Wednesday, June 1, 2011

Real-World Financial Services Cloud

Cloud computing has been made very real today.

As I subtly alluded-to in March, The New York Stock Exchange (NYSE Euronext) today launched their Capital Markets Community Platform (CMCP) along with partners EMC and VMware. It's essentially a high-performance, low-latency, special-purpose cloud IaaS, replete with customers and roadmap. Register Coverage  FIN Alternatives Coverage

This is a very notable event for a few reasons:
  • Cloud is not a commodity: Unlike general-purpose public clouds, NYSE has constructed a high-performance, low-latency infrastructure to meet the specific needs of trading firms. From these perspectives alone, use of a public cloud (AMZN, RAX, etc.) would never meet the stringent performance requirements. My belief is that we'll see even more of these industry-specific clouds arise. Differentiators will likely vary based on needs for performance, privacy, security, scale, etc.
  • Cloud is highly reliable:  A lingering question has been whether the cloud - and associated automation controls - was reliable enough for mission-critical applications. NYSE is no stranger to Financial-Markets levels of reliability, and has clearly taken great pains to ensure that their experience carries-over to the CMCP.
  • Cloud is highly secure: Ditto to above. the CMCP is accessible to customers only via a highly-secure network and only to pre-validated users.
  • Cloud enables new forms of business: For me, this is the most exciting aspect. NYSE's cloud now allows small firms (picture 3 hedge fund managers and their dog in a garage) to take advantage of enterprise-grade hardware and data... say to test and run new trading algorithms. Access to resources such as this would have been far outside of the reaches of the small firm.
  • The Cloud + Big Data story is real: What's also nifty about NYSE's implementation plan is that it allows users to create DB's on demand, and will allow users to access massive data in the form of market play-backs.  This DBaaS will obviate the need for tenants to replicate TB or even PB of data as they test algorithms against historic market data.
NYSE's partnered with EMC and VMware to construct the cloud, and VMW has also posted an excellent Blog on the topic. A few excerpts:
"So, why is this better, and why is NYSE Technologies the right organization to deliver? For hedge funds and other buy-side firms, their value isn't in integrating compute, storage, networks and security -- it's in analytics, trading strategies, algorithms, application strategies and other proprietary expertise. The NYSE service means those IT organizations no longer have to struggle with integrating data dumps and feeds into their infrastructure and operations. Trade execution speed can be critical, so physical location and proximity to the market matters. NYSE's experience in operating large scale, mission-critical VMware-based infrastructure -- the NYSE and Euronext exchanges -- is unquestionable....
"...NYSE represents an alternative cloud future: one that contains a vibrant ecosystem of clouds, both internal IT departments and external cloud service providers, with unique understanding and focus on customer needs, married with the ability to deliver through scalable, on-demand and trustworthy IT services. What internal IT organizations and cloud providers like NYSE share is a rejection of the concept of an inflexible cloud monoculture. Instead, they choose to build high performance, secure and scalable infrastructure because it meets critical business needs. They obsessively focus on value delivered to the customer and never confuse that with cost of service.
And that's it. Cloud is now about Value, even more than it has ever been about cost reduction.

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