Here’s an interesting NY Times piece about a shift that has been occuring in the US financial market. It relates to the cloud and to data centers in general. I say the cloud because one aspect of the cloud is that our data and services are just “out there”, somewhere, in the cloud. The key company, Direct Edge, is now handling about 10% of US stock trades daily.
The article goes on and covers data center and connectivity with some pretty solid detail.
A few key tidbits:
- Latency is dropping – NY to Chicago roundtrip of 13.3 ms, Halifax, NS to Somerset, UK roundtrip of 60ms (I can’t get <80ms on most days from my house to the servers running most bandwidth tests.) This drop will allow further separation for disaster recovery and “100% uptime” design goals.
- Rack Rate – $25K/month per rack of computers is the colo price for a new data center in Chicago (run by the Merc.)
- High Frequency Trading is driving the changes, especially the improvement in latency times.
Side Note: There’s an interesting article in Wired about the impact that AI and flash trading is having, particularly with some trades that occured during the “flash crash”. Accenture traded at $0.01, with 112 broken trades in 8 seconds. Apple traded at $100,000 at one point as well. Details on the report here.
