Can High Frequency Colo Support Many Players?

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>>Can High Frequency Colo Support Many Players?

As NYSE Euronext pushes deeper into data center services, many industry-watchers are gauging the impact upon the market for low-latency colocation in Northern New Jersey. Colocation providers say the larger role for the NYSE and other exchanges will bring further segmentation to a fast-growing market, and predict that traders will continue to seek require colocation partners beyond the NYSE.

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“According to our industry checks, the new NYSE Euronext data center is increasing competition in the financial services markets,” said a recent research report from Mark Kelleher and Aron Honig at Brigantine Advisors. “Customers are researching the new product and it appears to be causing hesitation within the customer base.

“While speed is a factor, our checks are indicating that the NYSE is charging 3-7x what Savvis would charge for proximity hosting,” the report added. “Are the microseconds of speed worth the cost? Probably for the larger high speed trading firms, but it will not be for less active traders.”