Part 5: Data Licensing — Questions to Ask Before Signing with a Middle Office Provider

As the investment landscape becomes more data-driven, middle office providers are no longer just operational partners, they are data partners. The way a provider handles data licensing, pricing, and change management can have long-term implications on client margins, scalability, and competitiveness. Before signing an agreement, firms should go beyond technical capabilities and probe how the provider treats data ownership, communication, and partnership alignment.

Pricing, Scale, and Margin Impact

Data licensing introduces a different economic model, one that can erode margins if not clearly understood upfront.

• If fees are passed through to end clients, are they competitive with market expectations, or could pricing variance make us less competitive?
• How will these data licensing fees impact our long-term margin profile as we scale, could they compress profitability over time?
• Does your pricing model scale in a way that aligns with our growth and client acquisition strategy, or does it penalize scale?

Understanding these dynamics early helps firms avoid pricing surprises that surface only after assets and data consumption grow.

Security, Compliance, and Data Governance

Licensed data must be handled with the same rigor as trade execution and valuation workflows.

• How is client data stored, transmitted, and protected, and does that architecture meet institutional standards?
• Are you SOC 1 and/or SOC 2 audited, and how often are certifications renewed?
• What does your business continuity and disaster recovery (BCP/DR) framework include for data services?

Change Management and Incident Response

Data access, feeds, and entitlements evolve over time. How those changes are handled determines operational stability.

• What is your change management process, including how changes are communicated, tested, and implemented?
• Do you have an incident management team dedicated to production issues or outages? Who triggers that team, and what does the escalation path look like?
• What SLAs apply specifically to data feeds and entitlements, and how are they enforced?

Providers that treat change management as a governance function deliver more predictable outcomes.

Client Alignment and Community

Strong data platforms are shaped by their user community, not just a vendor roadmap.

• Can you provide references from firms similar to ours that use your data licensing model in a comparable way?
• Do you have a user group or client advisory council that we can join?
• How is client input incorporated into your product or data roadmap, and how do clients influence prioritization?

This is where true partnership comes into focus — clients should feel heard, not just onboarded.

Strategic Partnership vs. Transactional Vendor

Data licensing isn’t a one-time commercial agreement — it's an ongoing engagement that affects GTM alignment and long-term delivery.

• Do you view this as a strategic partnership or a standard contractual relationship?
• If it’s a partnership, how will we ensure ongoing collaboration between GTM teams on both sides, including feedback loops, pipeline visibility, and co-market alignment?
• What areas should we pay close attention to during onboarding to ensure a seamless transition into production?

The providers that stand out are those who see data licensing not as a billing construct, but as the foundation of a joint growth strategy.

As this series comes to a close, one theme stands out: selecting a middle office provider isn’t just about operational efficiency, it’s about choosing a partner that aligns culturally, strategically, operationally, and economically. Data licensing is where all of these elements converge. The firms that ask the right questions at this stage protect their margins, preserve their strategic flexibility, and position themselves to scale with confidence.