Bloomberg Terminals suffered a "global outage" that had an impact on markets in Asia and Europe but the market data and financial services giant said that its flagship Bloomberg terminals were up and running. But industry observers are noting that an over-reliance on a single vendor might add vulnerabilities to a market that does not like surprises.
[Twitter erupts in snark over Bloomberg Terminal failure.]
In the early morning hours, Bloomberg terminals suffered an operational outage. While the brunt of the network outages had an impact on financial firms and exchanges in Asia and Europe, the outage appeared to be fixed soon after trading opened in the U.S.
The news media reported on the outage and cable news programs rushed to explain why the lack of Bloomberg tools and data could roil trading at firms with state-of-the-art technology. Twitter pulled no punches when it came the disruption of one of Wall Street's most coveted data and technology tools.
The New York Times asked a trader what problems the failures created. The trader replied: “Problems? Simple: No prices. Nothing. So you can’t do anything at all.”
At 11:09 EST, Traders received this e-mail from a Bloomberg spokesman:
"Service has been fully restored. We experienced a combination of hardware and software failures in the network, which caused an excessive volume of network traffic. This led to customer disconnections as a result of the machines being overwhelmed. We discovered the root cause quickly, isolated the faulty hardware, and restarted the software. We are reviewing our multiple redundant systems, which failed to prevent this disruption."
Larry Tabb of market research firm Tabb Group told Traders that he had never heard of a Bloomberg terminal outage in his years working in financial services. Tabb admitted that he was "pretty surprised" by this morning's news.
"It goes to show that technology has challenges and it's very difficult to find any single technology that doesn't have a problem once in a while. We saw SIP outages last year, we frequently see exchanges go down here and there, the SEC has pushed Res SCI and we saw Knight Capital" suffered a flash crash," he said. "Even the best of firms have problems."
Tabb cited Amazon's outages in 2013 and 2014 as an example of what befalls an industry when a large firm with a vast client base lose their services. "Whether it was DDS (dedicated denial of service attack), a faulty switch and apps don't get updated appropriately things happen," he told Traders.
But the reaction over Bloomberg's outage points to the capital market's over-reliance of a single platform for data. "The sellside has pretty consistently had a two or more vendor strategy in case on one vendor goes down, from market data standpoint, they have a backup. I think the challenges are more prevalent on the buyside in that they usually have a single vendor strategy."
And when a large service provider goes down, the industry can come to a halt, Tabb said. "If your clients are completely reliant for Bloomberg for data and messaging, it's hard to service your clients when your clients are blind and can't communicate."
This article originally published by Traders Magazine.
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