Not content to leave the rapidly shifting financial vertical to the next generation networks, British Telecom (NYSE:BT, news, filings) is readying its own entry into the European ultra-low latency business. The company's BT Radianz Ultra offering is being expanded into the exchanges and MTFs in London and Paris, it has previously focused on New York and Chicago. That surprised me more than a little, you'd think they'd already be in the thick of the fight in London, right? I'm not sure why they aren't in Frankfurt yet, which has emerged as a major destination. Perhaps they will be soon. Now, I don't believe that BT is competing here using its own fiber - certainly not in the USA where they don't really have any. Rather, they are much more likely to be leasing bandwidth from those who do have the fastest routes and are leveraging their existing relationships and reputation with the international financial community.
The PR itself had an interesting summary of the changing architecture of electronic trading platforms:
Over the past five years major investment firms have changed their electronic trading architectures. There has been a move away from a centralised model with remote access to many European exchanges to a more complex decentralised model. Firms have located their trading engines near or within exchanges, requiring the synchronization of their trading strategies with a central location. Electronic trading is now shifting to a new model that is still decentralised but requires synchronisation between the investment firm’s individual trading engines located at each different exchange. Implementing the necessary low-latency technology across Europe that has scalability, speed and reliability has become increasingly complex for financial institutions to manage themselves.
Hmm, decentralized with full synchronization - that does sound complicated to manage.