Guest Contributor: Mike Wilkins, Industry Expert
Cloud computing’s impact on financial technology is at the forefront of everyone’s mind these days, from the pinstriped bankers on Wall Street to the hoodie and jeans crowd on LaSalle Street. As the geek humor bit goes, we all know the cloud’s gone mainstream when Microsoft is running commercials touting its benefits.
While the cloud’s impact is measurable, there’s no doubt that in some areas it’s more quantifiable than in others. Some reservations definitely remain about security, latency and just how limitless its power really is. But there’s little doubt that in one area that’s seen rapid acceptance is in market data applications for the buy side. Why this area, where players are generally so secretive about what they use and why they use it? Pretty clear reasoning, and pretty easy to remember too:
It’s cheap. Even with the economic turmoil of the past few years fading into the rearview, firms all across the spectrum are still in cost-cutting mode. Market data infrastructure which historically has required (expensive) robust hardware, (expensive) fast pipes and a large chunk of (expensive) internal resource man-hours to support it can now be provided over the Internet on an on-demand basis. Let someone else balance the server loads and upgrade the software.
Firms are consolidating. There’s many sources of market data out there—big and small. But even the big names can’t always provide data from more obscure sources—be it CDS prices or Bulgarian equity research—in one single location. Users are often forced to run multiple market data applications, hogging valuable screen real estate on what’s invariably a crowded landscape. Cloud-based data apps bring these disparate sources together.
Cloud-based data is easy to carry. It’s a simple fact—firms grow. Often when they grow, they move—both their physical location and often their data center architecture. Why go through the hassle and expense of breaking down, moving, and reconfiguring market data servers when all that data can be accessed from anywhere? Also, let’s face it—traders like to travel. With a cloud based solution, they can access their market data needs and layouts from a ski chalet, poolside in Vegas, or wherever else their travels take them.
It’s pretty clear that the buyside is embracing the market data cloud. What other specific niches do YOU see readily adopting it?