Reuters Reorg Ends Product Group Distinction Between Real-Time, Historical And TRS

Reuters Holdings PLC announced a management restructuring Sept. 20 that discontinues the company's policy of splitting management of its real-time and historical information services and trading room systems products.

By merging the groups and dividing management by product development and marketing functions, the move aims to encourage integration of these product lines, which increasingly find themselves stepping on each other's toes. And, with slower revenue growth predicted for the second half, the restructure seeks to eliminate duplication, a term that often points to staff cuts.

Management of Reuters' transactional and editorial services groups is unaffected by the reorganization. But sources at Reuters believe further changes are in the pipeline that may involve some reorganization within these product areas.

According to Glen Renfrew, managing director and chief executive, the restructuring aims "to accelerate the integration and enhancement of Reuter products, support the quality and expansion of our databases, eliminate duplication and devote more resources to looking after customers."

Under the restructuring, Buford Smith, senior vice president, marketing and product development, of Reuters Information Services Inc., assumes responsibility for product development of real-time and historical information and trading room products. Smith, now senior vice president, information product technology, continues to report to Andre Villeneuve, head of Reuters America.

The marketing function for the three product groups will be handled by each of Reuters' three geographic management areas: Reuters America; Reuters Europe, Middle East and Africa (REMA); and Reuters Asia.

David Morgan, former group product leader for trading room systems products, becomes marketing director of Reuters Europe "with the additional worldwide responsibility of directing the specification, launch and management of global information and trading room products," Reuters says. Morgan continues to report to David Ure, head of REMA.

The third former group product leader, Peter Benjamin, who headed Reuters' historical information services, becomes director of special projects, "with global responsibility for acquisitions," according to Reuters. Benjamin, who was employed in a similar role prior to his appointment as group product leader, reports to Peter Job, head of Reuters Asia.

The management reorganization seeks to address problems Reuters has experienced in a number of areas. In particular, the merging of the three product groups appears to be aimed at focusing the previously blurred distinction between real- time and historical information and between real-time information and trading room systems.

But Reuters sources say the new structure could damage Reuters' ability to bring relevant products to market, pointing to the need for marketing input in the product development process.

Reuters' as-yet unannounced Decisions 2000 fixed-income analytics product -- the so-called Bloomberg-Killer -- is months behind schedule. Sources at Reuters say the separation of real-time and historical information has been a factor in the continued delay of the product, which is being developed in part by Steven Levkoff's Capital Markets Decisions Inc.

The Decisions 2000 development project involves teams in both real-time and historical information groups, which until now have been led by managers in New York and London, respectively. The political and geographic distinction between the real-time and historical information groups, sources say, have made it difficult for Reuters to coordinate the development, which involves teams in Stamford, Conn., Toronto and London (IMD, March 5).

Reuters sources say the company now plans a "preliminary launch" of Decisions 2000 before year-end. Full rollout of the service, they say, is expected by March.

Reuters sources, meanwhile, say the company will refocus its historical information products to appeal to its mainstream professionally oriented client base. That would entail, these sources say, concentration on economic news, portfolio pricing and analytics products.

The distinction between real-time information and trading room products has also grown fuzzy recently. Reuters' launch this spring of its Money 2000 service introduced the Reuter Workstation, a 386-based PC that allows users to manipulate data as well as display it (IMD, April 16).

While no such intention has been formally announced, by networking Reuter Workstations and delivering other market data vendors' services across the LAN, Reuters' real-time information group may have found itself with a rival to TRIARCH 2000, trading room systems group's primary data delivery product. By placing product development of both groups under common management, Reuters may have averted a potentially damaging ruckus between Smith and Morgan.

As part of the restructuring, Reuters announced the appointment of Martin Vickery as operations manager for REMA, with responsibility for "high-level data quality management." Vickery was previously managing director of REMA's Northern Region. His role will focus on the quality and extensiveness of Reuters' databases worldwide.

The creation of an acquisitions-oriented role for Benjamin confirms that Reuters is again seeking to buy, perhaps rather than build. This spring, Reuters shareholders approved an extension of the company's borrowing limits to 1.02 billion pounds sterling ($1.91 billion) from 816.6 million pounds sterling ($1.53 billion) (IMD, April 30). Reuters also has 252.8 million pounds sterling in cash and marketable securities on hand, according to its 1989 annual report.

Reuters said at the time that it had "no immediate plans for major acquisitions or borrowings." Since then, the company has bought only Uplink Ltd., a U.K. provider of two- way satellite services (see Brief Transmissions). But Reuters' name has been linked to a number of potential acquisitions, among them: Dun & Bradstreet Corp.'s Datastream International Ltd. subsidiary (IMD, March 19); Automatic Data Processing Inc.'s Brokerage Information Services Group (IMD, Nov. 13, 1989); FD Consulting Inc. (IMD, April 30); and most recently Bloomberg L.P. (IMD, Sept. 17).

Reuters' moves to coordinate its real-time and historical information groups with respect to analytics could expedite the launch of Decisions 2000, making an acquisition of Bloomberg unnecessary.

Benjamin was involved in the acquisition of the core subsidiaries in Reuters' historical information group -- IP Sharp Associates and Finsbury Data Services Ltd. He took over management of historical products when the group became large enough to require it.

Politically, the restructuring appears on the surface at least to be a coup for Buford Smith, who took over from John Parcell as head of real-time information in 1988 (Micro Ticker Report, July 1988). At the time, Smith's appointment in the place of London-based Parcell was seen as an indication of a shift of power within Reuters from Europe to America. By taking on product development responsibility for historical information and trading room systems, Smith appears to be building on his position, at the same time continuing the shift of political power westward across the Atlantic.

But some industry observers believe that Smith has in fact lost out in the deal. By splitting management along product development and marketing lines, they say, control of the respective product lines has shifted back to regional heads Villeneuve, Ure and Job.

For Morgan, a veritable new kid in on the block, assumption of worldwide responsibility for marketing could be interpreted as a widening of experience, perhaps in preparation for greater things ahead. Morgan took over as group product leader of trading room systems from Mario Rosi, who left the company in the wake of National Westminster Bank's decision to dump Reuters' TRIARCH 2000 digital data distribution platform (Trading Systems Technology, Jan. 15). Significantly, Morgan's London base appears to balance the division between Reuters America and REMA.

Villeneuve, Ure and Job remain in place as deputies to Renfrew. Sources say the latest restructuring was designed by the four on a recent trip to Switzerland (IMD, Sept. 17). The reorganization leaves the geographic heads in place to continue their respective campaigns to take over Renfrew's post when he decides to retire. Sources, however, say Renfrew's distaste for "Oxbridge types" -- graduates of the U.K. universities of Oxford and Cambridge -- could disallow Villeneuve and Ure from the running.