I’m down in North Carolina visiting family, so I’ll keep this short and sweet. Two announcements hit the wires recently, and I think they’re both fairly big developments.

First, on August 3, the Australian Securities Exchange (ASX) announced that it is yet again delaying the rollout of its distributed-ledger technology (DLT)-based Chess replacement project to 2024. The $250 million endeavor has not gone smoothly; so much so, that consultancy Accenture was called in to help right the ship. If you need those suits coming in to “help out,” with their hefty fees and “management speak,” I think it’s fair to say this tech infrastructure overhaul has not been a shining success.

Since ASX first gave the green light to build a DLT-based replacement for its Chess equity clearing and settlement platform, there have been five delays, according to the Australian Financial Review. From the outset, some industry participants wondered whether DLT was the right answer to replace the original Chess engine, which was built in the 1990s. After the Accenture review is conducted, ASX will provide a new projected go-live date. According to Investor Daily, the initial go-live projection was Q4 2020, so don’t hold your breath.

At a virtual event held in November 2020, Nasdaq president and CEO Adena Friedman, and Charles Li, who was CEO of Hong Kong Exchanges and Clearing at the time, both expressed skepticism about blockchain used on large-scale exchange technology projects. While there are examples of the emerging technology as a useful fix for certain post-trade issues, the are far more examples of blockchain flops.

Hindsight is 20/20, but considering that this replacement was first earmarked to go live in 2020, I can’t help but think that if the executives at ASX had it to do over again, they would have chosen a different path, rather than being the first exchange to charge ahead with a massive DLT project to replace legacy technology in the vast equities and options markets.

Dominoes and Chess

This brings me to Cboe Global Markets. On July 28, the exchange announced that it was migrating its on-premises corporate data and analytics platform to Snowflake’s Data Cloud platform. This comes on the heels of CME Group announcing that it intends to move its entire tech stack to Google Cloud Platform, which I wrote would be the first domino to fall, with other major exchanges following suit and signing their own partnerships with major cloud providers. Soon thereafter, Nasdaq announced a similar deal with Amazon Web Services.

The old Chess platform—which was run on Cobol and Intel’s now-defunct Itanium architecture, according to The Register—needed to be overhauled. No one doubts that. But it was a massive gamble to be the first-mover on DLT to run a major exchange’s clearing and settlement system. And as the consultants come in and the price tag balloons, there’s a risk that ASX will fall behind other exchanges that are making aggressive moves into the cloud to run everything from data analytics to clearing engines and multicasting.

And as we like to write about around here, it’s becoming increasingly important for trading firms, vendors, and even exchanges to not just provide data, but to provide alpha-driving analytics and package that information in a way that provides context—simply providing the data and hoping your clients will know exactly what to do with that information won’t cut it.

I’ll keep repeating this: Cloud is the future … not blockchain. This appears to be especially true when it comes to exchange technology. Think I’m wrong or off-base? Let me know: anthony.malakian@infopro-digital.com.