Hybrid cloud environments are here to stay, according to attendees of the FIX Trading Community’s Americas Trading Briefing 2019 in Lower Manhattan.
When polled which factors would be most important to the debut or growth of existing trading-system businesses, the greatest plurality of the respondents (45%) cited that it would be a mix between hosted platforms that are compatible with third-party platforms and accessible via the public (25%) or a private cloud (21%) as well as internally hosted deployments (8%).
The results reflect what platform providers Itiviti and FlexTrade have seen for over the past few years.
The majority of clients have been selecting hosted solutions while a firm 20% have chosen to host platforms internally, according to
Lael Wakefield, president, Americas at Itiviti and who participated on a panel.
“In the last three years, I would suggest the minority of implementations have been on site,” agreed fellow panelist Jamie Benincasa, senior vice president and global head of sales at FlexTrade. “The majority are hosted, but we definitely see people wanting to maintain control their technology and software.”
A company’s desire to keep enterprise platforms internal is directly tied to its level of paranoia in keeping its information secret as long as possible, according to Benincasa.
“Things are different on the sell side since they have a regulatory burden,” he added. “They have to worry about client information. Often they decide not to host and insist that everything has to be installed within their firewalls.”
The most significant factor for firms when they are deciding whether to adopt a hosted model is the system that is under consideration, noted Wakefield.
“Being that we are at a FIX conference, one area more and more firms are considering migrating to a fully managed solution is inbound and FIX Connectivity because that is an important, but not critical, aspect of their business,” said Wakefield. “It’s not something that would be considered innovative. It’s something you can hand-off to the experts with better tooling and you can spend more time innovating something that will differentiate yourself from the competition and give you an edge with your clients.”
However, firms should be cautious not to confuse hosted application with cloud-based application since the former does not always imply that latter, noted panelist Scott Atwell, director, FIX Trading Community and manager of FIX trading and connectivity at American Century Investments.