CFN Services Expands Cloud-Based Alpha Platform in Europe

Network and hosting provider CFN Services is expanding its presence in Europe with the deployment of its cloud-based low-latency data delivery and trade execution platform, Alpha Platform On-Demand, in London and Frankfurt.

Mark Casey, president and CEO of CFN Services, says the expansion is a natural progression for CFN, as it seeks to extend connectivity between key European and North American financial centers.

"We've been in the major European markets now for a few years, and we're seeing demand for additional markets in Europe for our core Alpha platform, which is our managed proximity hosting platform, and we're adding the on-demand component to Europe for the same reason," he says. "US-based hedge funds that are trading European counterparties need a way to decentralize their architecture without the overheads of administration. Through a portal I can use the server that's connected to any of the European markets and I can begin trading on those markets without having to go out and secure hosting space, ship and rack and stack servers, connectivity and all of that, so it's a natural progression on multiple levels."

CFN has been focused predominately on the North American market and North American firms, says Casey, but this expansion is an effort to change the dynamic of CFN's business, by aiding European firms with trading in the North American market and putting more feet on the ground in Europe.

The Alpha Platform On-Demand technology is a public cloud, delivered on an on-demand cloud computing environment, which will now have proximity locations in London and Frankfurt, before the expansion continues to additional hubs in Madrid, Milan, Moscow, Stockholm and Zurich.

It's not going to be better than running your own dedicated servers in a proximity-hosted environment, but the costs associated with that can be considerable.

Casey says the on-demand service is also applicable to the front and middle office, as well as back-office applications, providing an efficient and cost-effective alternative to dedicated servers in a proximity-hosted environment.

"It's not going to be better performance than running your own dedicated servers in a proximity-hosted environment—that's still the ultimate, and what our core Alpha Platform supports—but the costs associated with that can be considerable," he says. "You've got to look at hedge funds that are focused on a combination of optimized latency and cost. The On-Demand Platform can be a great fit that can improve both their performance and their cost profile."

Casey says he has noticed a trend among hedge funds to move to automated trading. "More and more hedge funds are automating their risk models, moving in to what we call low-frequency trading—maybe they were processing a couple hundred trades a day and now they're going to process 1,000," he says. "As a result of that, they're looking to decentralize architecture relative to automated trading models, so they can maximize profits. That's a movement sort of down-market in the broader hedge fund space."