Prop shops diversifying their businesses

It's been going on for a few years, and it looks like it's intensifying. Prop shops such as Getco, Peak 6, Archelon, Hard Eight, Allston, and others are going more into customer based businesses such as internal hedge funds and services. This article discusses this trend. Is this proof that traditional prop trading activities such as market making are basically dead? With low volume and volatility and increased regulations, does prop trading have a viable future? Or will these shops basically turn into glorified hedge funds and asset management firms?

http://www.prop-trading.com/proprietary-trading-firms-seek-to-diversify…