Wednesday, January 19, 2022

Nasdaq partners with Amazon to move marketplace trading to the cloud next year

Nasdaq has teamed up with Amazon to move its North American markets to the cloud starting in 2022.

The move is the latest among exchanges that have begun to expand into cloud software and data analytics. Earlier this month, Alphabet’s Google struck a deal with the CME Group to help the derivatives exchange operator migrate its data and clearing services to the Google Cloud and then eventually to trading and other markets.

According to a statement on Tuesday, Nasdaq will begin trading in the cloud next year, starting with the Nasdaq MRX, one of its options exchanges. Over time, he intends to move more markets to the cloud using Amazon’s web services.

While moving capital markets to cloud platforms could help exchanges reduce costs and has long been considered a distant goal, the technological challenges are enormous. Today’s trading in stocks, Treasuries, futures and other assets is incredibly fast – at a pace that is sometimes measured in nanoseconds or billions of a second – and exchanges try to ensure that all market participants receive updated prices and other important data at the same time. Conventional cloud solutions are not designed for this.

Nasdaq and Amazon said they have jointly developed a new platform that will run at the main Nasdaq data center in Carter, New Jersey.

The rollout will take place over a multi-stage testing period to ensure existing Nasdaq customers are happy with the transition, Tal Cohen, executive vice president and head of North American market for Nasdaq in New York, said in an interview. “We will not migrate to our markets if we believe we are jeopardizing performance or safety,” he said.

Nasdaq, a longtime Amazon Web Services customer, previously said its markets would be migrating to the cloud over the next decade. The deal underlines the success of Outposts, a two-year proposal to better compete with Microsoft, which has touted its enterprise data center expertise to attract cloud customers.

“At the core of Nasdaq’s move to AWS will be AWS Outposts, which will extend AWS infrastructure, services, APIs and tools to virtually any datacenter, co-location, or on-premises facility,” the statement said. “Nasdaq plans to incorporate AWS Outposts directly into its core network to provide ultra-low latency edge computing capabilities.”

Cloud computing allows companies to outsource computing and data storage to large technology companies, rather than running systems internally. It is one of the fastest growing areas in the tech industry. Amazon itself is a leader in this area, as are Microsoft and China’s Alibaba.

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© 2021 Bloomberg LP

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