A new independent report ‘Colocation of Financial Markets Trading Infrastructure’, has been released today and identifies the pros and cons of in-house management (a “DIY” approach) versus a managed service model. Sponsored by Transaction Network Services (TNS), the report features an in-depth decision framework and serves as a vital aid for trading firms that are considering which option to adopt, or whether a hybrid strategy would best suit their needs.
The report from Celent, a leading, independent research and advisory company that focuses on technology for financial institutions globally, found that managed service providers can offer unique value-added services for capital markets clients. Benefits include cost savings, trade efficiency, and simplified access to data and network infrastructure support, enabling trading firms to focus on their core business competencies.
Celent interviewed trading firms and data and trading technology providers and found that the key decision criteria when deciding to engage a managed service provider included:
- Consultation and expert advice on the ideal configuration of hardware, network connectivity, location, data feeds and network bandwidth.
- Agility and flexibility to take advantage of ever-changing investment opportunities by rapidly and easily deploying trading strategies in new markets.
- Access to high-end network services, leveraging high-speed solutions, including ultra-low latency, in-data center Layer 1 connectivity to link to trading venues, new customers and other service providers.
- Operational efficiency and future proofing, with access to the latest technology, and highly experienced staff in all global jurisdictions who help to navigate cultural, linguistic, and regulatory obstacles.
“Trading organizations looking to co-locate in data centers need to seriously consider if they have the skills, understanding, resources and bandwidth themselves,” said Jeff Mezger, TNS’ Vice President of Product Management. “This report provides a comprehensive, easy to use framework to identify the benefits of outsourcing operations to a managed hosting, co-location and connectivity service provider.”
“There is a combination of technical and business drivers behind the decision to co-locate,” adds Monica Summerville, Head of Capital Markets at Celent. “Businesses need to carefully weigh their options, especially if they currently or potentially require access to multiple trading venues across different locations. This report aims to promote understanding of that critical cost benefit analysis.”
Registration is now open for a webinar to support this report on 2nd March 2022, with Monica Summerville, Head of Capital Markets at Celent, and Jeff Mezger, TNS’ Vice President of Product Management. Please click here to register.
Working with TNS is highly cost-effective with managed hosting solutions engineered to deliver rack-optimized cabling and design that utilizes TNS’ ultra-low latency Layer 1 technology for exchange direct access inside the data center. TNS’ Layer 1 was the first architecture of its kind to be offered and deployed globally, and remains the most advanced solution in the market, eradicating the need for multiple switches by using a simple, single-hop architecture to deliver direct exchange connectivity in as little as 5 to 85 nanoseconds.
The TNS infrastructure brings together over 2,800 financial community endpoints to address the needs of financial market participants worldwide. Traders that use the company’s managed hosting solution benefit from TNS’ global point-of-presence footprint and extensive existing on-net connections, which include uninterrupted access to more than 60 exchanges with local, physical support around the globe.