NYSE Euronext to Open
New Data Centers
New state-of-the-art data centers in greater New York and London are expected to drive market innovation at breakneck speeds.
Stephen Rountree
Everybody knows the facade of the NYSE building at the corner of Wall and Broad streets. But two new structures are about to become equally important to the future of NYSE Euronext (NYX). Twin data centers now being built in the greater New York and London metropolitan areas will offer customers the industry’s premier one-stop access to liquidity with the highest levels of resilience and the lowest available latency (the time gap between trade placement and execution) to NYSE Euronext markets. These data centers will be next-generation trading environments where infrastructure, software and markets all meet using the fastest and most reliable technology available. “To run world-class markets you need world-class technology,” says Stanley Young, CEO of NYSE Technologies and co-global CIO of NYSE Euronext. “In the electronic world of trading, bringing buyers and sellers together in an ultralow-latency environment is crucial to our future as a market.”
“Operating our own data centers is an indication of the way we view our role as the secure, stable operator of the world’s most liquid, most scalable, most transparent and most orderly markets,” adds Murray White, senior vice president of NYSE Technologies. “And it allows us to have control over the entire technology value chain and the end proposition for our clients. Our goal is to make the complete lifecycle of a trade as cutting edge as possible.”
“We view the networks we deploy in and around our data centers as a differentiator.”
— Stanley Young, CEO of NYSE Technologies
The new data centers, which are expected to be fully operational in 2010, are planned to support several billion daily transactions and quotes. NYSE Euronext plans to use 20 percent of the compute space for its own systems and to commercialize up to 80 percent for market participants.
The new buildings will also consolidate the Exchange’s data centers. NYSE Euronext’s U.S. data center in Mahwah, N.J., will provide access to the NYSE Classic, NYSE Arca, NYSE Amex, NYSE Arca Options and NYSE Amex Options markets all under one roof. It offers 100,000 square feet of compute space in a 398,000-square-foot building on a 28-acre site 34 miles from Wall Street. NYSE Euronext’s European data center in Basildon, England, will provide access to the NYSE Euronext cash equities market, as well as to NYSE LIFFE, NYSE Arca Europe and Smartpool. It will also provide 70,000 square feet of compute space in a 315,000-square-foot building on a 16-acre site 33 miles from central London.
The $500 million investment in the two data centers includes a commitment to energy efficiency and sustainability. NYSE Euronext instituted a number of green initiatives in constructing the centers that would also ensure that the facilities are attractive to potential customers. “A lot of thought went into the greenness of the centers,” says Young. “For example, the Basildon center is purchasing only green power, buying electricity strictly from renewable sources.”
In Pursuit of Zero Latency
Connecting the data centers to the outside world will be an ultralow-latency trading and market-data network. Its industry-leading speed and capacity will facilitate the processing of communications across the trade life cycle — from quotes, signals and indications of interest to trades, affirmations and advertisements. In fact, the new facilities will use the 10-gigabit Ethernet network technology recently pioneered in the deployment of its current data centers to support an internal latency of less than 40 microseconds each way. “We view the networks we deploy in and around our data centers as a differentiator — the applications they offer are unique, and the performance reflects the investments we’ve made in cutting-edge switching platforms,” says Young.
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Providing the underpinning fiber-optic connections is AboveNet Inc. (ABVT), a leading provider of high-bandwidth connectivity solutions. “We have worked collaboratively with the NYSE to design the platform that allows this vital financial exchange to offer leading-edge capability to all of its constituents,” says William LaPerch, AboveNet’s president and CEO. “We are proud to be part of this effort.” Other vendors helping NYSE Euronext build its next-generation trading platforms and consolidate its global data centers are Juniper Networks Inc. and Ciena Corp.
Stimulate and Innovate
One of the most promising features of the new data centers is the potential they offer for industry innovation. “We believe that one-stop access to our market engines — equities, options, ETFs — and the near elimination of the latency and unpredictability of executing across multiple engines will stimulate the trading community not only to trade more but to innovate when it comes to multi-asset-class, multi-leg strategies,” says Young.
This applies to global trading as well. When the centers are up and running, “firms executing business in North America will execute business in Europe the same way,” he explains. “There may be different order types and market practices, but the technology and the experience will be exactly the same. It’s part of the globalization of our business.”
Connecting the data centers to the outside world will be an ultra low-latency trading and market-data network.
Ultimately, those standing to benefit from the facilities are issuers and investors. Says Young: “The technology revolution in the way we think about running our global markets is a great thing for listed companies — and their investors. Investors’ ability to trade fairly and openly, easily and simply where there are deep, liquid, efficient markets with great price discovery contributes to a vibrant capital market.”
This article includes information that may constitute “forward-looking statements,” as it is based on current expectations and assumptions that are subject to risks and uncertainties. Please visit the cautionary note to read more.
