The head of Nasdaq OMX Group says that if his company succeeds in its bid to acquire NYSE Euronext, at least one major data center would be closed in the resulting consolidation of the exchanges' IT infrastructure.
As anticipated, Nasdaq and ICE today announced a joint bid for NYSE, valued at around $11.3 billion, topping the value of NYSE Euronext's planned merger with Deutsche Börse AG. In a conference call, Nasdaq CEO Robert Greifeld said the deal would involve a major consolidation of IT infrastructure.
"One data center will be closed, but we don't know which one would be the best candidate right now," Greifeld said.
New Jersey A Consolidation Candidate?
Which region may be affected? The most obvious candidate would be New Jersey, where both exchanges operate major data centers.
NYSE Euronext recently opened a new 400,000 square foot data center in Mahwah, New Jersey to serve as the home to the exchange’s new matching engines – servers that match buy and sell orders and provide updated pricing information.The new data center features colocation space for trading firms seeking high-speed access to the matching engines. NYSE Euronext says it has sold out all the available colocation space in its first phase at Mahwah – reported to be at least two 20,000 square foot pods. Three additional pods are planned as expansion space, for a total of 100,000 square feet of colocation space.
Nasdaq OMX Group doesn’t own any data centers, but leases a number of facilities. The primary data center for Nasdaq OMX Group (NDAQ) is housed in a Verizon Business facility in Carteret, New Jersey, while its backup facility is operated out of a Verizon Business site in northern Virginia. In Dec. 2009 NASDAQ OMX expanded its colocation agreement with Verizon Business to offer additional colocation space to trading firms engaged in high-frequency trading.
NASDAQ also uses the Amazon Web Services cloud computing platform to data on historic trades and lets investors analyze pricing in relation to news events and earnings calls to gauge the market response. Robert Waghorne, Senior Vice President of European Markets Technology at NASDAQ OMX Group, recently discussed the company’s operations at the DataCenterDynamics NY conference.
Will a consolidation decision be driven by the quality of the infrastructure, or whether a site is owned or leased? How will the global footprints of the two companies factor into any decisions? The Nasdaq OMX has many hurdles to overcome before we'll see any data center consolidation, but this is a clearly a story to watch