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Q&A: Skyler’s Mike Vieyra on Market Data Management and LIBOR

Skyler Technology is a company that has re-invented itself since its early days as a complex event processing company from the San Francisco Bay Area, to focus on market data management – with some relevant technology for compliance in markets such as LIBOR – from a UK base.

IntelligentTradingTechnology.com spoke to CEO Mike Vieyra to find out more about the company’s direction.

Q: How has Skyler evolved since its formation in California in 2003? What is its focus these days?

A: Skyler’s move from California to London was prompted by a number of factors. Skyler’s technology is used to manage market data in capital markets; San Francisco isn’t the centre of this activity, so it made sense to locate the firm close to available management, sales, marketing and development expertise in financial services technology. Furthermore, being in London improves access to the market data operations at the large number of capital markets firms, including US ones, that operate there.

Q: What can you say about your current customer base, in terms of size and business segment?

A: Small but growing. The business segment is primarily sell-side firms with mature market data operations. Most of these are sell-side banks, but the segment also includes other financial market firms with market data operations such as spread betting, forex traders and derivatives traders.

Q: On your website, you list both products and technologies. What is the sales/deployment model you’re adopting?

A: We have found that marketing and selling products/solutions is much more effective than offering technologies. But our prospective customers still want to dig into the underlying technology to assure themselves of its capabilities and benefits.

In the last 18-24 months we have refined Skyler’s product set – it’s now much easier for us to identify potential customers, and also for the customer to recognise the problem our product solves.

We sell our own products directly; we are currently in conversation about licensing some of our technology to third-parties. We’ll announce these as and when each arrangement is concluded.

Skyler is a product company; we don’t offer implementation services. This isn’t a problem since most of customers already have the capability to implement and deploy our products. Where they don’t, we are happy to work with implementation partners to provide this service.

Q: What are some market data processing pain points that you’re addressing?

A: Our focus is on making the management of market data more effective, more transparent and less costly. So our products enable the transformation, routing and internal distribution of market data simpler, faster and cheaper.

Our products also enable market data and compliance managers to permission, enable, record and report on price publication – both internally and externally. This improves transparency and consistency within the firm. Our products can also be used to ensure that any regulatory requirements, such as those involving contribution to benchmarks such as LIBOR, can be adhered to, enforced, and reported upon.

Q: Do your offerings run entirely within the Intel x86 world, or are you leveraging co-processors, such as FPGAs. What’s your overall philosophy in this area?

A: Skyler’s products run entirely on Intel x86 architectures. They are optimised for multi-core processors, and in some cases scale across multiple servers but do not run on specialist, high-speed co-processors. Our software has been engineered over many years to run as quickly and efficiently as possible. So, for example, we can process a single market data tick in as little as 20 microseconds on x86 technology, so we can deliver more than a million updates per second on lowly 16-core machines. For our target market this is more than adequate for their needs.

Q: Do you believe that open standards like MAMA are likely to be widely adopted, given the widespread deployment of proprietary messaging formats from major data vendors, and increasing introduction of binary protocols from exchanges?

A: We are supportive of open standards, and we have seen some market data vendors make some of their technologies available. We’re also seeing increasing adoption of non-proprietary protocols such as FIX.

However there will always be a tension in the market – each market data vendor or exchange would like to secure their customers and users – and will try to make moving away unattractive. Trading firms, on the other hand, demand the flexibility to add or change market data vendors and to obtain data from, and trade on, different exchanges. Open standards such as MAMA help trading firms achieve their objectives; we anticipate such standards being increasingly widely adopted.

However with the current uncertainty over the future of NYSE Technologies, while the acquisition of NYSE Euronext by ICE has not yet concluded, we’re seeing a reluctance to commit to some of these standards until the dust settles on the deal.

Q: What business drivers are currently directing your technical and sales efforts?  And what developments do you see as directing them in the next 12-24 months?

A: At the moment in capital markets there’s no appetite for spending money to increase revenues – in fact most firms are shrinking.

Many firms are trying to reduce costs, but they are reluctant to spend ahead of cost savings, so any cost-saving product offering must provide an immediate return on investment, ideally in the same financial year. This is one area where we’re seeing interest in our products and we believe this will increase during 2014.

However, given the torrent of new and proposed financial regulation globally, budgets have been allocated to spend on some form of regulatory compliance. We don’t believe this is likely to change in the next 12-24 months so this is the area we’re currently focusing on. Several firms were penalised for their activities in manipulating LIBOR, and this has caused those contributing to that and other industry benchmarks to review their whole process. We have found significant interest in using Skyler LiveCache to discover (who’s contributing?), permission (are they allowed/licensed to contribute?) and record (who contributed, what price, from where and when?) benchmark contributions.

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