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.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
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. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Data Management
Hub to lay off 20% of staff, sources say
Hub’s CEO says this is simply a case of a startup trying to stay nimble and efficient; others say it points to deeper issues.
TS Imagine integrates LTX’s pre-trade analytics tool
Users of the fixed-income EMS will now have access to LTX’s Liquidity Cloud tool, which provides a pre-trade score for the likelihood of trading success.
After contentious Opra upgrades, vendors brace for a faster future
Upgrades to the datafeed widely used to gauge the current market price for options contracts went into effect in February after three separate delays, which market participants say were caused by persistent bandwidth issues at some important recipients.
The IMD Wrap: No more turf wars, or why CDOs should heed the Voice of the CTO
Max reviews how our recent Voice of the CTO series has implications for those beyond a firm’s technology function, and how communication and collaboration between tech, data, and leadership will deliver better results.
Dark horse: Deutsche Börse building dark pool
New functionality allowing exchange members to execute sweep trades comes hot on the heels of European rival Euronext launching its own dark pool.
Man Group’s proprietary data platform is a timesaver for quants
The investment firm’s head of data delves into its alt data strategy and use of AI tools to boost quant efficiency.
Waters Wrap: The tough climb for startups
Anthony speaks with two seasoned technologists to better understand why startups have such a tough time getting banks and asset managers to sign on the dotted line.
As crypto ETFs become reality, benchmark providers take center stage
The SEC’s approval of the first spot bitcoin ETFs will expose a growing number of traditional market participants to the maturing world of crypto data, a moment that some—such as CF Benchmarks, BlackRock’s benchmark provider—have been eagerly awaiting.
Most read
- Women in Technology & Data Awards 2024: All the winners and why they won
- Witad Awards 2024: Above and beyond award (vendor)—Susan Bennett, Tradeweb
- Fighting FAIRR: Inside the bill aiming to keep AI and algos honest