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Market Opportunities in XBRL. Tim Matthews VP Marketing January 18, 2005. Topics. What is the XBRL opportunity? When is the XBRL opportunity? How big is the XBRL opportunity?. Disclaimer. Ipedo is an Enterprise Information Integration (EII) vendor.

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market opportunities in xbrl

Market Opportunities in XBRL

Tim Matthews

VP Marketing

January 18, 2005

topics
Topics
  • What is the XBRL opportunity?
  • When is the XBRL opportunity?
  • How big is the XBRL opportunity?
disclaimer
Disclaimer
  • Ipedo is an Enterprise Information Integration (EII) vendor.
    • Focus on collecting and integrating data (into XBRL)
    • Focus on extracting data and analyzing (from XBRL)
  • Member of XBRL.org since 2003
  • Created joint XBRL-based analysis solution with Business Objects and EDGAR Online
  • Three pilot-stage XBRL customers
slide4
What is the XBRL opportunity?

Opportunity is missed by most people because it is dressed in overalls and looks like work.

Thomas A. Edison

famous technology predictions
Famous Technology Predictions
  • ‘I think there is a world market for maybe five computers.’
    • Thomas Watson, Chairman of IBM, 1943
  • ‘There is no reason why anyone would want a computer in the home.’
    • Ken Olson, Present, Chairman and founder of Digital Equipment Corporation, 1977
  • ‘640K should be enough for anybody.’
    • Bill Gates, 1981
  • ‘So far, Java seems like a stinker to me…I have a hunch that it won't be a very successful language.’
    • Paul Graham, Author
famous investment decisions
Famous Investment Decisions

Source: The Bessemer Venture Partners “Anti-Portfolio” http://www.bvp.com/port/anti.asp

business reporting supply chain

XBRL for

Financial Statements

XBRL for G/L

Journal Entry

XBRL for

Reporting

Regulatory Filings

Internal

External

Investment

Business

Processes

Financial

Financial

and Lending

Operations

Analysis

Reporting

Reporting

XBRL for Business

XBRL for

XBRL for Audit

Event Reporting

Credit Filings

Schedules

Financial

Publishers

Companies

Investors

and Data

Participants

Aggregators

Trading

Management

Auditors

Regulators

Partners

Accountants

Software Vendors

Business Reporting Supply Chain

Source: XBRL.org

opportunities in corporate reporting
Opportunities in Corporate Reporting
  • Save costs by preparing data in one form and automatically generating many outputs.  Companies will avoid re-keying of data and other manual tasks.
    • Conversion software, document prep software, __________…
  • Consolidate results across divisions and subsidiaries with much greater speed and reliability.
    • Integration software, _________…
  • Improve accuracy and reliability of financial data.
    • Data quality software, rules engine software, ________…
  • Focus effort on analysis, forecasting and decision making, rather than on laborious tasks in gathering, compiling and preparing data.
    • Business Intelligence software, BPM software, _________...

Inspiration: XBRL.org

opportunities in corporate reporting 2
Opportunities in Corporate Reporting (2)
  • Achieve quicker and more efficient decisions.
    • BPM software, _________…
  • Make more effective use of the internet in communicating with investors.  Companies will benefit from the growing importance of Web sites as a means of communication.
    • IR software; Portal software, __________…  
  • Improve investor relations through provision of more transparent and user-friendly information.
    • SOA stacks, ESBs, IR software and services, _________…
  • Simplify the process and reduce the costs involved in regulatory reporting to tax and other authorities.
    • ERP software, Accounting software, __________…

Inspiration: XBRL.org

opportunities with banking loan and credit management
Opportunities with Banking Loan and Credit Management
  • Reduce costs in processing data.
    • Integration software, data management software, ______…
  • Compare and analyze financial information much more reliably, fully and effectively using automated processes.
    • BI software, ________…
  • Track financial performance more quickly and efficiently
    • ___________
  • Example: Credit insurance underwriting decisions depend on high-quality assessment of large quantities of up-to-date information. 

Inspiration: XBRL.org

more use case areas
More Use Case Areas
  • Regulators and Government
  • Investment Analysts
  • Stock Exchanges
  • Financial Data Providers
  • See http://www.xbrl.org/Companies/ to get started
slide12
When is the XBRL opportunity?

Half our life is spent trying to find something to do with the time we have rushed through life trying to save.

Will Rogers

the xbrl market is here
The XBRL Market Is Here…
  • XBRL effort started in 1998
  • XBRL 2.0 – December 2001
  • XBRL 2.1 – December 2003
  • FDIC XBRL Contract Awarded – June 2003
  • SEC Solicits Market Feedback – July 2004
slide16
How big is the XBRL opportunity?

Money is better than poverty, if only for financial reasons.

Woody Allen

is a macro sizing of xbrl relevant or needed
Is a Macro Sizing of XBRL Relevant or Needed?
  • Market (as opposed to the standard) is too young, IMO
    • Other “XML markets” are in a similar boat
  • Analyst coverage coming from XML generalists
    • Tech focus, not business focus
  • Until recently, no imperative to act (compare Basel II)
  • Plus, your boss is not likely to believe the numbers anyway…
comparable markets basel ii spend
Comparable Markets: Basel II Spend
  • A New Standard for the Measurement of Risks in Banks, and for the Allocation of Capital to cover those risks. Published by the Basel Committee of G10 Central Banks
  • Basel II technology spend by European banks (Datamonitor)
    • 2004 - $1.9B
    • 2005 - $2B
  • “Most of the software purchases will be around databases, data warehousing, risk analysis calculations and credit scoring as the spending begins in earnest.” -- Cubillas Ding, senior analyst, Datamonitor
  • “About 40 per cent of my resources this year have been consumed on design activity around responses to Basel and Sarbanes and International Accounting Standards compliance." -- Kevin Lloyd, CTO, Barclays
segment 1 public companies reporting financials to the sec
Segment #1: Public Companies Reporting Financials to the SEC
  • Public Company Targets
    • NASDAQ: ~3,200
    • NYSE: ~2,800
    • Total: ~6,000
  • Say you sold them
    • XBRL prep tools @ ~$5K = $30M (low?)
    • Data integration/conversion @ ~$100K = $600M
    • BI/BPM/EDW @ ~$500K = $3B
  • And you got 10% market share
    • XBRL prep tools = $3M
    • Data integration/conversion $60M
    • BI/BPM/EDW = $300M

Sources: NASDAQ.com; NYSE.com

segment 1 other metrics
Segment #1: Other Metrics
  • Filings
    • The EDGAR system processes over 500,000 filing documents every year
  • EDGAR Searches
    • 2003 – 141,500,000
    • 2004 – 288,900,000
    • 2005 – 379,000,000
  • “The SEC anticipates that demand for the disclosure data from EDGAR will continue to increase as interactive data (XBRL), and ticker symbol and full-text search capabilities are implemented.”
  • So, just for fun, how much could you make for PPC ads on 379 million searches…

Sources: SEC.gov, SEC 2005 Annual Report

segment 2 analyzing corporate financials
Segment #2: Analyzing Corporate Financials
  • Job Type Targets* (U.S. 2004)
    • Accountants and Auditors – 1,200,000
    • Loan Officers – 291,000
    • Credit Analysts – 68,000
    • Total Seats - ~ 1.5M
  • Say you sold them XBRL analysis software on an annual per seat model
    • 1.5M seats * $1,000 seat/year = $1.5B/year(Salesforce.com = $780 seat/year; Hoovers ~$1K seat/year)
    • Three year return = $4.5B
  • And you got 10% market share = $450M

*Source: US Dept. Labor www.bls.gov

disruptive technology
Disruptive Technology?

“Companies in the business of collecting and distributing financial data may face serious competition when XBRL-based applications become available. Information providers such as Standard & Poor's Compustat, Thomson Financial, and Bloomberg may find their business models threatened unless they can adapt.”

“After Sarbanes-Oxley, XBRL?” BusinessWeek Online, Feb 8, 2005

product differentiation defense
Product Differentiation/Defense
  • Better
    • Can your competitor’s product a) expedite SEC filings or b) help clients better assess risk…
  • Faster
    • Would direct access to tagged data make comparisons and analysis faster…
  • Cheaper
    • Would direct access to financial filings reduce set up time and cost, and reduce TCO of your product overall…
  • Easier to Use
    • Can you make trending, analysis, reporting easier for your customers…
    • Can your competitors product replace cut-and-past with point-and-click…
  • Well Integrated
    • Can your product do things out of the box that your competitor’s can’t…
  • Future Proof
    • Would a move to XML, SOA, XBRL make your product “next gen” and “future proof”…
where is your opportunity

XBRL for

Financial Statements

XBRL for G/L

Journal Entry

XBRL for

Reporting

Regulatory Filings

Internal

External

Investment

Business

Processes

Financial

Financial

and Lending

Operations

Analysis

Reporting

Reporting

XBRL for Business

XBRL for

XBRL for Audit

Event Reporting

Credit Filings

Schedules

Financial

Publishers

Companies

Investors

and Data

Participants

Aggregators

Trading

Management

Auditors

Regulators

Partners

Accountants

Software Vendors

Where is Your Opportunity?