Architects of Electronic Trading: Technology Leaders Who Are Shaping Today's Financial Markets

CHAPTER 12

Data Centers

Harnessing Networks

In the recent past, the collective industry decision to co-locate servers in data centers has profoundly impacted transactional speed. But many in the industry have taken a conscious decision to opt out of the latency “race to zero” and are focusing instead on developing alternative ways to generate alpha. The “trading smarter” trend is developing as an increasing number of market participants look to connect to a greater number of data inputs in an effort to enhance pre-trade decision making and gain an information edge. Data centers are cognizant of this sea change and are stepping up to help firms connect to a greater number of sources.

Data centers, especially the successful and densely populated ones, are the brick-and-mortar structures where meetups in the world of electronic markets are occurring. Savvy data centers are looking to utilize this fact to add value for customers. Looking forward, the data center is emerging as a broker of sorts, introducing customers to valuable new business relationships within their existing customer networks. John Knuff of Equinix provides his perspectives on the data center landscape and how they are adding value by fostering relationships between their customers.

Why are data centers so important in today's financial markets? They offer a number of products and services that add value throughout the trade cycle, including co-location and network connectivity. The widespread adoption of the data ...