The cloud is perhaps the biggest Internet business buzzword these days, and the prominence of the concept has two major results:
- Understanding: Businesses consider what this notion of the cloud has to do with their specific niche, and how understanding and utilizing the cloud might give them a competitive advantage.
- Misunderstanding (see below comic): Any time an idea becomes a highly marketable commodity, misconceptions abound as companies scramble to attach themselves to it and redefine it as a way to create leverage for their own businesses. Plus, the cloud is a very broad concept, encompassing numerous Internet services: software, platform, network, infrastructure, etc..
Wall Street, trading firms, and investors around the world are ever more aware how the cloud can be a great advantage in the markets. The New York Stock Exchange even released a cloud-based trading tool in 2011 to increase the efficiency of investment computing and give everyone connected to the system faster information.
The NYSE cloud added a third-party software-as-a-service (SaaS) application called Tick last month as well, further demonstrating how vital the cloud (both NYSE’s and in general) has become to trading operations. Beyond the activities of the NYSE (a for-profit, publicly traded company as of December 2005), other companies are creating their own cloud platforms as well to assist investors by improving their ability to gather information and act quickly, with full toolsets at their disposal.
What is a cloud-hosted or cloud-based system?
Any type of service or platform or network that is described as “in the cloud” is delivered through the Internet rather than existing on an individual’s or business’s hardware. Gmail, for example, is cloud email. Pandora is personalized cloud radio. You can see how, in a sense, cloud just refers to the Internet.
However, it’s a little bit more complex than that. Cloud hosting involves utilizing a network of different servers rather than using dedicated servers that are all yours (or the company’s site you’re accessing). The advantages to using cloud hosting (such as for an investment website or an investment application) are the following:
- sleeker/faster/more efficient
- cost-effective
- multiple instances on various machines: it’s built for redundancy
- highly scalable.
Regarding speed of the cloud (first bullet), it is chosen as a “place” to situate websites and applications because there is much less latency. Latency (time between request by client and delivery of data) slows down an investor’s (or anyone’s) ability to quickly receive and respond to information. Latency is reduced because in a strong cloud structure, requests are answered by servers in close geographical proximity to the user.
New York Stock Exchange & cloud trading
In June 2011, the New York Stock Exchange unveiled the Capital Markets Community Platform. The idea behind the platform-as-a-service tool was to make everything faster and, in a sense, level the playing field for those wanting to participate in trading. It also included extensive analytics on possible investment choices. It’s one thing to be able to trade quickly, but to have up-to-the-second, reliable graphic and numerical information is priceless for investment purposes.
Stanley Young, who is the CEO of NYSE Technologies – the branch of NYSE Euronext that developed the software – discussed the primary reasoning behind the application when it was released. He believed it could serve critical functions for businesses so that they would not have to develop their own sophisticated, market-integrated programs in-house, “giving them the opportunity to focus on their core business strategies.”
Although the NYSE claimed at the time that its software was the first of its kind developed for the investment industry, that’s not correct. For example, at the time NYSE’s system was announced, Radianz (built by BT, a firm in the United Kingdom) already had 15,000 users. Notably, the virtualization ecosystem VMware was used for the development of both Capital Markets and Radianz.
New York Stock Exchange: First Derivatives’ Tick & other solutions
In September 2013, NYSE Technologies made a major change to its cloud. It added a software-as-a-service (SaaS) application to its cloud that was built by an outside company. In a very rough sense, it’s similar to a plug-in for WordPress. NYSE has a platform established already on the cloud, and it has the audience. First Derivatives, the outside company, created useful software built for that system that NYSE is advancing.
As exhibited by Radianz (above), improving the experience of investors by utilizing cloud hosting and cloud computing is by no means limited to the NYSE. Another major player in the cloud investment field is MarketSimplified, which utilizes cloud middleware for speedy information transmission. According to the company’s own statistics, its platform is responsible for approximately 9% of all trades (as of April 2012).
Taking your investments to the cloud
Are you in need of a cloud solution for your organization’s network, website, or application – whether for investment purposes or otherwise? Be sure not to get stuck in the gray areas of the cloud, as expressed in the above comic. Those gray areas also create competition between legitimate and illegitimate cloud hosting services. Choose the right one.
by Kent Roberts
