Opening Cross: Performance Anxiety Doesn't Only Apply to High Performance

Of course, the cost of technology to achieve that─and the cost of competing at that level─is extremely high, with top teams spending hundreds of millions of dollars each year on cars, engines, drivers and mechanics, not to mention the cost of a license to compete in the sport. In fact, the cost of making it to the top used to be even higher before the sport's governing body placed certain caps on what teams could spend. Prior to that, the teams with most sponsorship could afford to manufacture parts from ridiculously expensive and rare lightweight alloys that could contribute to the car's overall performance. The problem was that these performance-enhancing technologies were out of reach of the smaller teams with smaller sponsorship budgets, creating a chasm between the performance of the richest and poorest teams.

The same has been true of financial firms competing for a slice of trading revenues via automated trading strategies that depend on low-latency data in recent years. Some firms were willing and able to spend a small fortune on buying or building the fastest platforms and licensing the lowest-latency datafeeds, secure in the knowledge that each dollar spent would yield multiple dollars in returns. Others, meanwhile, saw the writing on the wall and weighed their spend against the returns, and decided to focus their efforts elsewhere on more productive and profitable business areas. In short, some decided that if they couldn't reliably be among the top players, it wasn't worth competing at all.

But there's no escaping the need for high-performance technology, even among those whose business model is geared towards others beyond the high-frequency trading crowd. For example, startup Canadian exchange Aequitas NEO has declared its ambitions to deliver a level playing field for issuers and investors that discourages HFT and predatory trading strategies by introducing a "speed bump." Yet that doesn't mean that the exchange and its participants don't need the latest technologies to get the most out of their participation. The exchange recently announced its usage of low-latency server input/output adapters from high-performance technology provider Solarflare to provide precision timestamping and network performance monitoring─not because the exchange wants to promote itself as having the fastest technology, but because it wants to demonstrate its liquidity and transparency. Meanwhile, St. Louis, Mo.-based hardware ticker plant vendor Exegy─more often associated with high-performance computing and low-latency, high-capacity data processing and distribution─recently rolled out a feed handler for Aequitas, calling its offerings "symbiotic" with Aequitas' ambitions.

"Aequitas is coming at this from a ‘fairness in the marketplace' perspective, and we are not at odds with that. Our hardware and managed service model delivers efficiency, and that efficiency amounts to less power and space in the datacenter, which lowers total cost of ownership for customers," Exegy chief technology officer David Taylor told IMD's Faye Kilburn last week..

Sometimes investments in new technology aren't about achieving the highest performance or returns, but rather about achieving greater efficiency, as in the case of Aequitas─or indeed, several other initiatives in this week's issue. For example, datacenter provider Equinix─often considered the new marketplace for trading activity in the modern age of co-location─is opening a raft of new datacenters around the world, including its sixth in the New York metro area, though this location will be geared towards mid-tier customer needs for more space suited to larger deployments, and broader connectivity requirements, rather than a laser-focused co-lo for one market. Or, consider how both consultancy Jordan & Jordan and inventory management platform vendor The Roberts Group are applying new technologies to automate usage reporting and to analyze their data inventory, respectively─neither of which might be considered high performance, but both of which perform important roles around data compliance.