11.06.2014
By Terry Flanagan

Managed Services Move Up the Technology Stack

Managed services providers have grown beyond their traditional role of keeping the lights running in financial organizations to assuming control over alpha-generating activities such as trading and risk management.

“We’re seeing a trend with some of our customers, particularly our larger firms, where they want to outsource or leverage a managed service provider for some of their core technology where we’ve made that our core practice,” Moshe Siegel, vice president of product management for Interactive Data Corp.’s 7ticks, told Markets Media. “We are continuing to invest in and improve these services. This is our core business.”

Interactive Data’s 7ticks provides trading infrastructure and services, including direct market access (DMA), co-location, and proximity hosting to global direct exchange data and consolidated data. 7ticks is delivered as a managed services offering from Interactive Data Real-Time Services.

“We’ve seen customers wanting us and other MSPs to go higher up the stack,” Moshe Siegel, vice president of product management for Interactive Data Corp.’s 7ticks, told Markets Media. “You’ve got your traditional colo rack stacks, space, power, managed networks, managed exchange connectivity, but now it’s all become so tightly integrated that we’re seeing much more requests for managing storage, managing pre-trade risk, helping to manage compliance, helping to manage exchange reporting.”

There are several reasons why using a managed service can help achieve alpha.
“Traders are able to focus on their internal trading strategy instead of just infrastructure,” said Siegel. “As infrastructure resources are shared across multiple clients, trades can be performed faster and at a lower cost.”

Global spending on managed services is expected to reach approximately $620 million by the end of 2015, according to Aite Group. As the regulatory environment continues to shift, the demand for transparency, self-service and trading infrastructure is growing.

“That whole bucket of services is going to continue to grow as regulations continue to change, firms consolidate, and split off product and services,” said Siegel. “There’s going to be a continued demand and growth for service providers to help firms manage through that.”

Related articles

  1. Spending on ESG data has an annual growth rate of 20%.

  2. Increased electronification has created useable and accessible real-time and historic trade data.

  3. Trade Reporting In Focus

    The GIPS standards, created by CFA Institute, are for calculating and presenting investment performance.

  4. Foyston Practices 'All-Weather' Investing

    ICE Connect customers can see how changing weather forecasts influence live market prices.

  5. From The Markets

    Nasdaq Data Link Launches

    Customers can now access an expanding library of datasets via cloud APIs.