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September 30, 2003

Universal IM for Traders

By Peter Chapman

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  • Universal IM for Traders

Reuters Messaging Tries to Connect the Dots

Reuters has set in motion a plan to stitch together the fragmented instant messaging industry.

The market data giant last month signed separate deals with America Online, Microsoft and IBM's Lotus Division to connect its Reuters Messaging service to their instant messaging systems.

The agreements will provide for inter-operability between RM and each of

the three systems, allowing RM users to communicate with users of any of the three services and vice versa.

Instant messaging is becoming a standard communication tool in most equity trading departments. But, currently, a trader using AOL's AIM service, for example, cannot send messages to a trader using Reuters Messaging.

There is no connectivity between the two. The same holds for the other major services from Yahoo!, Microsoft, Communicator Hub IM, Bloomberg, and Lotus.

Reuters launched its instant messaging service a year ago. In the first quarter of next year, the vendor will offer connectivity to AOL's AIM and ICQ services, Lotus' Sametime service and Microsoft's MSN service.

All five services, including RM, employ different underlying communication protocols. Therefore, a specially-built "bridge" will connect the services.

Inter-operability, or connectivity as Reuters prefers to call it, is the holy grail of the instant messaging world. Right now, a trader may have up to seven different IM clients on his desktop. Most traders would rather use just one, much the way they do when sending e-mail.

"Our customers have told us they want an application on their desktops that has the same connectivity as e-mail and the telephone," said David Gurle, a Reuters executive vice president in charge of collaboration services.

The major providers of instant messaging can be divided into two camps. The public services are available from AOL, Yahoo! and Microsoft. The private "gated communities" are from Reuters, Communicator Hub IM, Lotus and Bloomberg. Thomson Financial also plans to debut instant messaging. (Thomson Financial is an affiliate of Thomson Media, which publishes Traders Magazine.)

AOL is the most widely deployed, a fact that causes brokerage house IT execs to lose a lot of sleep. Because consumer networks such as AOL provide little in the way of security, various bad actors can potentially enter the brokers' computer systems. Spam, viruses, and anonymous messagers are all considered threats.

Reuters guarantees its customers their interactions will be secure. In particular, it guarantees that no one will be able to impersonate the user; no hacker will be able to insert anything into a message; no one can "listen in"; and neither party to the message can repudiate anything that is said.

To prevent repudiation, Reuters will archive the messages. Archiving also helps brokers meet new rules mandated by various regulatory bodies such as the National Association of Securities Dealers and the New York Stock Exchange. These rules stipulate that brokerages must save messages for at least three years.

The Cost

Reuters deploys RM either as a stand-alone application or as part of one of its workstations. Those workstations most widely deployed in trading rooms are BridgeStation, BridgeStation Plus, and Reuters 3000 XTRA. Workstations for traders cost anywhere from $350 to $1,350 per month.