Rob Daly: Time Is Running Out

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Rob Daly, Sell-Side Technology

As it is the perfect time for some light summer reading, I like cracking open my copy of The Hitchhiker’s Guide to the Galaxy. I’ve enjoyed Douglas Adams’ whimsical turns of phrase for a couple of decades.

After a recent dinner with a CIO of a major options exchange, Adams’ famous quote—“Time is an illusion and lunchtime doubly so”—kept popping into my head.

Part of the conversation turned to how far into the future CIOs plan IT projects. I was curious to hear about the exchange’s five-year plan, but I was surprised to hear it wasn’t looking beyond 24 months.

Technology evolves so fast, so it doesn’t make sense to plan any further into the future, as there is no way to know what will be available in two years. Either enterprises are getting far more nimble in their IT planning, or the life of a CIO has gotten for more interesting. My money is on the latter.

Planning just a year beyond the current budget cycle seems a bit cavalier, considering how much investment banks pour into technology. Yet over the next couple of years, the industry will reach a tipping point in terms of computing technology.

Initial Benefits
Consider grid computing, which quickly evolved into cloud computing. Think of grid computing as a Model A Ford, and cloud computing not just as a Toyota Prius, but as the entire interstate highway system—including all the businesses associated with it. In other words, one is a remarkable bit of technology, and the other is an entire business ecosystem based upon that technology.

Cloud computing providers are just beginning to layer business logic on top of their cloud offerings, which will increase their attractiveness to end-users. According to industry experts, end-users should also see the issue of application portability between the different cloud environments solved by the end of the year. Once this is accomplished, cloud computing’s true potential will be quickly realized.

However, cloud computing isn’t the only disruptive technology on the near horizon. Various academics and vendors have been making recent strides in quantum computing. A technology that has been proposed since the 1930s by mathematician and cryptanalyst Alan Turing is beginning to see commercial applications.

Most Challenging
Earlier this year, aerospace vendor Lockheed Martin placed an order with Canadian vendor D-Wave for its first 128-qubit quantum computer, which will be “applied to some of Lockheed Martin’s most challenging computation problems,” according to the vendor. During last month’s Toronto Financial Information Summit hosted by sibling publications Inside Market Data and Inside Reference Data, one speaker claimed that two of the largest US investment banks have already made investments in quantum computing vendors.

The first firms to get quantum technology into production will be well ahead of their competitors. Instead of doing intraday Monte Carlo simulations within, say, minutes, imagine doing them in milliseconds—or even faster. Not only will it bring risk management into a new dimension, but think of what it could do to smart order-routing.

I doubt this will happen by the end of this year, or even by the end of next year. But I believe we could see it within the next five years.

Given these fast-approaching changes, CIOs should put themselves in a position to be as flexible as possible and find ways to leverage their existing technology. But they also need to be able to incorporate new technologies as quickly as possible.

One thing is certain: The changes we will see in computing in the next five years will dwarf the changes we’ve seen up to this point.

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