Low Latency News

Zero latency is the optimal trading speed that all firms hope to achieve at some point. But until that can become a reality, there is a race to keep reducing latency from all aspects of the trading process. From the server to the messaging to the sending and receiving of data, each piece must be optimized to reach the goal of zero latency.  There are many avenues companies are looking to reduce variables and risk to latency – one of those is proximity hosting.

There are data centers where the trader can actually collocate with the exchanges. For example, in Weehawken, NJ there is a data center that houses five major exchanges including: the American Stock Exchange, Philadelphia Stock Exchange, and BATS Trading. This is a way to ensure there is almost zero latency built into the trade to those exchanges. But it is not the complete puzzle. Even with proximity hosting to collocate within a data center that houses exchanges there are still external servers that play a role in the execution of the trade. These are the data feeds, the platforms and the messaging. Even the data centers that host the exchange as just a cross connect, rarely are they the only exchange a firm is trading on. So how do you close the gap?

The idea of Central Proximity hosting is to find locations that are center to most of the locations you need to access. There are many hosting locations within the NJ/NY trading area: Clifton, North Bergen, and Weehawken, NJ just to name a few that provide central proximity hosting. Central Proximity Hosting is getting within a few miles of all the locations a trade needs to execute.  So that makes up half of the picture – how do you complete the race to speed of light transport?

The network provider does the rest. A Carrier is a good solution for the transport of data when latency and performance are important but not critical. When latency reaches the level of critical you need a more agnostic approach to finding the best network. In working with each Carrier, they will provide you their “on net” best solutions between locations. That is not always the best solution for your specific needs. This is where a network integrator comes into play.

The network provider that you partner with must be able to provide the lowest latency solutions for the metro ring and the longhaul. The network integrator you work with should be Carrier Agnostic, to ensure you are getting the optimal solution for your needs and not a solution based on the relationship an integrator has with a Carrier.   Some integrators, like CFN Services, can even go a step further. They not only can make recommendations as to the optimal solutions for your needs, but they can create new routes specific to your priorities. An integrator like CFN Services can actually utilize optimal spans of available fiber to create new fiber routes that do not exist along any single Carrier.

In the race to Alpha, the combination of Central Proximity Hosting coupled with the Low Latency Transport is key to your success.

21-May
Focus: 4G
Backhaul the Lifeline to 4G
Jennifer Pigg, VP, Enabling Technologies, Yankee Group

Yankee Group research shows that 50% of mobile network failures today can be traced back to problems in the backhaul.  That’s today – mostly voice, little data, almost no video on the mobile network.  Backhaul is not only a bottleneck, it’s a kluge bottleneck.  Service providers, unwilling to put their voice traffic at risk are leaving it on expensive TDM backhaul solutions and offloading data traffic to a parallel packet network.  In this session, we look at today’s dominant backhaul solutions and explain how the service providers will eat up CAPEX dollars and bleed profits if they do not move to more efficient solutions.  We also handicap the solutions available according to how stable we believe the solutions to be in terms of cost, performance, and management, particularly in terms of QoS and SLAs.

Sponsored by, CFN Services

CFN Services was pleased to particiate in Telx’s opening of their new Data Center location in Clifton, NJ.  The event took place April 23rd. The new facility in Clifton is the latest of Telx’ 15 network-neutral and network-rich colocation facilities designed to not only reduce costs for customers by enabling them to connect to one another, but also to even drive revenue for them through these connections. It also addresses the growing trend of businesses looking for a secure location for not only their communications hardware, but their entire IT infrastructure.

CFN Services, sees this location as a strategic way to support the growing Electronic Trading Enterprise firms in the NY/NJ metro. By adding more NJ locations it allows traders the ability to move their traffic to many of the NJ based exchanges without transversing into Manhattan. This also provides diversity and optimization for some of the exchange trades that occur on the other side of the Hudson.  Like Telx, CFN Services is Carrier Agnostic, this allows us to provide the best and lowest latency transport solutions available. CFN Services is able to provide the lowest latency because we can work with multiple Carriers to interconnect the optimal spans of fiber to provide a single fully managed end to end Network.

The A-Team Algorithmic Trading Directory – 2009 Edition is now available for download–with updated information and more profiles. The Algorithmic Trading Directory is the industry’s only reference for professionals active in the algorithmic and electronic trading community. The directory provides an easy-to-use guide to help buy-side professionals understand the algorithms on offer from their brokers and other trading counterparties and suppliers, where to find them, and who to talk with about them.

NEW YORK (Dow Jones)–This is proving to be a banner year for volumes among foreign exchange retail investors, even as institutional traders say 2009 will pale in comparison to the striking growth seen in 2008 and 2007.

Volumes on dbFX, the online retail trading platform from Deutsche Bank, increased 37% in the first quarter of 2009 from the same period a year earlier. Compared to the fourth quarter of 2008, volumes jumped 4% in the most recent period. The latter rise was particularly impressive given sharp volume gains in October, at the height of market fears, when retail investor interest spiked due to intensified volatility.

Other retail platforms have anecdotal revealed the same trend, from big Citigroup to the smaller Global Forex Trading. Increasingly, investors are taking advantage of financial market instability through currency trading, although many warn that the market is too volatile for most non-professional traders.

“More and more people are leaving the equities market and coming into foreign exchange, as foreign exchange is a non-correlated asset over the long term,” said Betsy Waters, global director of dbFX.com.

Euros, dollars, pounds, Turkish lira – none rise and fall alone. Their values fluctuate in reference to another currency. This means no matter what is going on in equities or commodities markets, traders can make a buck by betting on some currency out there. This is especially worthwhile to investors in countries that forbid betting against an asset.

This has proven useful in a year when investors have to maneuver around falling commodities and stocks, and may be searching to diversify.

But part of the rise in retail volumes is also attributable to the fact this sector is relatively new. dbFX itself launched in June 2006. Volumes on dbFX between 2007 and 2008 increased by two-and-a-half times, according to Waters.

On the institutional side, analysts have said it will be hard for foreign exchange teams to compete in 2009 with the volumes they grossed in the previous years.

In addition, the train of thought is different between these two sides.

For instance, the heightened volatility at the end of 2008 was considered too treacherous for bankers. Actual position-taking among these players has been thinner than in previous years since the breakdown of Lehman Brothers and Bear Stearns sent fear through the market. Traders have more rules on who they can deal with. The crisis has also led many houses to disable algorithmic trading models, which had been big volume drivers. In addition, currency market flows in the institutional investor space can change for any number of reasons, like hedging strategies or just a need to move money.

However, trading trends observed at dbFX are not unlike those among larger investors.

Traders moved away from the carry trade, where they were chasing interest rate differentials, in favor of chasing trends. The pairs with the most volumes were the majors – euro-dollar, U.K. pound-dollar and dollar-yen.

-By Riva Froymovich, Dow Jones Newswires; 201 938-5063; riva.froymovich@dowjones.com

Equinix (EQIX) will be reporting 1Q 2009 results on Wednesday, April 22. Its numbers will probably represent a bellwether for the whole colocation sector.

Equinix guidance, given on its last conference call, was forecasting revenues in the range of $198.0 to $200.0 million (consensus is at $ 198.91 million), and EBITDA is expected to be between $86.0 and $88.0 million, with cash gross margins at 63%. The company doesn’t usually issue outlook for EPS, while analysts expect Equinix to earn $ 0.18, with a wide bracket between their numbers, ranging from $ 0.06 to $ 0.29.

The company is also expected to spend a large part of its forecasted 2009 CAPEX in the quarter, with capital expenditures expected to be between $ 100.0 and $ 110.0 million, including $ 20.0 million of ongoing CAPEX.

This quarter should not see a strong impact from currency fluctuations (which we expect just slightly negative for the Euro and the British Pound) like in the 4Q 2008, when the European subsidiary grew on a same currency basis 11%, although it showed a 4.6% decline in US currency.

We also take the opportunity to resume the guidance issued for the whole year, as the wording of the P/R announcing the conference call (the company will discuss first quarter results … and outlook for the second quarter and full year 2009) seems to suggest the intention to update or narrow full year outlook:

• For the full year of 2009, total revenues are expected to be in the range of $855.0 to $875.0 million. Total year cash gross margins are expected to be approximately 63%. Cash selling, general and administrative expenses are expected to be in the range of $160.0 to $170.0 million. Adjusted EBITDA for the year is expected to be between $365.0 and $385.0 million. Capital expenditures for 2009 are expected to be in the range of $325.0 to $375.0 million, comprised of approximately $60.0 million of ongoing capital expenditures and $265.0 to $315.0 million of expansion capital expenditures.

Read More

One of the great things about colocating at a location like Telx, is the availability to network providers. When deciding who to colocate with you need to ensure that the data center is Carrier Agnostic. That means they do not select which Carriers are allowed in their facility, but leave it open to all. When selecting Networking solutions, Carrier Agnostic comes in to play again. When a Carrier provides a quote for the best connection between two points, many times they are only providing you THEIR best connection between those two point. Their connection is not always the BEST connection. Working with Network Integrators allows a client to get the BEST not the BEST we have. Companies such as CFN Services, who utilize optimal spans from multiple Carriers, can provide the best connection between point A and point B. They are not restricted by the confines of an already established footprint, they are creating new routes to best meet each of their clients needs. CFN Services is glad to be one of Telx’s Partners offering Low Latency Networking from many of the Telx locations.

Mark Casey, President of CFN Services,  is a featured speaker at the Datacenter Dynamics Conference, April 21st. The event is taking place in Washington, DC at the Renaissance Hotel.

The session Mark will participate in is entitled, “How Will the Information Superhighway and Data Center Fabric be
Reshaped by New Demands of Content and Data?”

Abstract about the session:

Once ranked 4th in the world by the OECD, the U.S. has fallen to 15th among developed countries in broadband penetration. Initiatives for green infrastructure and smart energy grids are one thing, but they all must be connected – the backbone of the digital recovery is fiber. Over $6.5 billion in funds for broadband expansion will be spent, but that will depend on a new definition of network neutrality from the Federal Communications Commission

* How will grants be channeled to local governments, ISPs and consumers?
* Will neutral network management requirements discourage ISPs from applying for broadband expansion grants?
* Determining the impact of virtualization, cloud computing, and data and content warehousing requirements on advanced automation, analytics and fast reporting
* Maximizing energy efficient performance at the lowest possible price

Switch and Data is now offering the Tabb Group report, Financial Services Data Centers: Power, Proximity and Profit, as a free download from their website.

There was a part of the paper that intrigued me and justified why CFN Services is in the Electronic Trading Space. CFN Services touts the electronic-trading-overview between Chicago and New York/New Jersey trading areas and many European Exchanges. CFN Services also is able to provide custom fiber solutions globally for Trading Firms. Those facts are fairly well known among the Trading firms. But this overlooks one of the greatest strengths of CFN Services, which is the ability to provide route and market intelligence to all of a Firms network. The biggest question many Firms are asking themselves is, “I don’t know what I don’t know, is there something we are overlooking?”. CFN Services, along with their FiberSource® platform, allow a client to really understand all options available to them and to know the exact physical path they currently have. As it states in the quote below, from the Tabb Report, Financial Services Data Centers: Power, Proximity and Profit, getting from point A to B is not a constant in the fiber access business. The latency between carriers can be significantly different and in turn their paths can take circuitous routes that effect overall mileage. Working with a network design and implementation partner such as, CFN Services, allows you not only knowledge of your existing routes, but the ability to effect change to those routes. CFN Services has the ability to work with optimal spans from multiple carriers to provide you the best latency solution you require. Being Carrier Neutral, allows CFN Services the breadth to pull together the solution that best meets your needs depending on your priorities for latency, price and time to implementation.

Page 15 from Tabb Report
“For example, while one carrier might provide a cheap connection to Chicago, a rival may have considerably less costly access to London. Beyond cost, some carriers provide faster access to certain markets. This is not based on the type of cable, as most fiber-optics are created equal, but on the exact path between point A and point B. Data centers are not connected by straight lines of cable, but by a web of fiber that was laid over the past 20 years. Therefore, clarity of the path an electronic order must take to get from the data center in Manhattan to the execution venue in New Jersey is critically important to understanding true latency. “

Why WiMAX?

Thanks to iPhone, Android and the carriers; AT&T and TMobile, it is clear that 3G is a new standard for the digital phone consumers. They are buying up the phones and increasing their services from their wireless provider. But are they frustrated, the phone is so robust but can the backend support the front-end? Do the carriers have the bandwidth required to meet the needs of multimedia applications on the go – such a video conferencing from the wireless device. That is where 4G comes into play – the most exciting aspect of the 4G phones is the download speed – expected to be 100 Mbps – and its equally awesome 50 Mbps upload speed.

Some companies such as Sprint are skipping the 3G world and hyper speeding right into 4G WiMax. The good news for Sprint is consumers have proven they will pay for the speed and quality of a good network with a phone with applications that meet their daily needs. The frustration of the lack of speed for downloads and video will naturally move the consumer to the desire for the 4G networks and they will incrementally pay more for that service.

One thing is for sure, Carriers are investing a lot of resources into their WiMax 4G networks. According to the Telecommunications Industry Association (TIA), carriers in the United States are expected to spend $4.4 billion on WiMAX infrastructure equipment in 2008. Considering that WiMAX is only one potential 4G standard, industry watchers are expecting carriers to drop a lot of dough on 4G gear.

How do the wireless providers invest in new networks during a downturn in the economy and uncertain futures? They need to find ways to be more efficient then they have ever been. They need to work with partners that will ensure they are building in the most cost effective matter and not just sole sourcing with a single vendor. They need to ensure that their networks are standing up to the SLSs in place and are providing the throughput they are paying for. The carriers need to look for partners such as CFN Services

CFN Services is not a fiber company, we acquire fiber from the most efficient and cost effective way – when it makes sense we are able to lay new fiber and complete the installation from end to end. CFN Services is able to take the day-to-day management of the build out away from the carrier and allow the carrier to spend their time on the overall build – out plans and benefits. CFN Services is able to provide a timely analysis of an area and provide the ideal bandwidth mix that is required to provide a robust WiMax platform that will maximize cost efficiencies without derogating any network quality. By working with multiple fiber companies CFN can piece together the highest quality of bandwidth and manage all the contracts and SLA’s for the carrier; while providing cost savings to the Service Provider. CFN supports the design, AAV support and TCO for a carrier. CFN also can implement and manage Fiber based MAN solutions in markets that the Service Provider is looking to have a WiMax presence. CFN Services is your partner for your mobile backhaul and new market expansions.

One a recent contract with a Service Provider, CFN Services analyzed 10,000 WiMax deployment sites to identify 3,000 sites that were proximate to fiber for use as backhaul hubs. Those 3,000 went into an RF design phase where a subset of 500 actual hub sites came back which we then designed physical fiber network to provide high capacity low cost backhaul. Because of this work, CFN Services
was able to save the provider over $615,000 for a 13-market installation.