MarketAxess buys Greenline

March 11, 2008

Mostly reports that MarketAxess has bought a FIX tools vendor: Greenline.  Greenline’s entire product line seems to consist of FIX debugging tools. I’m sure they’re very helpful if you’re executing a FIX integration. But what does it say about FIX as protocol or standard if an ISV can build an entire business around debugging and diagnostic tools ?

More importantly, I think it teaches us an important lesson qua Ferguson on platform strategy.  For a platform to gain adoption in a multisided market, it has to give one group of constituents a free ride to get the others on board. For instance, Microsoft gives developers a free ride with excellent dev tools and resources either free or at cost. The developers generate apps that bring fee paying users on board. FIX is just a standard, and not a platform, and doesn’t give a free ride to buy or sell side. Hence the patchy adoption in fixed income, and the market opportunity for the likes of Greenline.

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