Market Data Exec Grapples with Technology Issues

The market data industry is due for major changes in the coming months and this week's Securities Industry Association (SIA) market data conference entitled "Spotlight on Market Data---What You Need to Know in 2001" presented some of the major issues and challenges facing the market place. On Thursday a panel brought together three top level market data executives from major firms to explore and discuss market data management and their positions within their respective organizations. Peter Esler, managing director and head of market data service at Bear, Stearns discussed the important aspects of technology strategy important for firms managing massive amounts of market information.

In the ever changing world of technology, Esler pointed out that the increasing amount of e-commerce applications, as well as the always talked about capacity issues and globalization are all coming together to present some major challenges in the realm of market data technology. And with the pool of trained technology resources becoming thinner and thinner, firms are faced with even greater technology challenges.

Esler advised that firms evaluate and understand their architecture standards as a starting point when developing or improving upon their market data technology strategy. "Years ago, we all wanted the biggest system as fast as possible," said Esler. "Now we need to think about other things, about outsourcing, or hosting and moving it completely off the premises." He said that a tiered approach to delivering market data is also important as most firms have some combination of low-, mid- and high-end data they are dealing with.

Firms must also consider staff expertise as an additional component to the technology strategy and whether to keep it internal or outsource with consultants and the like. Esler added that while its important to concentrate on training internal personnel as much as possible, turning to outside sources might also be necessary. "At some point you're going to run out of staff and you're going to run out of expertise," he said. "So maybe there's a hybrid model in between to explore."

Timelines for technology initiatives are also important and firms should consider carefully whether they need to update their legacy systems or replace them altogether and which would be the most time efficient. "We're being challenged with the ECN marketplaces, with extending our applications out to the buy side firms." Esler said. "The pace of change and technology is so rapid that the question is can you build it and will they come?" In other words, firms should consider whether if they build something would it be obsolete by the time it is finished or is their legacy system completely outdated and replacing it necessary? Either way, time is of the essence when it comes to a technology strategy for dealing with market data.