Cloud Is Not A Passing Strategy
Market participants are beginning to embrace cloud computing despite concerns over its safety.
With the high costs involved in building and setting up your own complex IT infrastructure, and the economic climate as it is right now, many in the buy side, as well as other market participants, are turning to cheaper and more flexible solutions such as cloud computing.
There are a host of technological solutions at hand for firms to best implement their trading strategies, such as managed services, extranets and co-location centers, but proponents of cloud computing—the practice of using a network of remote servers to maintain data to allow consumers and businesses the use of applications without installation and access to personal files at any computer with internet access—believe that it offers a compelling solution.
With a cloud model you can pay as you go at a centrally located data center which is still within a millisecond of the exchange without any investment in hardware. Co-locating, meanwhile, means that you have to provide your own kit and also sign up to a long-term agreement with the data center to operate there.
“Cloud computing is a great idea,” a European exchange executive told Markets Media. “There are a number of firms in Asia that want to trade in Europe but don’t want to be massively disadvantaged by the speed of light. The advantages of logging on to a server and downloading your software on to it, instead of expensively setting up your kit in a data center, to be in virtual co-lo is a great idea.”
One recent survey of 125 hedge funds and investment management firms by IT service provider Eze Castle Integration found that 79% of the respondents were using the cloud, with 65% indicating that they were using the cloud for basic business and office functionality.
A half of all firms that responded to the survey were also using cloud technology to facilitate financial application hosting, where firms can leverage the enterprise-grade infrastructure of a third-party provider who is also responsible for the management and monitoring of that application within the cloud environment. A hosted platform can provide virtually unlimited computing resources and easy expandability to support a firm’s need to add users or increase resources on-the-fly.
Of the cloud deployment models, an overwhelming 71% of respondents used a private cloud model that is often better suited for hedge funds and investment firms who require a great deal of sophistication, application integration and support. In a private cloud, the infrastructure policies are governed by a single user, while the cheaper public cloud model provides IT resources that are provisioned remotely from the consumer and operated by a third party.
“These survey findings go a long way in disproving the myth that cloud computing is simply a passing trend in the investment industry,” said the Eze Castle Integration study. “While most firms are not yet using the cloud to outsource their entire infrastructure, most are using it for basic office functionality or financial application hosting.”
Some of the dangers associated with cloud computing are that users do not physically possess storage of their own data, which leaves the responsibility and control of data storage with the provider; while users could become dependent upon the cloud computing provider; and with externally-held data, business continuity and disaster recovery are in the hands of the provider. There can also be data migration issues.
With Thejas Nalval, Co-Founder and Chief Investment Officer, Parataxis Capital
Corporate Sustainability Reporting Directive elevates sustainability information to same level as financial.
Essentia analyses data to create behavorial “nudges” for fund managers' investment decisions.
With Adam Conn, Head of Trading, Baillie Gifford
Partnership will develop a suite of U.S.-listed, physically backed ETFs.