The Rise And Rise Of The Data Center

Terry Flanagan

Europe’s biggest data center players are continuing in their quest to provide the region’s traders with extra low latency capacity as demand grows for cloud, managed hosting and colocation services.

A raft of new data centers are popping up all over Europe, allowing electronic traders the opportunity to place their own computers and wires as close as possible to an exchange’s trading machine, via fiber optic cables, helping to shave crucial microseconds off a trade.

London-headquartered TelecityGroup, Europe’s largest data center provider, now operates 30 data centers in eight key European financial hubs, and has been in expansion mode in the last few years, after an initial public offering in 2007, adding to its facilities and extending capacity at existing venues.

“I am delighted with TelecityGroup’s performance to date in 2012; in particular, it is exciting to see new capacity coming online in prime locations,” said Michael Tobin, chief executive of TelecityGroup. It now operates data centers in London, Amsterdam, Frankfurt, Milan, Paris, Stockholm, Dublin and Manchester.

Data center operators are wise to the idea of attracting and retaining high-frequency trading firms, which now account for the majority of daily trading on equity markets, amid soft equities trading generally.

“Data centers are pretty successful and have huge potential to grow quickly,” a market source, based in London, told Markets Media.

Telehouse, a New York-headquartered rival of Telecity, is also looking to build out its footprint in Europe and in January bought Databurg, a colocation provider, to expand its presence in Frankfurt by acquiring its first data center in the German city, adding to facilities in London, Paris and New York.

“By opening this facility, we are enabling our customers to expand into a key European market which is expected to see further growth over the coming years—solidifying Frankfurt as a major data centre hub,” said Tokuji Mitsui, managing director of Telehouse, in January.  

Other leading competitors in the European space, including Californian-based Equinix and Interxion of the Netherlands, are also offering new data center options.

“These dense interconnection points are critical to the global trading community, providing an environment where shared infrastructure, super-fast connections, reduced total cost of ownership, connectivity costs and a wide range of choices form a new industry backbone for service delivery, prospecting and innovation,” said John Knuff, general manager, global financial services, at Equinix, which operates data centers in France, Germany, Italy, the Netherlands, Switzerland and the UK.

Equinix is currently in the process of expanding its Swiss operations with a new center in Zurich as well as expansion of one of its Geneva facilities. And last month it acquired ancotel, a German provider of colocation services, allowing Equinix to gain a data center in Frankfurt.

Interxion, which, analysts say, operates Europe’s most “interconnected” data center in Frankfurt, and also has 29 data centers in 11 financial hubs across Europe, is also in the process of expansion, adding a second facility in Madrid.

Meanwhile, exchanges are also getting in on the act. The technology division of stock exchange operator NYSE Euronext recently announced that it was opening up its data centers to third-party network providers and vendors, allowing for the first time for them to offer their services within NYSE Technologies’ two data centers in Basildon, Essex, and Mahwah, New Jersey.

This, however, opens up the possibility that other rival European exchanges could now offer their services through NYSE’s data centers.

Related articles

  1. Fund managers balance a tightrope of cost optimisation as they continue to deliver alpha.

  2. CEO Adena Friedman says Nasdaq is turning into a SaaS company.

  3. The cloud-native software unlocks missing network features required for demanding, high-throughput workflows.

  4. Bank plans to have more than half its applications running in Azure.

  5. Customers want end-to-end integration as they migrate workloads to the cloud.