 Hi, this is Dave Vellante and we're back live at VMworld 2011 and this is Silicon Angles continuous coverage of the Cube VMworld 2011. I'm Dave Vellante with Wikibon.org. I'm here with Fergal O'Sullivan from NYSE EuroText, Euronext, excuse me. And we're really excited Fergal to have you on. This is a great story that we're going to tell. Really talking about how this whole, it underscores how this business is changing. You think of NYSE, you know, this institution becoming essentially a cloud service provider. So let's start with, so you're ahead of platform development, vice president of platform development at NYSE. What's your role there and set up what you guys are doing with this really innovative program? Sure, well as you said Dave, probably about 10 years ago most of the trading that was going on in the New York Stock Exchange was done manually with tickets. You know if you've seen the movie Trading Places guys would be there throwing paper around but over the last 10 years it really has been a very dynamic shift to electronic trading and the NYSE has had to really make a lot of changes to adapt to that and to really help our clients. So what we've been doing now is sort of building on a history of moving into very high-end data centers. We built two major data centers, one in New Jersey, one actually in London just outside London and we've moved our matching engines where the trades get done into these data centers. We've connected all of them on a very high-speed wide area network and then we've provided clients basically with the ability to you know deploy their own systems in these data centers and that really brought us up to about a couple of months ago. My job has been over the past nine months to help develop a cloud infrastructure in those data centers as well so that we're now able to say to clients rather than you deploying servers and you deploying systems we can actually already have those platforms deployed up and running available in these data centers which are very high-end data centers I mean very you know security reliability and so on and you know for more of a pay-as-you-go month to month model where there's an operating expense rather than a capital expense you can actually start to leverage the really that the top stuff that the real high-end trading firms use already. Okay so now if I understand it correctly that's something that you guys were doing internally is that right? Well absolutely we used to do it internally ourselves we've been moving all of our applications into the cloud over the past number of years. And then the light bulb went off and somebody said hey we can actually make a business out of this. Very Amazon like in a way. Yeah and what's interesting is it's a real service that our clients need because the cost of doing electronic trading has just been skyrocketing you know with these very high-end firms buying faster and faster computers deploying closer and closer to where the trading gets done and so some of the smaller guys would have been struggling to keep up and now we're basically providing them with a platform that can give them you know almost equal performance you know for a fraction of the cost. Yeah we had a stat on earlier and one of the spotlights that was a quote from a gentleman at Goldman Sachs saying that every and it was an infinitesimal at least short amount of time and for every whatever microsecond we shave off of a transaction time it's a hundred million dollars a year. Yeah that's a pretty good statistic. Speed and real time is everything in your world. Well it really is I mean we measure if you're almost everything is measured in microseconds many of our pieces are now being measured in nanoseconds so you know if you know Star Trek they were you know into nano this nano that it really is a whole new level of performance and reliability that the financial services firms need and we're giving them you know that type of capability more in an on demand in a compute on demand environment now. Now we just had Prasad Rampalian and Mark Lesher and they were talking about the types of services that they're trying to deploy you know what they do right that's the solutions group they prove it out and they said we're working toward analytics as a service as a solution and that's really what you're doing. Correct. So you're sort of the first instantiation of that solution. Yeah so the focus is on analytics talk a little bit more about that. Okay so so basically the way it typically gets done is that the people are doing low latency trading and that's involving basically quoting and then when there's a match they get a strike and they get an actual trade but they need to before they run these actual applications that are doing all this electronically they really need to test them very heavily they need to figure out do I have the right strategy am I analyzing the incoming data stream am I finding opportunities am I seeing trends and what that requires is access to huge volumes of data so that's sort of the big data. I mean typically you know as an example just to capture one day's worth of U.S. equities and options today is probably about 200 gigabytes of storage so you know it's a terabyte a day it's 50 terabytes a year it's growing exponentially and we're basically providing them now with an infrastructure to sort of start to access that historical data they can then run simulations they can analyze it they can see trends they can find opportunities and then when they feel like they've really got it you know they can run all that in the cloud and then they might take it and take the low latency piece and run it on a physical machine but they've got the actual all the back testing and the reporting when it's done did I hit my goals and did I hit my targets which is obviously important too. Yeah so where are you at when are you actually going to launch the service and start you know signing up customers? Yeah well we did a soft launch already July 1st so we have a number of clients very heavily testing they're now validating that their applications work it's it's really a little bit complicated we have a very high level of security in our in our deployment model we have high requirements for market data which is you know coming down as I mentioned literally millions of updates per second so our clients are testing their applications and we expect in the next few weeks to have two or three clients actually running production in our cloud. What's EMC doing in all this? Is there a bender? Absolutely. Is it more than that? Well yeah both VMware and EMC have been our joint partners on the launch of this cloud we've had a great experience with both firms VMware obviously providing the vCloud director in the virtualization layer EMC providing the VNX storage platform and we actually have we're just about to launch and maybe this is a little preview. Show us a little leg why not. Pretty soon we'll be doing a press release on a cloud advisory service which we're working with EMC consulting on and we really think this is going to be something very very valuable we'll basically be able to walk into a client who's struggling with the debate about what can and can't run in a cloud and you know what what is valuable about the NYSE platform and what could they move in there and we'll be able to do a consulting engagement where we analyze all these applications and we basically will put them through a filter to see are they suitable you know from a functionality perspective from a trust and security perspective and from a cost perspective and then we'll literally give a report that you could go to your board with and say you know here's here are the applications we should put on that that's an interesting service so let's talk about that a little bit what are the the dimensions that you're looking at I mean you guys went through this yourselves to figure out what's appropriate and applicable for the cloud you're drawing on that knowledge what are the dimensions that you're looking at I mean obviously there's got to be you know this cost but there's got to be value dimensions risk give us a little I mean I suppose there they're the initial thing is there are a bunch of filters like does this if I moved my application into the the capital markets community platform will it behave and will it have the features it needs to work right so that's a pretty straightforward one and you know this front office middle office and back office applications and each of them need different requirements so some of them are suitable today some of them we might need to add some example of a feature that would be you know critical so you know the access to real-time market data right is that you know that's an obvious one we clearly do it but other ones might be let's say web streaming quotes to a million possible simultaneous users over the internet well we don't actually have internet connection into our data center intentionally because that's a major security risk right now you can you can get the internet there but we wouldn't really recommend that for example as a real use case for the community platform today better places to put there's better places to put that so we would put it through a functionality filter first then we want to go through the trust one which is okay if I put my customer information there if I put my proprietary trading strategies there could somebody else access that and understand what I'm doing which I wouldn't really want and you know there's an area where NYSE is in a year next is in a very strong position because we're basically applying the same very high level of standards to security that we apply to our own markets so that really is a big strength that we have there but it does mean some limitations in functionality because you know to really secure it it also means you know you have an extra lock on the door right and then the last one is the cost it doesn't make sense is it cheaper to run it in our platform or not and we basically will kick out a very honest results the MC team did a full analysis of our platform and they'll come back out and say you know these five applications are ideal today and these five will be tomorrow so it's a four-pay service correct absolutely good because if it weren't for a pay you then nobody's gonna skin it wouldn't be working happen yeah so yeah I'm always leery of these sort of loss leaders that yeah no this is yeah no this is that's just pure marketing whereas correct if an executive is writing a check you know they have they have a real need correct correct and this is a you know this is a report that you can go to the board with you know and you can and they'll read it they'll understand it and they'll see the value proposition that we're offering fascinating we're talking to NYSE really very interesting case study now how are you gonna measure the success of this I mean obviously there's a there's a top line but can you can you share with us some of your primary objectives and measurements are well I mean I mean we really see this as a very transformative the industry has obviously gone through some major trauma over the last three or four years and you know clients are really looking to obviously cut costs and find new ways of generating revenue the infrastructure and the plumbing has become so cost prohibitive that clients really want to get a shared infrastructure so to us success is actually enabling firms that weren't able to compete at the high end and now they can because there's an entry level that's a lot lower than it used to be and I think it's almost a democratization again a redemocratization however you want to put it we're building a community we're bringing clients in we're bringing vendors in we're bringing third parties in and there is going to be a vibrant environment for financial services firms in the capital markets to use this platform it's really going to shake things up I mean you know you think of financial services you think of always a leader in technology adoption absolutely one of the industries that will clearly tell you CIOs and financial services and I'm going to talk about this publicly because we this is a competitive advantage for us and now you're saying you're bringing to the small guys the capabilities that only the big guys had before that correct you know that is really game changing yeah yeah if you want if you want the sort of the bottom line on it as well we have these giant data centers that are really super you know tier four guided data centers and there's a lot of space in them and we want to fill them with a lot of servers and we think the capital markets community platform will will will generate the demand to do so so I think there's no doubt I mean we talked before I said before it's very Amazon like I mean the Amazon is allowed you know little guys like Wikibon and Silicon angle to have infrastructure that is you know world-class absolutely easily compete with the fact I would argue that our IT infrastructure is better than our larger competitors yeah I would agree you guys are gonna gonna bring that to the capital markets and it's gonna really be fun to watch change the game well Fergalo Sullivan it was a great story and we'll be following it closely love to have you back as you roll it out in the fall and then track your progress really want to see what's happening here how it's changing the markets and what you guys are learning so thanks very much for coming on the queue thank you for having me pleasure meeting you absolutely all right great segment we'll be right back with VMworld live 2011 Silicon angles continuous coverage my name is Fergalo Sullivan and I'm vice president of platform development for MYSE technologies data well information is absolutely critical in the financial services industry there really isn't much else everything starts with a quote when two people want to agree on a price they send quotes out and that data leads to a whole chain of of actions especially when they match and we get a trade