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NYSE Euronext's Data Center Vision Ups Speed Ante

May 18, 2009
By John Sandman

The data centers NYSE Euronext is building in New Jersey and suburban London were expected to be cutting-edge facilities, but the announcement earlier this month that they will run on a 100 gigabit network raises the ante in the securities industry's never-ending quest for speed.

When the centers go live next year, said Stanley Young, co-global chief information officer of NYSE Euronext and head of its commercial technology business, they will be supported by networking equipment from Linthicum, Md.-based Ciena Corp. and NYSE's Secure Financial Transaction Infrastructure (SFTI), which links to all the displayed U.S. equities venues and will soon replace the exchange operator's legacy infrastructure in Europe.

"Users go across the SFTI network, come to the access point and then are managed into the data center across Ciena," Young said. "Then they're in the collocation boxes with access to our markets."

The U.S. facility will have 100,000 square feet of raised floor space--the area devoted to server racks--and the U.K. center will have 70,000. NYSE expects that combined they will execute over a billion transactions a day. "There will be access points in London, Frankfurt and key financial centers around the U.S.," Young said. "Our data centers have been designed at a scale, capacity, performance and power capability to be at the top of low-latency, high-performance trading."

Andy Bach, SVP and global head of telecommunications at NYSE Technologies, noted that NYSE will begin to roll out Ciena products within the next couple of months and light up the data centers in September. "That makes them network-ready," he said, "but there will be quite a bit of outfitting to get it ready for all the servers."

Capacity Threshold

For collocation, the 100G network should make for a competitive offering, but Bach said that there was a capacity issue, regardless of what other vendors provide. "We are consuming more and more 10 gig pipes," he said. "At some point you cross a threshold where it's more viable to install your own fiber and light it up with 100 gig waves."

"We think of our data centers in the same way that an exchange would have thought of its trading floor 100 years ago," said Young. "The data center is not just a place where we put our matching engines. As low-latency, high-frequency traders start to drive our business more and more, we want to offer them substantial collocation capability within those liquidity hubs." That also applies to Europe, where NYSE will put all its cash equities and derivatives engines and dark pool technology in the new facility.

"Typically, firms that employ black boxes want to put their servers as close to the data center as they can get--and the actual matching and the market dissemination platforms in the data center," said Sang Lee, managing partner of Boston-based research firm Aite Group. "Take BATS as an example. They're headquartered in Kansas City, but their data center is in Weehawken, N.J."