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Challenges and Opportunities of Cloud Solutions in the Trading Environment

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Once a data security concern and now a popular processing option, cloud computing is becoming an integral element of trading infrastructure, but it does have limits when it comes to high-performance trading.

The potential of cloud technology in the trading environment was discussed recently during an A-Team Group webinar moderated by Intelligent Trading Technology editor Sarah Underwood and joined by Eric Karpman, an independent trading technology expert; Will Winzor-Saile, an execution analyst at Redburn; Bill Fenick, head of strategy and marketing for financial services at Interxion; and Steven Schiff, head of platform capabilities at Thomson Reuters.

The panel noted ongoing adoption of cloud technology and suggested firms new to the technology should start simply and scale in future. Karpman explained: “Start by analysing your environment and identifying best areas for cloud. It could be that proprietary data is best kept in the enterprise and market data and other public data in the cloud. It’s also important to consider performance requirements and scalability.”

An early poll of the webinar audience showed significant uptake of cloud solutions for trading purposes, while a second poll noted implementation challenges including integration with existing systems, data security worries, and lack of management buy-in and budget.

Adding to these challenges, the panel noted the problems of using cloud for high-performance trading, particularly determinism and consistent ultra-low latency. Winzor-Saile said: “You need to be clear about what you are trying to achieve. Very low latency and determinism can’t be delivered by the cloud, but other solutions such as analytics and machine learning lend themselves well to the cloud.” A hybrid solution can work here, with Fenick describing the possibility of keeping some data processing in-house or in a data centre and connecting to internet cloud providers using a leased line.

Cloud technology may not meet the needs of high-performance trading, but it certainly offers benefits and opportunities in other respects. A final poll of the webinar audience showed 87% of respondents expecting the use of cloud to reduce trading costs. Some 80% said cloud offered the agility to respond to change, 47% noted the benefit of competitive advantage and 20% an improved trading process.

Fenick concluded: “Everyone sees the upside of cloud and everyone wants everything as a service rather than as application downloads. Customers are pushing vendors for this, and as the poll results show, cloud is delivering cost efficiency, agility and better time to market.”

Listen to the webinar recording to find out about:

  • The potential of cloud
  • How to get started
  • Technology solutions
  • Cloud limitations
  • Beneficial outcomes
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