|Image courtesy of|
Euromoney InstitutionalInvestor PLC.
Recently I was interviewed by FOW magazine about the growing adoption of cloud computing in finance and trading. As we are both a provider and consumer of cloud services, we have an interesting, credible perspective.
Our next-generation trading platform, which we are simply calling TT, is delivered via software-as-a-service (SaaS) and underpinned in part by third-party cloud services. FOW’s questions were provocative and on point given the many conversations I and others at TT have held with our customers in preparation for launching our next-gen platform. I thought it was worth recapping the interview in a two-part post for our blog readers.
Part one is below. Look for part two here next week.
FOW: What demands are you seeing from clients that reflect the current trends/state of play in the market?
MM: Our customers continue to put downward pressure on trading technology costs while demanding expansion into new markets; these seem to be perpetual trends. Outsourcing of the trading infrastructure is now a more attractive option due to the lower cost of a shared solution and the reach of networks into global markets. Moreover, a larger pool of firms now sees outsourcing as an attractive option due to the ubiquity of low-latency performance, improved understanding of security in the cloud and increased reliability of cloud solutions.
There will still be those that keep solutions in house. One example is the ultra-low-latency firm executing arbitrage strategies that are fundamentally based on the speed of information and the ability to execute trades against that information ahead of everyone else. But in general, we expect the number of firms in-sourcing their execution platforms will continue to dwindle as the cost of maintaining a competitive speed advantage on in-house platforms continues to rise exponentially.