Discussions at the second day of industry association FISD's World Financial Information Conference were all about value-from the value of data, including appropriate pricing structures, to the value of technology and how it can add value to data, particularly in the face of evolving and new use cases for data and the need to adapt accordingly.
One exchange representative stated bluntly that exchange market data is "very valuable," given its quality and speed, and is the only tradable market data that is provided publicly, pointing to the fact that alternative trading venues use exchange market data as the basis for their business as well.
Speakers agreed that as the usage of data expands, a closer relationship with end-users is needed to create the right licensing model, as well as to protect the value of the data. While end-users want to see a published price list, panelists noted that the increasingly bespoke nature of customer licenses for specific needs and new use cases means they are constantly straying from their price lists.
End-users are seeking more flexibility from exchanges and data vendors, even starting to push for short-term contracts in situations where they are looking to explore new business areas but are not ready to commit long-term, and vendors are increasingly being asked to shoulder some of the risk, said an executive from a data vendor.
Some end-users are even asking for consumption-based licensing, paying only for what they actually use, which John Mason, chief operating officer of Netik, likened to Apple's iTunes model, where users can purchase only specific songs from an album rather than buying an entire album for the sake of owning one or two songs.
Meanwhile, though one data vendor representative proclaimed, "Data is still king," an executive from a technology vendor said it is the supporting technology that provides the data in a clean and timely manner, making the data relevant.
For example, said Neil McGovern, senior director of marketing at Sybase, while complex event processing engines were initially used to execute high-frequency trading strategies, increasingly high-speed demands are outpacing software's ability to keep up, so CEP is now more often used for monitoring trading systems and strategy augmentation instead.
But in any debate about the relationship between data and technology, capacity remains a key concern-especially in light of recent record market volumes. One investment bank executive said capacity remains a major concern for his firm, particularly in dealing with microbursts, and that the issue is exacerbated by the lack of standards around how capacity is measured, such as in five-second or one-second peaks, or by Megabits or Gigabits per second.
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