German Stock Exchange Cloud

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The Deutsche Börse, the operator of Euronext derivatives exchange and the German Stock Exchange, will begin trading soon in the cloud computing system.   Beginning in the first quarter of next year, buyers and sellers of at least one terabyte in the cloud-computing dataspace, will be able to match supply and demand via the new platform run by the exchange, with real-time Quotes. The cloud, which essentially stores data away from a physical computer, will now offer “ Data-On-Demand” from a remote server. As more companies consider storing their data, this new and ever expanding form of external storage is becoming increasingly in demand.   Recently, the IT advisory firm International Data Corp, forecasts annual growth rates of up to 40% in Europe’s cloud infrastructure business market over the next seven years as it tries to catch up with developments in the U.S. and Asia.

Deutsche Börse’s new Cloud Exchange AG, has entered into a joint venture agreement with Zimory, a Berlin-based software developer that offers a Hybrid Cloud Infrastructure in the cloud capacity, and hopes to be a “catalyst” for that growth. Zimory offers a single center for all cloud resources, which allows a trading group such as the Deutsche Börse, to efficiently and transparently manage a suite of Hypervisors. In the past, the German Stock Exchange has traditionally had marketplaces for stocks, bonds and derivatives, and has already gained some experience in the new market when it launched the EEX European Energy Exchange.

Several commercial markets in the cloud suite exist, such as Spot Instances and Reserved Instance Marketplace by Amazon Web Services and SpotCloud by Virtustream. However most of these are affiliated with the vendor and have special considerations. Private Clients of the cloud computing services complain about the lengthy procedures required to close an individual cloud contract which can take more than a year. These, and other problematic related areas of concern are being addressed currently. The Deutsche Börse, or the German Stock Exchange anticipates to increase the efficiency and the speed of the process substantially by offering standardized products and procedures for admission, trading, settlement and surveillance via the new technical platform, for which it will charge a fee. Buyers of cloud capacity can choose the location and jurisdiction of the servers and how long they want to rent the cloud, and pre determine the capacity. They can also migrate between vendors, and choose the safety level they want for their data. They can also implement disaster recovery measures, and data speed. A group of early adapters, the first users of the cloud services, which includes IT companies, German and international companies such as the aviation and automobile sectors, are currently working on the details to ensure the marketplace can go live with enough liquidity early next year.

Spot trading of the cloud capacity against payments in cash is expected to start in the first quarter of next year. The launch of derivatives trading, with a time gap between trading and delivery, will be implemented in early 2015, using such platform creations as offered by the new IEX Exchange in the U.S.

The exchange didn’t disclose startup costs for the new joint venture, which projects to be profitable within the next two years. The move has certainly “Peaked” interest elsewhere as well. The chief executive of the Zagreb Stock Exchange, the main Stock Exchange for Croatia, said the cloud computing business “is definitely the future” and could easily serve as a secondary backup for its own system.

 

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