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Business Network and IT Services
Complimentary Advisory Report

Selling Network Services to
the Financial Services Industry

| Mar 10, 2011 | Business Network and IT Services
| Analyst: Sandra O'Boyle, Service Director,
  Business Network and IT Services

Click here to download report (100 KB PDF)

The financial services world is in the midst of an arms race – only in this case traders are seeking to equip themselves with nothing more dangerous than the fastest possible connections to exchanges and markets data feeds.This has forced network operators into a stand-up fight to host the exchanges that facilitate these trades, or provide lowest possible latency connections to them in data centers that are as close to the exchange. While in the rest of telecoms world, distance is no longer an issue, in electronic trading, distance can mean delay and lost profit.

As a result, data centers have been positioned as close as possible to major financial hubs such as New York, Chicago, London, Singapore and Toyko, covering millions of square feet of floor space. Where proximity is not an option, traders are offered high speed links to market data feeds and trading information services. Operators are trumpeting the resilience and speed of their networks as latency rates move into single-figure milliseconds. Some are content to provision connectivity from other operators, while those who own and manage their infrastructure use it as a selling point.

Every option for reducing delays is being explored, even to the extent of collaborating with equipment vendors to ensure this high value traffic is not unduly delayed as it passes through their network devices - all backed up by comprehensive service level agreements. Amid the frenzy to drive down latency rates, it is easy to forget that trades in the OTC market in particular are still negotiated the old fashioned way, trader-to-trader over the phone. But the industry has yet to really ‘get’ voice over IP, preferring in many cases to stick with the devil it knows.


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