications allows users to stay connected on the go. A fingerprint scanner, dual-screen display, and custom keyboards with special keys are just a few examples of currently available accessories.

As the Bloomberg Terminal continues to adapt to the needs of a digital-first world, it has been incorporating advanced software tools like machine learning and predictive analytics to provide deeper insights, and its coverage has expanded to include emerging trends such as environmental, social, and governance (ESG) data, reflecting the changing priorities of investors.

Despite competition and the high cost, the terminal remains a cornerstone of the financial industry, and its global user base spans several hundred thousand professionals, from traders and analysts to CEOs and policymakers.

Price and Setup

  • Bloomberg Terminals are not purchased; they are leased in two-year cycles. In the late 1990s and early 2000s, it was also possible to lease them for three-year cycles, but this is not longer an option.
  • As of 2022, there were roughly 325,000 Bloomberg Terminal subscribers in the world.
  • Most setups have between two and six displays.
  • Many exchanges and news companies charges additional fees for access to their information.

Challenges and Competition

While the Bloomberg Terminal has long been the market leader, it has faced challenges from competitors like Thomson Reuters Eikon and FactSet. These platforms offer similar features, often at lower costs.

The costs of using the Bloomberg Terminal has raised questions, particularly among smaller and mid-sized firms who might struggle to justify the annual expense. However, the Bloomberg Terminal’s comprehensive features, combined with its reputation for reliability, have helped it maintain its dominant position.

Impact on the Financial Industry

The Bloomberg Terminal revolutionized the way financial professionals operate. By providing real-time data, advanced analytics, and seamless communication tools, it has streamlined decision-making and increased the efficiency of global markets.

Its role extends beyond trading floors; the terminal is used for risk management, corporate strategy, and even by policymakers. It has also become a symbol of expertise in the financial world, with its distinct keyboard and interface instantly recognizable to industry insiders.

Final Thoughts

bloomberg terminal

The Bloomberg Terminal stands as a testament to the transformative power of technology in finance. From its origins as a solution to outdated data systems to its current role as a comprehensive financial tool, the terminal has shaped the way markets operate and decisions are made.

Michael Bloomberg’s vision of real-time, accessible financial data has revolutionized the industry, and the terminal continues to evolve to meet the challenges of a fast-paced, interconnected world. As the financial landscape changes, the Bloomberg Terminal remains a symbol of innovation and a vital tool for those navigating the complexities of global markets.

About Michael Bloomberg – the Inventor of the Bloomberg Terminal

Michael Rubens Bloomberg is an United States businessman and politician. He is the owner and co-founder of Bloomberg L.P. and was its CEO in 19081-2001, and then again in 2014-2023. From 2002 to 2013, he served as the mayor of New York City for three terms. Since June 2022, Bloomberg has served as chair of the Defense Innovation Board, an independent advisory board providing recommendations to the U.S. Department of Defense.

Bloomberg was born in Boston on February 14, 1942. His parents where William Henry Bloomberg (1906-1963) and Charlotte (née Rubens) Bloomberg (1909-2011). Michael Bloomberg has Polish Jewish ancestry on his father´s side and Lithuanian Jewish ancestry on his mother´s side. William Bloomberg worked as a bookkeeper for a dairy company, and died when Michael Bloomberg was in college.

Michael Bloomberg graduated from Medford High School in 1960, before going to John Hopkins University. He received his Bachelor of Science degree in electrical engineering in 1964 and graduated from Harvard Business School with a Master of Business Administration (MBA) degree in 1966. Starting his career in finance at Salomon Brother, he was eventually made redundant and formed his own company in 1981.

As of April 2024, Michael Bloomberg’s net worth exceeded $106 billion, according to an estimate published by Forbes. Bloomberg has signed The Giving Pledge and has already given away over $17 billion to philanthropic causes.