Last week, the crucial connectivity route between market centers in New York and Chicago got a turbo boost with the announcements that CME Group and Nasdaq OMX will roll out a microwave network for wireless data transmission between the exchanges’ datacenters, offering much lower latency than fiber paths on the same route, and Verizon shaving latency off its own fiber route with a direct connection to CME’s Aurora co-location center.
One key feature of the CME-Nasdaq microwave network is that the fee—though high at around $20,000 per month—is significantly cheaper than the cost of individual firms building routes themselves, suggesting that while some cost-conscious firms have pulled back from the latency race, there are plenty willing to continue the pursuit if the price is right, so investment in this space clearly isn’t being stifled by firms’ budgetary concerns.
Simply put, says Chandan Sharma, global managing director for financial services marketing at Verizon Enterprise Solutions, referring to the vendor’s newly-improved fiber route, “Even if you don’t have a highly latency-dependent strategy, you still don’t want to be late.”
CME, Nasdaq and their technology partner Strike Technologies aren’t the only ones working hard in this space. Perseus Telecom, which recently announced an important initiative to provide certified timestamps in co-location centers (IMD, April 1), rolled out a microwave network between NYSE Euronext’s Basildon, UK datacenter and Frankfurt last October (IMD, Feb. 25), and is now looking at creating its own wireless network between New Jersey datacenters and from the New York metro area to Chicago. Meanwhile, Nasdaq already operates a short-haul wireless network, dubbed Metro Millimeter Wave, that it says can distribute data 40 percent faster than fiber between its Carteret, NJ datacenter, Savvis’ NJ2 datacenter in Weehawken, NJ, and the Mahwah, NJ datacenter of NYSE Euronext, which is also planning a wireless network between its Basildon facility and Frankfurt, connecting European cash and futures markets at ultra-low latencies.
And while microwaves travel as direct a path as the crow flies—whereas underground fiber is diverted by roads, mountains and other impediments—it’s another kind of bird that has the Securities and Exchange Commission all a-twitter, as the SEC last week ruled that social media can be used to disseminate material information about a company, following an investigation into its use prompted by a Facebook post from Netflix chief executive Reed Hastings last July congratulating the company for achieving a billion viewing hours of streaming media in a month. The SEC—and the market, since Netflix stock rose by over $11 in the day following the post—deemed this to be material information, and now says social media is a legitimate channel to disseminate information, providing it is accompanied by simultaneous disclosure elsewhere.
Soon after, Bloomberg announced that it has integrated Twitter feeds into its Bloomberg Professional terminals, allowing users to analyze Twitter activity about companies, individuals, or—using the vendor’s classification of tweets by company, asset class, people and topics—updates issued by companies or individuals, by using the TWTR < GO> command.
While news providers like Bloomberg needn’t worry about being upstaged by Twitter, press release distribution wires may be more concerned, given the social media portal’s usefulness as a distribution tool, and given that their own growth has flattened over the past year, according to a report from Burton-Taylor International Consulting. Twitter is certainly a cheap and effective tool for information dissemination, but it doesn’t perform all the same functions as the PR wires, who—like a connectivity provider striving to deliver competitive latency—will nevertheless have to innovate and evolve, and keep adding value.
Waters Wavelength Podcast Episode 97: C-Level Execs Talk Bitcoin, Fintechs, Cognitive Computing & Open-Source Tech
In separate interviews, executives from AQR, JPMorgan, Cboe and IBM discuss topics permeating the capital markets.Subscribe to Weekly Wrap emails
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