Aite Group, a research and advisory firm, expects IT spending on global market data infrastructures to reach $7.8 billion by the end of 2010 as the pressure to keep up with speed and market fragmentation continues.
The firm made the prediction in a new report, released on January 2. The report provides an overview of trends surrounding the creation of a high-performance trading/market data infrastructure. It lays out examples of how technology can be employed to provide a competitive trading advantage, and examines the vendors of such technology. Further, it looks at how some major broker/dealers are using the available technology to develop a modern trading infrastructure, and evaluates several of the vendors in the space.
“Trading systems have not kept up with the growth in data coming at them,” says Brad Bailey, senior analyst with Aite Group and co-author of the report. “The complexity of the high-performance infrastructure and the rapidity with which it evolves has created opportunities for specialised vendors.”
Aite Group believes the high level of growth in data volumes has been caused by an increased reliance on electronic and algorithmic trading, as well as recently enacted regulations that stress existing infrastructures in the front offices of global investment banks. However, the company contends technologies such as data normalisation, complex event processing engines, messaging software and distributed cache have enabled firms to meet requirements and maintain a competitive advantage for trading.
The firm says a number of vendors providing these technologies as packaged solutions have mitigated the need for costly and time-consuming systems development and maintenance.
The report provides profiles of key vendors providing solutions in messaging, market data, distributed cache and ticker plant, with detailed looks at ACTIV Financial, GemStone, GigaSpaces, RTI, Tervela, 29West, and Wombat.