Opening Cross: Market Data Meteorologists: Forecasting the Many Faces of Cloud


Over 200 years ago, British chemist and amateur meteorologist Luke Howard laid the foundations for the classification of clouds used today, which, in their various forms, can resemble anything from gauzy material shrouding the sky, to flying saucers, wispy vapor trails to bulbous upside-down mushrooms. With such different perceptions of the same phenomenon, should we be surprised that cloud computing is also viewed so differently by different parts of the industry?

At last week’s North American Financial Information Summit, we heard vastly differing opinions on the potential opportunities and drawbacks of cloud computing. And interestingly, whereas regulators are often criticized for being behind the curve, when it comes to cloud, regulators are already taking advantage of cloud in ways that trading firms are still debating about.

For example, US regulator FINRA was already using Big Data technologies, but realized—with 30 billion transactions and six billion shares traded daily to monitor—it had “exhausted” the scale and capacity of these platforms, FINRA chief information officer Steve Randich told attendees.

So Randich—who has been featured on the cover of sibling Waters magazine twice in recent years for his efforts first at Nasdaq then at Citigroup—embarked on a project to shift FINRA’s storage and processing requirements onto a more elastic and cost-effective cloud model, using Amazon Web Services, starting with its website and Broker Check system, and ending in 2016, when all of its market surveillance platforms and their intensive data needs will be moved onto AWS.

“From a physical and logical security standpoint, I believe that, if done right, public cloud computing is as or more secure than self-hosting,” Randich said, adding that the move could ultimately yield cost savings of up to 40 percent, along with other business benefits.

Moreover, when Randich—wary of the information security implications of hosting sensitive data in the cloud—took his plans to the Securities and Exchange Commission for approval in December, he found the regulator already running 58 of its own applications on AWS.

Randich may have been right to be cautious: At the same event, Aite Group senior analyst David Weiss warned that market participants, drawn by cloud’s cost and time-to-market benefits, may be overlooking the “insufficient legal protection” of data because legal terms have not evolved as quickly as cloud technology, which could create issues around who really owns what. “Cloud or off-premises servers are no longer your property… and your data may be subject to access without notice,” Weiss said.

In addition to his concerns, firms are worried that, while the cost benefits of cloud adoption are clearly attractive, moving to the cloud will involve hidden costs, such as those associated with re-architecting applications to take full advantage of an elastic cloud environment, as well as the yet-untested costs of moving back out of the cloud, if appropriate, since most migrations don’t take any exit plan into account. “Providers make it very easy to get onto their service, but very difficult to get back out,” said Nathan Boylan, head of IT at Lord Abbett.

Firms also remain wary of providers from outside financial services, no matter their pedigree in other industries, though Amazon—no doubt aided by Nasdaq’s AWS-based FinQloud offering for financial markets—has laid the groundwork for greater acceptance and adoption in future. The question is, will cloud providers reassure users, or will business needs eventually outweigh users’ concerns?

“We want to throw out our legacy technology, but the challenge is, do I trust [those cloud providers]? Do they understand our needs? It’s all about managing reputational integrity…. I know they can do this… cheaper than I can today, but can I trust them?” Boylan added

And ultimately, like Luke Howard, we all need to understand and be able to trust our clouds. After all, how else will we know whether we’re looking at a bright outlook or a gathering storm?

  • LinkedIn  
  • Save this article
  • Print this page  

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 [email protected] or view our subscription options here:

You are currently unable to copy this content. Please contact [email protected] to find out more.

You need to sign in to use this feature. If you don’t have a WatersTechnology account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: