>>>
hile the terms Proximity Hosting (PH)
and co-location (co-lo) might not exactlyW
trip off the tongue in conversations
between traders in FX or other asset classes, things are
hotting up and there is something akin to an arms
race being fought out between various providers
operating in the space. And, with technology never
standing still, enhancements are always being offered
up in proximity hosting services.
It can be a tad confusing to nail down what the terms
themselves actually mean, with semantics coming into
play. “Even the phrase, proximity hosting, is loosely
defined now,” says Lee Wade, managing director,
Exponential-e, a next generation provider of Ethernet
solutions for the WAN, that this month launched
what it has dubbed the ‘New Gold Standard’ in FX
algorithmic trading latency. Nigel Woodward
“Proximity would mean as close a proximity
as you can geographically achieve. It could be“I can remember years ago when people like [BT]
co-located, but it might not be.”Radianz came out with that expression [PH] it had a
clear meaning. Today, that clarity…well it’s not so
evident any more,” he adds.
www.savvis.net/financial for the vendor’s exchange
feeds and connectivity options).“It’s been hijacked a bit with it meaning lots of different
things. Many companies are jumping on the bandwagon An alternative is provided by Equinix. Its Equinix
to say we offer proximity hosting, in a similar fashion to Financial eXchange (eFX) - akin to a financial trading
how one can see lots of generalist companies hijacking ecosystem - is a neutral marketplace consisting of
the term ‘ultra low latency’ network.” financial markets participants including execution
venues, buy- and sell-side firms, market dataDefinitions
providers, technology providers and financial
As definitions go, co-location reduces the physical networks, who locate servers and infrastructure within
distance to the exchange or market venue to virtually Equinix data centres in order to support highly
zero by physically placing trading engines and reliable, low latency connectivity for a broad range of
algorithmic servers (hardware) at the exchange, whilst market participants.
PH involves broker and client locating their hardware
in the same hub - but not physically at the exchange The second situation would be where an execution
itself. So, by locating in London (proximate) versus at venue maintains its own data centre or uses a third-
Chicago Mercantile Exchange’s (CME) chosen data party provider, and a specialist provider has a centre
centre where matching engines are for trading physically close to it in the same building or a block
currency futures and options. away. And, the third could be that second scenario
but where another vendor also has some space in the
Essentially there are three types of situations. The first same physical building.
is where the infrastructure of an FX execution (i.e.
matching engines) actually fully resides in a data Unlike other providers that might offer just co-
centre run by a provider for example Savvis, a location or perhaps managed hosting in isolation,
NASDAQ-quoted outsourcing provider of managed Savvis accommodates full ‘end-to-end’ solutions with
computing and network infrastructure for IT network services, Software as a Service (SaaS), web
applications. solutions, IT infrastructure as a service and even
consulting services to help wrap some of the solutions
Today, Savvis is a major player in the hosting area but around clients’ requirements.
offers much more than just co-location and provides a
broad range of services - akin to a one-stop-shop - Varghese Thomas, Vice President, Financial Services
spanning managed hosting and other services (see: Business Unit, at Savvis, Inc., in Weehawken, New
|october 2009 e -FOREX 49
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