Cloud computing is changing the world for sophisticated institutional investors even those who have never used Internet-based servers to execute a trade or stress-tested a high-frequency trading strategy. The result, according to experts, will be a lower cost structure for performing high-end trades and more widespread access to the computing power needed to develop and execute complex algorithmic trading strategies.
Cloud computing on-demand self-service Internet infrastructure where you pay-as-you-go and use only what you need is growing fast. Revenues in 2009 topped $56 billion for a 20 percent-plus increase from the previous year, according to technology research firm Gartner Inc., which projects the market hitting $150.1 billion in 2013.
What makes computing in the cloud so attractive to institutional investors is that it enables an end user to rent computing time from organizations with huge server capacity, such as Google, IBM, Salesforce.com, Savvis, Microsofts Windows Azure, Amazon Elastic Compute Cloud (Amazon EC2), and Rackspace Cloud.
Firms now have a choice. They can build and maintain their own data centers, which can cost $1 million even if they cover only two or three markets, estimates Ken Yeadon, managing partner of Thematic Capital Partners LLP, a London-based venture capital firm that specializes in trading infrastructure. Or they can use cloud providers servers to test new trading strategies, back test and run time series analyses, and even execute trades. ....