Infrastructure

03:34 PM
Connect Directly
Facebook
Google+
Twitter
RSS
E-Mail
50%
50%

OneMarketData Releases Cloud Adoption Survey

77.27% of respondents expect to increase their use of cloud in the coming year.

According to a new survey on cloud adoption in capital markets, an overwhelming 72.7% of respondents are not leveraging public cloud services to support trading, but 77.27% are thinking about using cloud in 2014. Clearly a year of change is ahead of us.

The survey released Monday was compiled by Louie Lovas, director of solutions at OneMarketData. "Despite an acceptance of cloud’s well-known benefits - lower costs, rapid scaling and solution flexibility the capital markets industry has overwhelmingly avoided cloud services to date. Yet the motivation is mounting," he writes.

[For more from OneMarketData, Trusted Analytics Biggest Obstacle in Social Media Adoption, see their social media survey.]

78.3% chose data storage as the service they consider most appropriate for cloud computing solutions, followed by large-scale trade model back testing, quantitative research, and transaction cost & post trade analysis. All data intensive use cases. Market data, news content and social media content were also deemed 3x more suited for cloud storage/deployment than orders and execution.

In an interview Lovas said these results were consistent across trading styles of respondents which come from the investment bank, asset management, prop trading and academic community.

So what's the holdup? Barriers to public cloud adoption were dominated by concerns of security, control, flexibility, performance and latency. At 41.3%, a lack of readily available integration to data sources (i.e. market data feeds, trading venues) is also a common barrier to adoption. Lovas believes this is consistent with the mere 13% of respondents who believe trade execution is an appropriate use for cloud computing solutions. "More likely they don't want to do trade execution because they just can't," he says.

Cloud Appeal

Lovas explains this survey was designed to learn what aspects, over and above cost management and control, the buy and sell side financial firms are really after. "The results validated what we were seeing and hearing," he said. "Maybe to some degree a little stronger than I would have anticipated."

He finds the buy side, typically smaller and leaner, are more likely to jump to a public cloud. The sell side, larger and more data heavy organizations that typically have deployments siloed in databases, are more interested in a coalescent infrastructure, making the private cloud more appealing.

Simply put, private cloud makes current data infrastructure more efficient by virtualizing, and more self serviced, allowing for a cutback in IT staff. It's appealing for firms interested in privatizing and improving what they have already built. "Private cloud is going to have better use of trade execution by its very design," says Lovas.

Cloud adoption will evolve towards a hybrid model, concludes Lovas. Traders looking to capture alpha will be lured by the cost reductions of hardware infrastructure and IT, whether that be on a private of public cloud. 54.3% of respondents felt hybrid - a mix of public and private - is the most effective style of cloud for their organization. Becca Lipman is Senior Editor for Wall Street & Technology. She writes in-depth news articles with a focus on big data and compliance in the capital markets. She regularly meets with information technology leaders and innovators and writes about cloud computing, datacenters, ... View Full Bio

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
Becca L
50%
50%
Becca L,
User Rank: Author
11/11/2013 | 3:52:14 PM
re: OneMarketData Releases Cloud Adoption Survey
77.27% (the percentage of firms planning to adopt/increase cloud usage) is such a dramatic number! A title wave of new adopters. In the future, when we look at a chart of cloud adoption, I think eyes will gravitate towards this surge.
IvySchmerken
50%
50%
IvySchmerken,
User Rank: Author
11/11/2013 | 2:34:49 PM
re: OneMarketData Releases Cloud Adoption Survey
Hybrid cloud is a best of both worlds solution, since firms can retain and leverage their investment in trading infrastructure but make it more efficient via private cloud. It sounds like buy-side quants with their needs for storing massive amounts of data and backtesting results are leading the way to public cloud.
Byurcan
50%
50%
Byurcan,
User Rank: Author
11/11/2013 | 1:23:52 PM
re: OneMarketData Releases Cloud Adoption Survey
These results make sense, financial services has been a bit reluctant to adopt cloud by and large, due to lingering security and privacy concerns, but as cloud services become more commonplace, the industry won't be able to ignore the efficiencies they provide.
Register for Wall Street & Technology Newsletters
White Papers
Current Issue
Wall Street & Technology - July 2014
In addition to regular audits, the SEC will start to scrutinize the cyber-security preparedness of market participants.
Video
7 Unusual Behaviors That Indicate Security Breaches
7 Unusual Behaviors That Indicate Security Breaches
Breaches create outliers. Identifying anomalous activity can help keep firms in compliance and out of the headlines.