NYSE Euronext fluffs financial cloud
Amazon for hedge funds
NYSE Technologies – the research, development, and IT operations arm of the NYSE Euronext exchanges in New York and London – has fluffed up a cloud specifically for trading firms.
Saying so won't generate much sympathy among the proles, but trading volumes on Wall Street and in the City are down, and profits for brokerage houses, buy-side and sell-side firms, and hedge funds are down as well. That means the myriad companies in the financial services food chain are under pressure to reduce costs as much as possible.
For such firms, IT expenses, telecom, and data services eat up the biggest part of the budget, and that is why, back in December 2010, NYSE Euronext decided to sit down with storage and security software giant EMC and its virtualization minion, VMware, to hammer out the specs for a cloud aimed specifically at the exchange's existing customers.
The cloud, known as the Capital Markets Community Platform, is not intended to replace the bare-metal trading systems that banks, hedge funds, and other financial players park inside NYSE Euronext's data centers, explained Stanley Young, CEO at NYSE Technologies, at a press conference at the New York Stock Exchange today.
Rather, the financial cloud is intended to augment the low-latency, co-location platforms that financial firms plunk into NYSE's data centers. (One 100,000-square-footer is located outside of New York in Mahwah, New Jersey, and the other 70,000-square-footer is in Basildon, east of London. These two centers have hundreds of thousands of servers hosting trading systems, the company says).
The cloud is designed for batch processing for statements, regulatory filings, testing of algorithms against historical data and the prior day's trading data, and other analytics where I/O latency is not crucial.
There are a number of benefits to using the cloud, Jarrod Yuster, CEO at Pico Quantitative Trading and one of the beta testers for the financial cloud, tells El Reg. For one thing, a lot of financial firms get access to the day's trading data at 11:30 PM local time for the NYSE or Euronext markets, and then begin downloading that data across high-speed (and expensive) wide area network links to their own data centers. This download process takes many hours and lots of dough.
But if you locate the analytical applications that chew on the data inside the NYSE Euronext data centers, you can access the data locally using the Secure Financial Transaction Infrastructure (SFTI) network backbone that the exchange operator uses to link other exchanges, its 1,250 customers, and other market centers into its trading engines and data aggregation services. This backbone is used to create the NYSE Superfeed, which is an aggregation of 170 high-speed exchange and aggregated market data feed handlers. The biggest banks in the world have 80GB/sec pipes (that is bytes, not bits) into the SFTI network, according to Young.