This report has been kept as factual as we recollect from notes made at the time. Paragraphs are numbered for ease of reference.

Very little information we received was subject to ESI’s NDA’s (Non Disclosure Agreements) that we all signed. ESI marketing, financial and technological details that might assist commercial competitors or journalists are referred to as (NDA) points.

We are grateful to ESI for their time, effort and hospitality at our meeting, and we were particularly impressed by the technical and customer support department representations.
 
 
 

BB Delegates in alphabetical order:

anthonyjb
Bullshare (nominated group leader)
Dangerous
gd_anon
Greystone
Robin
 

1. We six met nearby ESI for preliminary introductions and discussions at around 11:30 hrs, before our appointment at 12:30.  We discussed, broadly, our specific interests and what we hoped to gain from the meeting.  We agreed that on this occasion, Bullshare should be our group leader in view of the effort and awareness he had of the problems and alternatives to the ESI BB.  Further, we should sit back and listen to ESI’s presentation then have a short private break to discuss how our own enquiries were to be fitted in.

2. Attending at 12:30, we were welcomed and offered a buffet lunch, at which we were introduced to the ESI staff who would be contributing to the meeting.  We started discussions in a conference room at 13:25.

3. Julian Costley, the Chief Executive Officer, outlined the agenda, the reason for the non-disclosure agreements (NDA), the objectives for the afternoon, and the proposed presentations.
4. The ESI agenda comprised:

5. 12:30  Buffet lunch with refreshments  All incl. Visiting
Attendees

6. 13:30   Introduction     Julian Costley (JC)
Who’s Who
Purpose of NDA

7. 13:35  General Objectives of meeting  All

8. 14:00  Overview of E*Trade UK   JC
Business Objectives and Plans

9. 14:15   E*Trade UK product planning  Greg Glass (Marketing
Director)
& David Martin (Product Manager)

10. 14:45  Tour of E*Trade UK Operations  David Robinson (DR)
(Technical Director),
Tami Bourke (TB)
(Head of Customer Group) and Visitors

11. Coffee Break

12. 15:15  ESI Service Reliability   DR
Business Continuity
Future Plans

13. 15:45  Customer Communications  TB/All

14. 16:00  Open Discussion    All

15. 16:30  Close
 

16. It became apparent the chief ESI concern over the NDA’s was in the launch and content of E*Trade UK.  Put simply, this is ESI taking up the opportunity to become the UK franchisee of the intended E*Trade global on-line trading empire.

 17. Points considered as commercially sensitive include:

18. The proportion of present ESI subscribers to free users in number;

19. The proportion of site access resources used by present ESI subscribers compared to free users.

20. The timetable for the launch of E*Trade UK.

21. There are continuous changes necessary to prepare for E*Trade and develop the site for it.  ESI say that the changes should be “off the existing user bounds”.  We understood this means existing users should not notice content or service reliability/performance changes leading up to the launch of E*Trade.  There is work currently underway to improve site access and benefit existing users, and part of this was performed last weekend.

22. We specifically raised the point with ESI: “If we are subscribing to a service, why should we be subjected to having advertisements appear on the pages we are paying for?”

23. The ESI response was Subscribers are attractive advertising targets, so ESI want to arrange to sell advertising space on the parts of the site that we visit.

24. Julian Costley’s introduction finished at 14:38 hours, 23 minutes behind schedule.

25. Greg Glass took over promptly, and addressed “our” ESI BB.

26. The first 13 minutes were spent acknowledging the BB was successful and watched by journalists.  Then there was a review of who the Cambridge Six were, and what they wanted from ESI.

27. Following this, we were presented with the argument that ESI believes the UK investment market is not well served by brokers and the broker sector. ESI looks to remedy this, and fill a gap in the market.

28. ESI’s object is to provide on-line investing as an alternative to the established market. The role of the Product Manager is to maximise the revenue from the customer that ESI obtains for supplying its product.

29. 42 minutes later, at 15:20, we agreed the meeting was not going well.  We said that so far, we felt ESI had learned more about us than what we had learned about ESI.

30. Where specific points had been raised such as providing trade tracking and histories, the ESI response was it should not be provided because the information might not be accurate. Further, such services may not generate revenue for ESI and hence not worth their while investing in providing it. It was suggested and agreed that the “ESI vote” section of the ESI web site might assist in determining policy.

31. This led on to where ESI consider they are market leaders, by providing services to the market before and better than their competition.

32. However, by 15:35 we made the point that we had nothing to show for our meeting so far that indicated how ESI was to counter the concerns of its  existing users. At that point, ESI asked us “How many users do we speak for when we request extra facilities such as price data?”

33. We had been told NDA details about the E*Trade launch and what might in due course be included in E*Trade UK, how ESI assured it would be reliable on launch, how it would be innovative, and everyone would be looking at it by then.

34. ESI were very clear on what they are bringing to the market with E*Trade UK.  Unfortunately, even with the NDA, they were not able to tell us.

35. Our point was we were there to find out what was happening regarding the present service.  Any add-ons we wanted, said ESI, depended on whether it would bring in additional revenue or users.

36. Running exactly 75 minutes behind schedule, we were invited to inspect the newly relocated computer room at 16:00hrs.  The investment in new infrastructure for the new E*Trade UK service seemed very impressive, but the technical details are covered by the terms of the NDA.

37. We left that area ten minutes later, and requested a private discussion to consider the meeting so far over coffee at 16:10.

38. We spent 15 minutes in private discussion, concluding everything is being emphasised on promises for the future.

39. David Robinson’s Service Reliability and Technical Session scheduled for 15:15 started at 16:35.

40. After his introductory courtesies, we asked: What were the reasons behind the problems the ESI site has suffered over the last 6 months, and how can we be assured that such problems will not occur again?

41. We did not get the reassurances we were looking for at that point, as David suggested all would become clear during his presentation.

42. The presentation described the methodology how E*Trade UK’s new computer system had been designed with a scalable system, quality hardware and software, and quality control etc.  It did not really address reliability issues on the current ESI system.

43. The problems with the current ESI site are being caused by more users.  ESI installed more powerful servers, but the then-current architecture was not easily scaleable.

44. Last weekend (20/21 March), the site was down for a day in order to install some performance enhancing upgrades we were told about at our visit.

45. ESI are resolving all these problems by a new appointment making one person in the company responsible for satisfaction and implementing a Quality Management Policy.  The new employee will report to the Head of Compliance and Finance.

46. There will be changes over the next few months with increasing use of more high quality hardware and software.

47. New charting software has been written for release with the launch of E*Trade UK.

48. We will be getting our solutions later, but they will be better and more thought-out.

49. ESI could not improve on the physical constraints of the demand on the system before.  Now they can buy a bigger and better box and just plug more servers in.  There is now ample spare capacity and ESI will in future always have ample spare capacity, due to the scaleable nature of the new system.

50. The customer service availability from 0800 – 1800 will remain unchanged.

51. Technical support availability will be increased from the present 0800 – 1800 to 0700 – 2200.

52. Points we discussed included the possibility of engineers having pagers, back up and stand by equipment, and increased service to the site because subscribers in different time zones will be accessing it. Everything still has to be worked out in detail.

53. The new overall position is that there is a completely unified system now.  This is all thanks to going into trading where the information side of the site will get advantages.  They are discussing call-out rotas and relevant remuneration terms with the staff now.

54. We raised the question about the live data service being actually live. The data is live when it gets to ESI, but then ESI software internal processing may delay its publication. We mentioned references to tests detailed on BB threads, which ESI will look into.

55. The computer equipment is now in its new room, neatly racked, and an improvement on its previous location.

56. Problems – if they occur – will be dealt with by an imminent Business Continuity Provider contract.  The site will be very reliable because there is a mass of procedural instruction documentation.  As the systems will be documented, ESI will recover from any minor problem as quickly as possible.

57. On the day E*Trade is launched, ESI users will be able to move over at the user’s own pace.

58. At 17:27 (1 hour and 42 minutes behind schedule) we started to put specific points.

59. Q. Will there be customer refunds for downtime etc?

60. A. No one else provides this to ESI’s knowledge.

61. Q. Will there be 24 hour x 7 day service / maintenance cover?

62. A. ESI is working towards different levels of criticality of various elements of the service.  There is no short-term promise to improve response to unscheduled down time.  At 0300hrs, a fault is not critical.  If a problem exists, the engineers will start to look at it at 0700hrs. There is no guarantee that it will be fixed by market opening. Better service is not justified under commercial decisions.

63. Q. Is there an uptime target like 99.?? %

64. A. Setting an uptime target is too complex.  As to site availability, they will be monitored by E*Trade as part of the franchise agreement.  E*Trade will revoke their license if they perform too badly.

65. Q/A ESI indicated there will be little or no improvement in the information service and (in view of the NDA points) thus implied existing information services on the site are not guaranteed to continue.

66. Q. What about service to subscribers who do their market research etc. at weekends for time or net access reasons?

67. A. It is not critical to have such facilities available or to restore them at such times.

68. Q. Has ESI considered becoming an ISP to improve access speed?

69. A. We looked at it some time ago. It is pretty pricey.

70. Q. Is there differentiation between user levels and response speeds, or can it be provided?  (viz., are the Subscribers’ facilities being slowed down by demand from free users?)

71. A. Requests are differentiated by application type (eg charts, Stockwatch etc), not by subscription level.

72. Q. Has ESI considered cable modem access?

73. A. We are looking at it.

74. Q. Has ESI considered tick by tick share price updates?

75. A. Multicast is an unreliable delivery product.
A Reuters’s solution would be very expensive.
The solution would be expensive.
E*Trade do not provide share trades in the USA.

76. Q. What about Share Alerts?

77. A. We will use the E*Trade package but we are not developing these ourselves.

78. Q. What about a ticker ribbon?

79. A. ESI agreed the BBC one is a good feature, and will look into it.

80. Q. What about indicating % change in prices?

81. A. This is in the pipeline.
 

82. Q. What about Stockwatch arrows?

83. A. A matter of customer preference.

84. Q. What about expanding Stockwatches?

85. A. This is a cost problem.

86. Q. What about yearly highs-lows?

87. A. Coming in Fundamentals page of the new E*Trade UK system.

88. Q. What is ESI approach to stock trade tracking and add-ons?

89. A. ESI completely frowns on anyone doing that and publishing data          because they might miss some.  ESI has to comply with relevant specifications and they cannot run the risk of developing something that might not comply.

90. Q. What is ESI’s approach to adding any new features?

91. A. Has to fit in with ESI’s trading policies including
Trading
Regulatory
Best Commercial Return.
Who wants it, what do they want, how much are they prepared to pay for it, we might look at it.

92. Q. Delays on News?  RNS is not real time.

93. A. ESI will look into this.

94. Q/A Alert flags on announcements/news?  Regulatory announcement flags come from the LSE. Ask them about it.

95. Q. Save 6p-type postings and postings-on. / News Copyright.  Is it legal?

96. A. AFX do not want their posts in the public domain.  RNS are in the same position.

97. Q/A  AFX news reporting impartiality questioned.  ESI are looking at other news feeds.
 
 
 

98. Q. The charts are not fully interactive. You can’t draw lines on them.

99. A. The charts will not be fully interactive. It is ESI policy not to use Java applets and the like in Web Pages.

100. Q. What about adjustments for stock splits?

101. A. We are looking at it.

102. Q. What about updating the charts daily?

103. A. This will be done for sure with the new software and database coming with E*Trade.

104. Q. What will E*Trade service be like?

105. A. It will have the capacity and it will work because the SFA will check it out, and a firm of consultants will be involved.  ESI will run in parallel with E*Trade.

106. Q. What is the access policy to the BB?

107. A. The BB is valuable to ESI. It strongly distinguishes between ESI and other sites.  There will not be a free access policy.  Access will be by subscription or by opening a trading account.

108. Q. What about a real time chat room?

109. A. We will consider it.

110. Q. What about a BB search for post by contributor?

111. A. We are not keen on users being identified and having their posts quoted back at them.

112. Q. What about a BB noise/member filter?

113. A. E*Trade have this.

114. Q. What about an indicator or technology to indicate the number of new, unread posts to a thread, and the total number of postings?

115. A. (Discussed – no definite answer noted.)
 
 

116. Q. What are better ways to make awareness of service announcements/User forum etc?

117. A.  This was discussed – Customer Support is now posting directly on the BB, and they are reviewing the matter.

118. Q. What is policy on editing/deleting unacceptable postings?

119. A. (Discussed – general consensus not to be done except in individual cases if need arose.)

120. Q. What about providing Options information?

121. A. Not sufficient demand.

122. Q. What about providing Brokers’ stock briefs?

123. A. We will provide them if you pay for them.

124. Q. What about providing information like reporting dates downloadable under contract from other information providers?

125. A. We consider the Fundamentals information is pretty good as it is. ESI would not fiddle with data – it must be supplied intact.

126. Q. Does ESI sell mailing lists?

127. A. Mailing lists are not going to be sold.

128. Q. What about advertising on the BB and Stockwatch?

129. A. We agree these are trading tools and will reconsider our policy on adverts there.

130. Q. What is ESI’s approach to us running the BB ourselves?

131. A. Why? Like minded people on the BB police and control it. ESI just sits back but it is an essential part of the ESI product.  The value of the BB is the people who are there who have been brought together by the ESI product.

132.  (Response)
ESI is horrified we would go off and do our own BB – The BB is ESI’s Jewel in the Crown.
 
 

133. Q. How will E*Trade affect the ESI site, response and services?

134. A. E*Trade is going to be gradually phased in and kept within volume and user constraints.

135. Q. What about an ESI User Forum?

136. A. ESI is very happy to have an open group and an open agenda. Quarterly meetings suggested?  Topics:

137. A route for feedback?
Why don’t ESI read the BB?
No one is paid to spend the time at ESI reading all the BB

138. Public threads raised with ESI?
More awareness of user and service announcements?
(Customer Services posted on the BB regarding the downtime last weekend.  Thank you)
 
 

As it was after 1900hrs by this point, we exchanged thanks and departed.
 

Some additional points that arose, not in chronological order but considered significant by one or more members of this group:

139. The present system of refreshing or posting to a BB thread retrieves the whole thread and can take a long time. ESI agreed this was a design shortcoming and will look into it.

140. We wonder if about 25% of ESI subscribers are outside the UK, lending power to the argument for increased out-of-hours service cover.

141. ESI admitted they had now stopped advertising the “ESI” brand as it will be replaced with the E*Trade UK brand.

142. We are concerned a hostile BB response might develop as a result of our meeting.  Specifically, subscribers who consider their fees are good value for money, and who do not object to advertising, may feel their views are not being represented.
 

143. ESI’s current Advertising policy thoughts are:

144. Free users will have banners.

145. Subscribers will have adverts but ESI will consider small static adverts, small banners and no Java.

146. ESI consider that Stockwatch pages may contain these small static adverts.
 
 

CONCLUSION
 

147. Collectively, we think it is fair to highlight the fact that the commercial objectives of ESI appear to be geared very heavily to the procurement of new trading business, and they gave us the impression that requirements of existing users are a secondary concern.

148. However, not all members of the Six rely on ESI for their trading information and some members’ demands and expectations are lower than others are.  In presenting a collective opinion, it is fair to say on behalf of the 'investor/bronze' subscribers within the Six, there is the feeling they can “live with” the service ESI are providing at the moment. The Six have therefore represented those on the BB who have not expressed particular dissatisfaction.
 
 

This Report was submitted to ESI for their comments on 22 March.
We await their reply.
 

“THE CAMBRIDGE SIX”
28 March 1999