It has been a full year since we first spoke to NYSE Euronext at the last VMworld Conference. We heard then about their Capital Markets Community Platform of vertical industry services cloud targeting the needs of Wall Street IT leaders.
As an early adopter of innovative cloud delivery and a groundbreaking cloud business model, we decided to go back and see how things have progressed at NYSE. We will learn now, a year on, how NYSE’s specialized cloud offerings have matured, how the business of the financial services industry has received them, and explore how providing cloud services as a business has evolved.
I’m Dana Gardner, Principal Analyst at Interarbor Solutions, and I’ll be your host throughout this series of VMware sponsored BriefingsDirect discussions. We’re joined by Feargal O’Sullivan, the Global Head of Alliances at NYSE Technologies. [Disclosure: VMware is a sponsor of BriefingsDirect podcasts.]
Download the podcast (24:21 minutes) or use the player:
Here are some excerpts:
Dana Gardner: Welcome to BriefingsDirect, Feargal.
Feargal O’Sullivan: Thank you very much, Dana. Nice to be here.
Gardner: Tell me how it’s going. The Capital Markets Community Platform, as we discussed, is a set of cloud services that you’re providing to other IT organizations to help them better support their companies and their customers. How have things progressed over the past year?
O’Sullivan: We’ve been very happy with the progress we’ve made over the past year. When we announced at VMworld last year, we had just gone into early access for our first clients in our data center in the New York, New Jersey, Connecticut tri-state area, where we have all of our US-based markets running the New York Stock Exchange Markets, the Arca Electronic Markets, and AMEX.
That has since gone into production, has a number of clients on it, is being perceived very well by the community, and is really driving as a linchpin of our strategy of building a global capital markets community.
Since the success of that, we’ve actually progressed further, to the point of having deployed the same environment in a second data center that we own and run just outside of London, in a town called Basildon, which is where we run all of our European markets, the Euronext side of NYSE Euronext.
We now have an equivalent VMware-based cloud environment and a range of ancillary services for the capital markets industry available in that location. Clients can now access, as a service, both infrastructure and platform capabilities in both of those facilities.
Furthermore, we’ve extended to two other financial centers in the world, one in Toronto and one in Tokyo. That’s a slightly more stripped-down version of the community platform, but it’s very useful for clients who are really expanding the business and gone globally.
Now, we have those four locations up and running in production with production clients, so we are very happy with that progress.
Gardner: That’s very impressive growth. In order to move this set of capabilities across these different geographies and in the data centers that you have created or acquired there has the whole software-defined datacenter model helped? I would think that in the older days — 10 or 15 years ago with individually supported applications on individual stacks of hardware and storage — that would have been a far more difficult expansion project.
So what is it about the way that we’re doing things now in the modern data center that’s allowed you to build out so quickly?
O’Sullivan: Clearly, the technology has advanced significantly from the old days. The capability around virtualization on the hardware server level with the VMware Hypervisors, and in particular the vCloud service, gives clients their own control over their environment.
Also on the networking side, it’s become much more viable for clients to actually deploy into shared environment, still maintaining confidence that they’re going to get both the security profile that they’re looking for, as well as the performance capability.
We use the EMC VNX array with the FAST Cache capability to give a very stable performance profile based on demand. It allows different workloads, and yet each gets very good performance and response time. So there are many components along the way. Also, management and monitoring of these types of infrastructures have improved.
Our clients have certainly seen that enhancement in the technology. The financial services industry is unique in the way it leverages technology on two aspects.
One, security profile is absolutely critical. Security isn’t just around customer data, but around application development and tools of the trade, intellectual property that firms might have, trading strategies, different analysis, analytics, and other types of components that they develop and build,. They feel they’re highly proprietary in nature and don’t want to allow anybody to get access to them. So they place security extremely high on the list.
The other unique aspect is performance aspect. It’s a slightly different performance model from your typical sort of three-tier web store type of environment. Financial services, first of all, push very high volumes of content through their applications. They need to do so in microseconds, or at least milliseconds, of response time and latency measurements, and they also most importantly need to do so predictably.
With a big batch job of some kind, say a genetic folding job, you drop off a job, go away for 12 hours, and you come back. A little bit of clearly inefficient processing time is not great, because that drags out the whole thing over time, but there is no sort of critical “need it here, need it now” requirement. So latency spikes are less of a problem.
But in our industry, latency spikes are a real problem. People look for predictive latency, so we had to make sure that we applied a very tight security profile to our cloud, and a very high performance profile as well.
Gardner: So as you’ve expanded across different market regions and brought this into more of your portfolio for more of your customers, have you also increased the services? Last time, we talked about some services that were very impressive, but how have you been able to build on this cloud in terms of those value-added services that you deliver specifically to a financial clientele?
O’Sullivan: That’s why we built our cloud, because there are many service providers who offer very valuable cloud capabilities that are based on core infrastructure and core computing capabilities, and they do so very well. However, we consider ourselves a vertical industry community. We’re specifically focused on capital markets participants. We try to support and make it cheaper, more cost-effective, and more readily accessible to a wider range of participants to be able to get access to the markets.
So in our cloud and our community, we provide a range of platform and services that we have added. The core is “Come into our vCloud Director environment and access your compute infrastructure.” By the way, we have a Compute On Demand Virtual Edition, we also have a Compute On Demand Physical Edition for those cases where that latency issue is of the utmost importance.
Then, we provide clients with the value-added features that we know they need, because they’re in the capital markets business. The key one is market data. This is something that is absolutely critical in financial services, because every trade, no matter what you are buying or selling, always starts with a quote. Even if you walk into the shop and you ask how much it would it be for a can of soda, they say it’s $1 or $1.20, whatever it is, and then you decide if you want to buy.
So in the financial services industry market data is the starting point, the driver of all the business. And the volumes on this, the sheer size of the content that comes down, is really outstanding. It’s at the point now that even if you were to just subscribe to all North American equities and options, you’d need a 10-gigabit Ethernet pipe, and at points during the day, you’re probably using upwards of 8 gigabits of that pipe just to get all that content.