As firms and data vendors increasingly look into migrating their market data infrastructures towards the cloud, which types of data are best suited to cloud delivery and what are the business use cases? What kind of cloud options are available and how can firms best utilise them? And what challenges do they face along the way?
These are just some of the questions that were discussed at a recent A-Team Group webinar, ‘Approaches to migrating market data to the cloud to drive agility in trading operations’, featuring panellists Richard Croucher, Distinguished Engineer, VP – Global Head of Engineering, Specialised Infrastructure at Barclays; Peter Williams, Chief Technology Officer at CJC; Mark Etherington, Chief Technology Officer at Crux Informatics; Matthew Lempriere, Head of UK, Middle East & Asia Pacific at BSO; and Matt Eddy, Head of Enterprise Integration Proposition at Refinitiv.
A number of topics were debated during the webinar, including whether the public cloud is actually a viable proposition for delivery of real-time market data. The general consensus was not yet, particularly for latency-sensitive market participants such as high-frequency trading (HFT) firms, who will always need their trading servers to be as close as possible to exchange matching engines when ingesting market data. Firms such as these also use dedicated, accelerated hardware for market data processing, which is unlikely to fit into a generic public cloud infrastructure anytime soon.
Panellists also raised the issue of fairness. Traditionally, market data vendors have used multicast to send data to everyone at the same time, whereas cloud providers generally manage their networks using software-defined networking (SDN) and flow-based management. As the two are not compatible, it means that service providers will have to make fundamental changes to their networks in order to address this issue. The question of how willing they are to do that remained open.
Webinar attendees were polled regarding internal barriers they face when migrating market data and other mission critical information to cloud based environments. The biggest barrier – by some margin – was sensitivity around managing data ‘out-of-house’, although the proverbial ‘turkeys voting for Christmas’ analogy springs to mind.
There are other challenges too. Panellists discussed the issue of entitlements management, which needs to be robust if data vendors are to keep control of who can see and use their data in a cloud-based environment. This is not just a matter of technology however, it also raises important commercial and contractual questions. But although panellists agreed that market data licensing needs a revamp to cater for cloud delivery, it was also pointed out that there remain many vested interests in maintaining the status quo.
From a technology standpoint, panellists discussed the benefits of architecting around extensible open-source platforms like Kubernetes for managing containerised workloads and services. Such platforms can provide a normalisation layer, enabling firms to much more easily move their applications across to a hybrid or fully cloud-hosted environment.
The webinar concluded with a discussion of practical steps that firms can take when migrating market data to the cloud, and some pitfalls to avoid.
First, don’t just ‘lift and shift’. If goals and benefits are not targeted effectively, firms could potentially end up with no benefits and only risks, lifting and shifting their problems, when what they really need to do is understand their business drivers, and have clear targets for their outcomes.
Second, start now. Run some proof of concepts, analyse the application base, work out requirements around complexity, and prioritise. And then work through what is needed in terms of logistics and connectivity.
Third, make applications agnostic, so that on-prem systems can match the cloud platforms as closely as possible. That way, firms can be ready to move things to the right place at the right time.
And finally, as an industry, we need to better engage with the regulators, and educate them on the technology that is available, how it works and how it can be used.