Nasdaq, a technology company serving the capital markets which operates the Nasdaq Stock Market, today announced a multi-year partnership with Amazon Web Services (AWS), a cloud service provider, to bring its capital markets operations onto AWS’ cloud-based infrastructure. Starting in 2022, Nasdaq plans to migrate its North American markets by leveraging edge computing solutions including AWS Outposts and a private AWS Local Zone, which will be housed at Nasdaq’s primary data center in Carteret, New Jersey, namely Equinix NY11.
Nasdaq’s desire to move to its market infrastructure to the cloud is driven in-part by its surging data volumes. For example, through its market systems, the company facilitates 60+ billion messages daily, during the most volatile trading days. Additionally, every evening, Nasdaq receives 122+ billion records that it needs to load into its data warehouse for billing and reporting processes, prior to the markets opening again the following morning.
Overall, Nasdaq’s cloud migration to Amazon Web Services (AWS) will occur in phases, starting with Nasdaq MRX, one of six U.S. options markets operated by the company. Over time, Nasdaq plans to move additional North American markets to the cloud with AWS, however its timeline is unclear.
Cloud-Based Capital Markets – Nasdaq and Amazon Web Services (AWS)
Nasdaq will utilize edge computing to shift its market infrastructure and trading systems to the cloud. This edge computing will move Nasdaq’s data storage, processing, and analysis closer to endpoints where data generation occurs to deliver near real-time responsiveness for its capital markets applications.
AWS’ edge computing hardware and services will allow Nasdaq to deploy applications and tools outside of AWS data centers in metro areas, 5G networks, on-premises locations, and on devices. In turn, Nasdaq will gain cloud-based market infrastructure that is more reliable, resilient, scalable, accessible, and secure for all market participants. Accordingly, Nasdaq will continue to seamlessly transact billions of dollars in trades every day, even as its volumes rapidly grow.
AWS Outposts – Foundation of Nasdaq’s Cloud Markets Infrastructure
AWS Outposts extends AWS infrastructure, services, applications, and tools to virtually any data center, colocation space, or on-premises facility. Nasdaq plans to incorporate AWS Outposts directly into its core network to deliver ultra-low-latency edge compute capabilities from its primary data center, for its U.S. Equities and Options Markets.
Nasdaq’s primary data center is located at 1400 Federal Boulevard, Carteret, New Jersey and is operated as the Equinix NY11 facility.
Equinix’s NY11 data center is a one-story building which offers 91.4k sqft of colocation space. Importantly, this facility is connected via high-fiber count long-haul routes which link-up to key financial services-oriented data centers in the New York and Chicago metros. Particularly, these facilities include 755 Secaucus Road in Secaucus, New Jersey (Equinix NY4) and 350 East Cermak Road in Chicago, Illinois (Digital Realty).
Private AWS Local Zone – Nasdaq’s Data Center
To deploy AWS’ edge computing solution, Nasdaq will establish a private AWS Local Zone, available for Nasdaq’s use only, within its primary data center (Equinix NY11). Specifically, AWS Local Zones place compute, storage, and database services close to large population and industry centers. In turn, Nasdaq will use these proximate services to provide end users with low-latency access to applications running locally.
Nasdaq’s hybrid infrastructure setup enables it to have low-latency access to its on-premises systems to deliver high-frequency trading capabilities. At the same time, Nasdaq, in-partnership with AWS, can provide its clients with access to cloud-based capabilities at a lower cost, which include virtual connectivity services, market analytics, and machine learning.
Presently, many high-frequency trading firms rely on colocation at local data centers to secure the lowest possible network latency. However, there is an inherent compromise with this strategy. Colocation facilities are not optimal for storing significant volumes of data or running intensive analytics workloads. As such, the cloud provides a solution, offering elasticity – provisioning resources as and when needed.
Nasdaq – Journey to the Cloud
Nasdaq’s cloud partnership with Amazon Web Services (AWS) will benefit its core trading, clearing, settlement, and surveillance services, which now require ultra-low-latency capabilities. Specifically, the company provides these services to 130+ market infrastructure clients including exchanges, banks, clearing houses, central securities depositories, and regulators.
Overall, AWS’ cloud-based infrastructure allows Nasdaq to provision for additional capacity needs at critical times, without impacting other workloads of its day-to-day operations. As a high-volume market environment persists with idiosyncratic periods of volatility, Nasdaq will leverage the on-demand scale, elasticity, and flexibility that cloud-based infrastructure provides.