BATS CIO Explains Datacenter Move

Officials from the two companies canvassed their members. The prevailing opinion was that there should be consolidation, and that BATS should be the one to move, because of Equinix's superior ecosystem of market participants. But after investigating the possibility of entering NY4, BATS discovered that space constraints might make it difficult. The datacenter was so popular it was almost full.

By December it reached a compromise solution─it would place the BATS and Direct Edge exchanges at Equinix's NY5 facility, built to the same spec, just down the road in Secaucus. NY5 would give them room to grow. A colocation discount for BATS customers has already been agreed to with Equinix.

Direct Edge's two equities exchanges, EDGX and EDGA, will migrate to NY5 and onto BATS technology in Jan. 2015. BATS' equities exchanges, BZX and BYX, will shift to NY5 in the second quarter of 2015, along with BATS Options.

BATS will maintain a network point-of-presence (PoP) in NY4 and NJ2 "as long as our customers want us there," according to BATS EVP and global CIO Chris Isaacson. This will allow current Direct Edge member connections in NY4 and BATS member connections in NJ2 to access all BATS and Direct Edge exchanges without interruption once they are moved to NY5. BATS will engineer connectivity from both NY4 and NY5 to all BATS and Direct Edge matching engines in NY5 to be equal latency for the foreseeable future.

"I won't go into server counts, but we're going to take this opportunity to do a classic technology refresh," Isaacson says. "Part of the integration strategy is to build a parallel system so it can do parallel testing side by side, so that we're fully prepared for the cutover. That parallel system we're building at NY5 today is going to be on completely new hardware that we're going to standardize as much as possible. But in order to ensure redundancy and resiliency we've purchased enough kit to run each of the exchanges individually."

The exchange providers, who completed their merger on Jan. 31, will make a similar move in London. BATS plans to move from Savvis' LO3 facility in London Docklands to Equinix's LD4 facility in Slough.

The BATS and Direct Edge secondary US data centers will remain in Chicago at the CH4 data center with a PoP at CH1.

The next order of business for Isaacson and BATS is to integrate Direct Edge's order types and functionality onto BATS technology.