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Trading Hubs Reach for the Clouds

Published in Automated Trader Magazine Issue 17 Q2 2010

The e-trading landscape is being radically transformed by two irresistible forces: proximity trading and cloud computing. Together they create rich opportunities for e-services providers. So what are the drivers and how can firms stay ahead of the curve?

If latency is the question, is co-location the answer? Possibly, yes, but the equation is not quite that simple. Proximity hosting at a data centre delivers a near-optimum solution, especially if the data centre also plays host to one or more trading-venue matching engines and access points. Proximity hosting is also a growth industry, with the trading 'map' being redrawn as more and more square-footage of floor space opens up in key locations. You can effectively outsource many of your connectivity issues to a data centre.

And yet that's not quite the whole story. Proximity hosting levels the playing field at near-zero latency, but in doing so, it brings to prominence another issue: capacity. It may be crucial to stay ahead at peak times, but what do you do with all that capacity when nothing much is happening? Flexibility is key, and cloud computing offers a flexible solution. Now, the only question is: what about volatility? We're not talking about "capacity delivery latency" here, are we?

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