APFIC 2017: Cloud’s Data Potential Increases as Industry Evolves

“Everything that we call ‘traditional’ is disappearing. The markets and trading strategies are changing first, and in five to 10 years, I imagine there will be no more per-user licenses—it will all be on a pick-and-choose basis,” said Nimesh Bharadia, head of Asia for data, product and strategy at interdealer broker Tradition. “Delivery of data is key, and so also is the technology…. Today, you have to be an anytime, anyplace, plug-and-play solution. So we have started to look away from traditional delivery technologies towards open-source technologies and plug-ins that are a long way from traditional data tools…. It’s very much a case of ‘However you want it, we can deliver it’.”

Many of the growth opportunities in Bats Global Markets’ data business are coming from new consumer types and markets that necessitate new license types and delivery models, said Stephanie Chen, business development director at Bats. “Market data and cloud, for exchanges, is a really exciting place. So we’re definitely looking at a number of distribution lines using cloud and APIs—especially for new geographical markets where you don’t need that super-low latency,” she said.

Yet exchanges face a dilemma of wanting to expand access to their content, but also wanting to ensure that only those licensed to access the content can actually view it.

“Once data is out there, it’s out there, and it’s very difficult to control… and know exactly where it’s going. Our struggle as an exchange… is that obviously we want to control who’s seeing our data, but we also don’t want to stop people using it,” said Virginie Barbot, head of business development for Asia data services at Deutsche Borse.

However, cloud may offer both the challenge and the solution to data distributors’ concerns. On another panel, Stephane Dubois, CEO of web services data provider Xignite, said the cloud can offer greater transparency into usage and control over access. “You can authenticate every API request, so you have a good idea of where data is going and who’s using it,” he said.

In response, Aaron Lee, messaging architect at messaging appliance vendor Solace, who moderated the panel, noted that “Authenticating every API call or message has a big overhead,” to which Dubois shot back, “That’s why you use the cloud… We probably service about one million messages per second.”

However, while offering potential for data vendors and exchanges, this overhead and the lack of data management functionality available in the cloud may make the cloud impractical—or at least, not yet economically viable—for serving the enterprise-wide data demands of large financial firms.

“There is a cost associated with change, and [incurring costs] is not something we like to do. You need to be able to locate every data item—and that ability isn’t available right now,” said Jeremy Green, regional head of Asia Pacific market data at Credit Suisse.