New York Security Exchange pun dah mula guna Cloud Platform
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NYSE Technologies launches cloud platform
By Philip Stafford in London and Telis Demos in New York
The technology services arm of NYSE Euronext has launched an industry-first cloud computing platform for trading groups to enable outsourcing of more of their operations to the exchange’s data centres.
NYSE Technologies has teamed up with VMware, the virtualisation software group, and EMC, the US data storage provider, to create a platform that will allow financial institutions to outsource more of their trading infrastructure to the “cloud” via the internet.
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The move is the first time a recognised exchange has made a play to grab this business and represents a fresh push by the exchanges operator to create a virtual trading hub encompassing large and small trading firms.
Trading firms and banks are seeking to outsource more business as they are increasingly pressured by the cost of maintaining cutting-edge technology and connectivity to new platforms amid signs of dwindling margins among high-frequency trading firms.
Other groups, such as Equinix, currently operate private hubs, where electronic exchanges and large traders can “co-locate” their systems and inexpensively share data and trading software and route orders to each others’ markets.
Commercial cloud computing services offered by Amazon and Google have also become ubiquitous in most corporate IT decision-making, but financial markets have been relatively slow to embrace cloud services. Fears over security and compliance have often outweighed the potential for huge cost savings.
NYSE Technologies is hoping its brand and reputation has far greater resonance to their clients than an ordinary third-party technology company.
“Order management systems, execution management systems, backtesting – so much of the flow can be contained with the physical walls of our data centre, reducing the time to trade,” said Stanley Young, chief executive of NYSE Technologies.
“These are not set-the-world-alight applications … but they lend themselves to virtualisation and take massive costs out of the industry,” he said.
The NYSE’s ‘cloud’ will provide trading data that can be used to test algorithms with NYSE market data, saving the time and expense of downloading the data to a separate centre. It can also host proprietary trading software, though firms can also opt to store the software on separate physical servers.
It will not be connected to the rest of the internet, but will allow its users to interact with each other. Carl Eschenbach, head of cloud systems at VMWare, called it a “community cloud”.
Michael Versace, global risk research director, IDC Financial Insights, said the move to cloud compting showed “a significant potential shift in how buy- and sell-side firms manage their technology costs and measure performance”.
“If these business services continue to evolve and provide value to the market, which we expect they will, we envision a number of similar partnerships and product opportunities coming to the financial services market over the next 6 to 12 months,” he said.
The move also represents a fresh push by NYSE Euronext to fill its new data centres in Mahwah, New Jersey, and Basildon, London, both expensive effort to offer faster trading through “co-location” and diversify revenues by offering technology services.
NYSE Technologies presently generates revenues of $460m, but has set a goal of $1bn in sales by 2015.
NYSE has already signed up Pico Quantitative Trading and Millennium Management LLC, a hedge fund, as its first customers for the platform. The US platform is expected to go live on July 1 although it is also planning to open similar hubs in Toronto, Sao Paolo and Tokyo.
Jarrod Yuster, chief executive of Pico, said that proprietary traders leaving banks, following the Dodd-Frank reforms, would find it cheaper to use cloud services to launch their own firms.
“In addition to these large firms in expense management mode, we’re also seeing a significant number of start-up traidng firms,” he said. “The NYSE’s cloud computing platform greatly reduces the barriers to entry for these start-up firms.”
This story has been updated. Pico is not a unit of Goldman Sachs; Goldman is a minority investor in the firm.
