BSO Network Solutions is planning to extend its low latency trading network into South America, implement its cloud-based trading infrastructure platform within exchanges, and provide a MiFID II compliant time stamping solution.
While the company is building out its business with services and solutions, its career started in connectivity, when college friends Michael Ourabah and Charles-Antoine Beyney decided to build a global network. Based in Paris, they started with a metro network for the city before moving on to connect 12 data centre using leased lines. Clients in France encouraged them to build connectivity to London, Amsterdam, Frankfurt, New York and Toronto. A year later, in 2004, and still in college, Ourabah and Beyney had achieved revenue of €1 million and decided they needed to set up a business with a strategy.
BSO Network Solutions opened its first office in Paris in 2004, a second office in London in 2007 and has since gone on to open offices in New York and Hong Kong. Its aim was, and still is, to help trading clients reach emerging markets such as Tokyo, Mumbai, Dubai and Johannesburg at exceptional low-latency speeds. It also covers more commoditised routes such as London to New York and New York to Chicago to ensure a complete route.
Ourabah explains: “Soon after we opened our London office, financial firms began to move into algo and high frequency trading. We saw this coming, but the big telecom operators weren’t ready, they had low-latency routes but they were not built specifically for finance customers. Our IP is knowledge of all the fibre in the world, which means we can deploy the best low-latency networks for algo and high frequency traders in the financial community. We offer low-latency connectivity from established markets to exchanges in emerging markets, as well as services such as cloud computing and managed services that support clients’ trading infrastructure requirements.”
BSO Network Solutions has a global network of 75 data centres, points of presence in more than 35 countries and about 100 routes between them. It builds out its low-latency network by looking at the most direct routes to emerging markets’ exchanges and buys fibre from the best domestic providers, often using a number of carriers to reach venues such as Moscow or Mumbai. The company’s primary focus is on fibre and it does not invest heavily in ultra-low latency microwave networks, but it takes a tactical view and includes portions of wireless connectivity brought from other companies where necessary. It is also looking at the potential of millimetre wave technology to cover short distances.
While much of the company’s value is in its extensive network, building connectivity into emerging markets is not always easy. Ourabah says: “There is fibre in the ground everywhere, but operating it, connecting fibre belonging to competing companies and managing regulation is challenging. But this is what we do and we have enough clients to make sense of running the network. We also have enough scale to act as a barrier to entry for competitors.”
While BSO Network Solutions can offer lower speed than traditional carriers on some commodity low-latency trading routes, its specialism is in low-latency routes to and between emerging markets. By way of example, it offers round trips from Singapore to Sydney in 90.1 milliseconds, London to Tokyo in 156 milliseconds and London to
Mumbai in 109 milliseconds. Its clients include data vendors, trading solutions providers such as Fidessa and Ffastfill, and financial services firms including Rabobank and Tradition.
BSO Network Solutions’ next network extension is likely to be into South America, where it is looking at routes into Mexico, Argentina and Brazil. Ourabah comments: “There is fibre in the ground, we just have to find the best and build more where necessary. It usually takes about 18 months from deciding on a location to getting the network there.”
Looking forward, the company is planning to move its on demand cloud platform that provides firms with trading infrastructure and is implemented in data centres in New York, London, Paris, Hong Kong and Singapore into local exchanges. Ourabah says: “Many firms are hesitant about going into new markets because of the cost, but if they use our cloud solution they can do it at a nominal monthly fee. Firms can also test new strategies before moving them onto a production platform.”
Its plan for a time stamping solution that is compliant with MiFID II requirements brings together its networking and low latency capabilities to provide a complete time stamp and data retention solution that is expected to come to market within the next couple of months.