Over the past decade, the adoption of electronic trading has grown steadily, accelerating the requirement to expand digital infrastructure at the core and the edge—worldwide. The next wave is the cloudification of global capital markets. In parallel, digital ecosystems have become the epicenter of innovation as financial services companies, including capital markets, discovered the tremendous value of collaborating with other companies from across the industry.
According to the Global Interconnection Index (GXI) Volume 5, the financial services industry accounts for 18% of the global interconnection bandwidth mix, by far the most of any industry. This shows that financial services companies are highly dependent on direct, private interconnection with partners and customers to fuel their digital transformations, modernize services and enable a better user experience.
The report also highlights the fact that nearly a third of all global interconnection locations have high concentrations of specific industry and ecosystem clusters in carrier-neutral colocation facilities. For example, the New York area has a deep concentration of financial services/capital markets companies and industry-specific service providers, fueling innovation in the sector.
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Capital markets companies are increasingly prioritizing collaboration, establishing a range of partnerships to provide valuable services and new capabilities to their customers. Take Nasdaq, for example. From its roots as the first electronic stock exchange, it has grown to become a leading global exchange and technology company, providing data, analytics, software and services across six continents. Partnerships with companies like Amazon Web Services (AWS) and Equinix make it possible for Nasdaq to offer new services and solutions to its market customers—in all the right places and at the right time.
The right partnerships power journeys to the cloud
Nasdaq’s journey to the cloud started over a decade ago. Our partnership began when they toured the Equinix data center in New York just after it opened, before moving in the next year. For more than 13 years, Nasdaq has leveraged Platform Equinix® to support its extensive customer and vendor ecosystem across the world, enabling low-latency access for workflows that support the full trade lifecycle. This includes price discovery and analytics, in addition to other pre- and post-trade tools.
Nasdaq also became an AWS customer in 2008, launching its Market Reply service through the cloud company’s infrastructure. Today, several Nasdaq services and offerings are powered by AWS.
In November 2021, Nasdaq took the next major step in its cloud journey—announcing a multi-year partnership with AWS to establish a cloud-based infrastructure for all market participants. Nasdaq will begin migrating markets to AWS in 2022, starting with the U.S. options market.
Over the last decade, Nasdaq and AWS have developed a strong relationship rooted in trust, innovation, and commitment. Nasdaq has always been an early adopter of digital technologies and has worked with the broader industry, clients, and regulators to gain necessary experience and conviction to move their markets to the cloud.
“Over the last decade, Nasdaq and AWS have developed a strong relationship rooted in trust, innovation, and commitment. Nasdaq has always been an early adopter of digital technologies and has worked with the broader industry, clients, and regulators to gain necessary experience and conviction to move their markets to the cloud. Specifically, over the last three years, Nasdaq and AWS have co-designed an edge compute platform leveraging AWS Outposts, that is packaged and tailored for ultra-low latency capital markets use cases. These edge devices, deployed directly at Nasdaq’s primary data center in Carteret, New Jersey, are the next step in Nasdaq’s cloud journey with AWS. They will support the creation of a U.S. Markets enclave by establishing AWS’s first-ever capital markets industry-specific Private Local Zone.”
-Scott Mullins, General Manager, Financial Services, Amazon Web Services (AWS)
Digital ecosystems have become the epicenter of innovation as financial services companies, including capital markets, have discovered the tremendous value of partnering with other companies from across the industry."
The next phase of these partnerships starts at ground level
In December 2021, Equinix announced a multi-year partnership with Nasdaq to scale out their digital infrastructure within the Carteret data center and support the implementation of the AWS Outpost cloud solution. This investment by Equinix will equate to doubling the current available space, as Nasdaq advances one step closer to moving its markets to the cloud.
Equinix hosts the largest multi-asset class electronic trading ecosystem in the world, enabling market participants to trade across equities, derivatives, commodities, foreign exchange and fixed income markets. Its financial ecosystem ensures security and reliability for managing risk and regulatory compliance.
On May 3, 2022, Nasdaq, AWS and Equinix came together to participate in the groundbreaking of the NY11 expansion. Construction of the facility expansion is expected to be complete in 2024.
Nasdaq’s current and planned deployments within Equinix IBX® data centers include Canada, the U.S., Europe, and Asia-Pacific, with additional expansions anticipated over the next several years.
Advancing the evolution of digital infrastructure at Equinix
The Equinix global footprint includes PoPs in the top global financial centers, and we have a solid track record of investing to support the growth of the electronic trading community. Expanding our NY11 Equinix data center is just one of many investments we’ll make in the future, beyond the capital investments in the New York/New Jersey market.
The evolution of digital infrastructure in financial services has led to immense opportunities for our customers and partners to grow and scale their digital presence. We are committed to Nasdaq, as it leverages our robust financial ecosystem to transform its industry over the next decade and beyond. Our commitment extends to AWS with the expansion of its cloud infrastructure in our NY11 data center."- Jon Lin, Equinix EVP & General Manager, Data Center Services
As the world’s digital infrastructure company™, Equinix uses its extensive reach to support Nasdaq in the U.S., Canada, the U.K. and Hong Kong, and AWS in 39 markets. Our global teams drive this support by leading local dialogue with 1,200 financial firms around the world, fueling the growth and diversification of the financial ecosystem. Equally important, these partnerships underscore our mission to innovate with partners, while acting as trusted advisors to help them best serve their customers.
AWS in Equinix Locations
Finally, Equinix actively consults with customers and partners on how we can best meet their evolving requirements for digital infrastructure. We are continuously developing and enhancing technologies such as Equinix Fabric™ software-defined interconnection, Equinix Precision Time® synchronization services and others, to support the demand for ultra-low latency and advanced connectivity options.
Read the Platform Equinix vision paper for insights into the future of digital infrastructure.