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


Nasdaq Inc. partnered with Amazon.com Inc. to shift its North American markets to the cloud starting in 2022.

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

Signage is displayed outside the Nasdaq Market Site in the Times Square area of New York. Photographer: Demetrius Freeman/Bloomberg Mercury

Nasdaq will start trading in the cloud next year, beginning with Nasdaq MRX, one of its options exchanges, according to a statement Tuesday. With time it intends to move more markets to the cloud through Amazon’s web services.

While transferring capital markets to cloud-based platforms could help exchanges reduce costs and has been held up as a remote goal for years, the technology challenges are enormous. Modern trading of stocks, Treasuries, futures and other assets is incredibly fast — with the pace sometimes measured in nanoseconds, or billionths of a second — and exchanges try to ensure all market players get price updates and other vital data at the same time. Conventional cloud solutions aren’t built to accommodate that.

Nasdaq and Amazon revealed they’ve co-developed a new platform that will live inside Nasdaq’s primary data center in Carteret, New Jersey.

The roll-out will happen over a multi-step testing period to ensure existing Nasdaq customers are comfortable with the transition, Tal Cohen, executive vice president and head of North American markets at New York-based Nasdaq, said in an interview. “We will not migrate our markets if we think we are compromising on either performance or security,” he said.

Nasdaq, a long-time Amazon Web Services customer, has previously said that its markets will be transitioned to the cloud over the next decade. The deal underscores the success of Outposts, a two-year-old bid to better compete with Microsoft Corp., which has been touting its expertise in corporate data centers to win cloud clients.

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

Cloud computing allows companies to outsource computer processing and data storage to big tech firms rather than operating the systems in-house. It has been one of the fastest-growing areas of the technology industry. Amazon itself is a leader in the space as well as Microsoft Corp. and China’s Alibaba Group Holding Ltd.

–By Katherine Doherty (Bloomberg Mercury)





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