Opening Cross: Getting ‘Invested’ in Politics and Purchasing
With US presidential elections still over nine months away, republican candidates are already jostling to be their party’s chosen candidate to run against the incumbent president Barack Obama. This week, in bids to gain favor, Mitt Romney released his tax return, Rick Santorum introduced the nation to his mother, Newt Gingrich suggested colonizing the moon, and Ron Paul quipped that the best use for the colony might be to house politicians. Now that idea’s got my vote!
Behind the posturing, kissing babies and flip-flopping, a political campaign is a sales pitch—one that every provider in our industry goes through constantly as they seek to displace incumbent vendors, promising to be better, faster and cheaper than their rivals. In the current economy, you would think this would be an easy sell—especially since some predict that 2012 won’t be the year of the dragon, but rather the year of displacements as virtualization, open-source technologies and abstraction layers make it easier for firms to chop-and-change providers and create true “best-of-breed” architectures.
But aside from eliminating duplicative charges through ingenuity and good management policies, saving money costs money. The cost of buying something new, even if it’s cheaper than the incumbent, and the cost of resources to rip out the previous solution can be daunting—not to mention the costs and time involved in evaluating and testing potential alternatives before settling on a replacement. So the only area where we see regular replacement of technology or services is in high-frequency trading, where the cost of investment is outweighed by the profits.
For example, someone reading last week’s news that trading software vendor FfastFill halved roundtrip order latency to the London Metal Exchange from 10 milliseconds to five milliseconds for traders using the vendor’s proximity hosting service, might be tempted to splurge on the vendor’s servers and connectivity—if even five milliseconds of latency isn’t too high for them. Equally, last week’s announcement that data and trading software vendor CQG has co-located its gateway servers in CME Group’s new datacenter in Aurora, Ill., might prompt a firm considering more traditional connectivity to the new facility—which at press time was still due to go live on Sunday, Jan. 29—to write CQG a check.
But for the most part, if the commercial benefits aren’t immediately apparent, then firms are unwilling to stomach the initial cost (see an online discussion between my Waters colleagues Anthony Malakian and Jake Thomases for how firms are demanding more proof-of-concepts before signing deals).
The cost of buying something new, even if it’s cheaper than the incumbent, and the cost of resources to rip out the previous solution can be daunting—not to mention the costs and time involved in evaluating and testing potential alternatives before settling on a replacement.
This is one challenge facing the consolidated tape debate in Europe: After months of industry bodies and vendors working to develop a set of standards as the basis for potential consolidated tapes of pan-European post-trade data, the lack of an official endorsement from the European Securities and Markets Authority could result in a lengthy wait-and-see period while markets delay implementing the standards. Meanwhile, vendors that have touted their credentials as consolidated tape providers are realizing that—especially if post-trade data is to be provided free after a slight delay—there is less to be gained from providing a tape of record than there is from providing customized tapes that meet specific client needs, which they already do as part of their everyday services. But isn’t that anathema to the idea of a consolidated tape as a failsafe mechanism not primarily for high-value trading, but to support important functions such as best execution monitoring, risk management and compliance?
Perhaps the solution would be to require each vendor who wants to be an authorized tape provider to offer a basic, full consolidated tape to all-comers, and allow them to augment that with custom, premium solutions for those willing to pay more. If we can colonize the moon, why can’t we agree on a consolidated tape?
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@waterstechnology.com
More on Data Management
Deep in the heart of Texas, market data vets sweat the talent gap
The secrets to unlocking all of market data’s questions and the antidote for all its ills were discussed in Texas last week. Unfortunately, we promised not to tell—not all of them, anyway.
Fidelity’s quantum exploration unites theory and proof
The asset manager and Amazon have teamed to put a quantum twist on machine learning.
Interop after acquisitions remains daunting for buyers
Executives from a variety of vendors speaking at WFIC explained why desktop interoperability is important and why progress has been slow.
GenAI could connect ‘constellation’ of vital information technologies
At WFIC, Six Group’s Marion Leslie highlighted the opportunities and risks that the technology holds.
TRG Screen cuts 20 jobs following review and restructure
The review follows an eight-year period of acquisitions and buy-in from a new private equity owner last year.
Why don’t you write a book? Several notable data professionals are doing just that
The IMD Wrap: Max talks to some data architects-turned-authors who are literally sharing volumes of knowledge.
American Bankers Assoc. asks SEC: Do you know what you’re doing?
The industry group disagrees severely with regulators’ interpretation of the Financial Data Transparency Act, hinting at possible legal action in a recently published comment letter.
South Africa’s equity markets court HFTs with tech upgrades
Competition for flow has driven innovation in connectivity, risk, and data provision.