Todayâs financial markets firms spend $1.8 billion annually on data center space, power and cooling. The report examines the evolving role of data centers in financial markets firms from a utility function to a strategic component of a firmâs trading strategy and provides an analysis of the most important data center decision criteria for a spectrum of trading strategies. Although low latency is a key attribute, the TABB Group found that 82% of participants surveyed reported that incremental power was their most pressing concern when selecting data center space. It finds that the ability to support high power densities in combination with good connectivity to leading market providers via low latency network infrastructure is a winning combination for the vast majority of firms.
âTrading has changed dramatically since the time of the ticker tape. We now live in a world when a millisecond can cost or make millions and trading and information volumes are exploding,â said John Panzica, Vice President of Switch and Dataâs Financial Services Practice. âThis report provides valuable information on the benefits that data centers provide for pre- and post-trade service providers and buy and sell side communities in the equity, options, futures and currency markets.â
While power, space, flexibility and speed are important concerns for all financial firms, the order of importance varies with the needs of the trader. âFinancial Services Data Centers: Power, Proximity and Profit,â provides insight on assessing financial services companiesâ data center needs to help determine the best investment strategy. A major derivates dealer may require a power rich environment for its compute intensive infrastructure, necessary to perform the complex valuations for pricing and risk management. On the other hand, a sell side broker in markets with tight spreads and fast execution may require an ultra low latency environment and be willing to pay a high price for proximity colocation. Whatever a firmâs needs, this report can help it gain perspective on the relative value it should place on these factors when choosing a data center solution.
Switch and Data recently introduced its Financial Services Practice to help financial services companies design, develop, and deploy infrastructure solutions to meet their ever-growing low-latency connectivity, space and power needs in North America's leading financial centers.