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Evolution Of Databases – A Fascinating Journey!

Evolution Of Databases

Published on Feb 14, 2019

‘A database is a collection of information that is organized so that it can be easily accessed, managed and updated.’

In ancient times, when there were no computers, data was recorded on paper. Everything was put down on ledgers or journals, which created endless archives containing hundreds of thousands of records filed in cabinets. Accessing or retrieving data from these records was a slow and difficult process strewn with problems. These issues ranged from misplaced records to fires, which wiped out entire archives and destroyed histories of societies, organizations, and governments. Furthermore, data security was a big threat as it was easy to gain access to the data.

With the advances in technology, the records made in books were transferred to “database” libraries. Files are called records in databases, and the individual data elements in a record (e.g., name, phone number, birth date) are called fields. The main objective of any database is to ensure efficient storage and easy retrieval of data. Databases have not only brought transparency but have also broken down stereotypes.

Databases have become an integral part of everyday life. When we use ATMs to withdraw money or check our account balance, log in to social networking sites or engage in any digital interaction, we access a database. Even the most successful search engine, Google, is but a database that uses its self-developed database system ‘Bigtable.’

In this article, we will explore the spectrum of databases and the effect they have on our lives. We will also look into the inception and operations of some of the world’s largest financial database companies like Bloomberg, Refinitiv (earlier Thomson Reuters), and Factset.

Database Management System (DBMS) started to evolve when computers became a cost-effective option for private organizations to manage their work. Prior to this, DBMS was used in huge computers provided mostly to government offices and armies. Since then, DBMS has seen vast improvements in its structure. Below is the timeline that outlines in brief how the evolution of databases has been in the past few years:

Database management system

Database forms Year over year

Usage of databases: A large number of our daily activities depend on databases. From watching our favorite movies online to posting pictures on social media, we end up accessing a variety of databases through these activities, some of which are listed below:

  1. Online television streaming
  2. Social Gaming
  3. Personal cloud storage
  4. Sports
  5. Finances
  6. Government Organizations
  7. Social Media
  8. E-commerce
  9. Healthcare
  10. Weather

Financial Database Companies:

Financial database giants like Bloomberg, Thomson Reuters, Capital IQ, and Factset recognized the importance of financial data way ahead of others. For any investment banking company or equity research firm, historical data plays a crucial role in forming investment decisions. This is where financial data companies find their foothold and provide the most sought after financial information – ranging from historical or real-time pricing and volume figures to all the three statements of any company. Most of them cover all asset classes. Their services range from technical analysis, news reports, and financial advisory to customer support. The most significant player in this market is Bloomberg with a market share of 33% and revenue of approximately $10 billion (2018). Following Bloomberg is Thomson Reuters with a market share of 23% and revenue of approximately $13 billion (2018). According to Forbes, the net worth of Bloomberg LP in the year 2018 stood at $54 billion and that of Thomson Reuters at $26.5 billion. While Bloomberg is a privately owned company, Thomson Reuters is a public entity. Capital IQ (5.6%) and Factset (4.2%) along with other companies comprise the rest of the share. Most of these companies use homegrown databases to avoid being controlled by any 3rd party database developers.

The reason we are talking about these companies is to understand the relevance and importance of the data that they are offering. Any company in the business of finance cannot imagine its operations without data – and data has to be bought from these database giants. Bloomberg charges $24,000 for its terminal per two years whereas Thomson Reuters takes $22,000 for the same period. Given these figures, you can imagine the quantum of money these companies make by just selling data. But being in this business requires them to stay updated with the latest developments in the market all the time. With competition being tough, these companies are constantly working on updating their databases to provide the best service to their clients.

For example, work is being done in the automation of databases. Recently Factset acquired Vermilion Software that has developed a program to address issues related to client reporting. The software is a web-based application and is capable of generating various reports such as valuations, investment reviews, factsheets, pitch books, etc. It uses audited data which resides in the system and is already approved. The idea is to reduce the time taken to generate these reports and improve efficiency.

Other than automation, considerable efforts are being made to make databases more secure. The much talked about ‘Blockchain’ is nothing but a database with a different core structure to make it more secure. In a database, a user (client) with permissions associated with his/her account can change entries that are stored on a centralized server. This way the master copy of the database gets updated by the administrator and all the other clients worldwide can view the updated version of the database. While on Blockchain, all clients have permissions to view and update every part of the information stored in the database. All clients have to work together as well, to ensure they are coming to same conclusions, making the network more secure and transparent. Thus data modification is almost impossible. As per a report by Forbes: ‘The Future Of Blockchain And Its Potential Impact On Our World,’ renowned companies like IBM, Eastman Kodak, and Spotify are already using & modifying Blockchain-based databases. Also, companies like Google, Goldman Sachs, Visa, and Deloitte have invested their money in projects related to Blockchain and its development. Of course, we have to wait and see before we jump to conclusions regarding the future of Blockchains.


Databases initially started as a means to store, protect, and easily retrieve data at a faster speed. Over time, the use of databases have been extended to aid in making banking, security, and investment decisions. Business intelligence systems help companies improve decision making based on real facts instead of guesswork. Big Data helps us mine insights from the data we have generated in the past. It is essential in understanding the society of the future. Without databases, we would be losing critical information and the digital revolution would not have taken place. Data will drive the next industrial revolution, and is surely set to transform the lives of consumers and businesses worldwide.