The NJ Trading Hub Powering the Financial Markets
October 14th, 2013 By: Rich Miller
SECAUCUS, N.J. - What do the U.S. financial markets look like? For most Americans, the answer is traders clad in blue smocks watching screens on the floor of the New York Stock Exchange on Wall Street. But in recent years, much of the trading in financial markets has taken on a different shade of blue – the blue lights illuminating the corridors and cages of a huge data center filled with servers.
Here in Secaucus, about 11 miles due west of Wall Street, is an Equinix data center known as NY4 where several financial exchanges house their matching engines – powerful servers that match buy and sell orders and provide updated pricing information. It’s the epicenter of a major shift in the financial markets that has seen much of the trading activity migrate from Manhattan to a handful of data centers in northern New Jersey.
A Who’s Who of Financial Trading
“This is one of the main buildings were all that happens,” said Matthew Melis, Sales Engineering Manager for the Northeast for Equinix. “It’s really a big ecosystem of who’s who in the financial ecosystem.”
NY4 was built to be a digital fortress, with five levels of security measures – including keycards, biometrics, security guards, a “mantrap” corridor and combination locks – between the street and the servers. Equinix spent $250 million to equip the building with industrial-grade infrastructure to ensure that the servers housed here never go offline.
Eighteen huge diesel generators, each capable of providing 2.5 megawatts of electricity, supply emergency backup power during utility outages. During Superstorm Sandy, these massive engines kept NY4 online for more than a week as the region struggled with widespread utility downtime.
The 340,000 square foot facility is large enough to house five football fields. More than 57 miles of cabling runs through NY4 to connect servers and power equipment. Billions of packets of data speed back and forth through fiber optic cables in yellow trays, which run overhead between customer cages to connect the 450 customers housed in the data center.
Magnet Customers Attract an Ecosystem
These include Direct Edge and other electronic stock exchanges, which are known as “magnet” tenants because they attract other customers who want ultra-fast access to the matching engines for their high frequency trading operations. The result: a thriving ecosystem of trading firms that reinforces the importance of NY4 as a destination for financial services customers.
NY4 is the busiest of a cluster of data centers in northern New Jersey that drive trading operations that are remaking the financial markets. These include the NYSE Technologies data center in Mahwah, a NASDAQ server farm in Carteret, a Savvis data center in Weehawken, and the Telx campus in Clifton. All of these facilities are tethered together by low-latency fiber lines that allow customers to exchange data in milliseconds – and sometimes microseconds.
It’s a good business for the companies operating these data centers. NY4 generates more than $100 million in annual revenue for Equinix, a colo provider based in San Jose, Calif. The building is a former eyeglass factory that Equinix acquired in 2006, when it was seeking expansion space as the nearby NY2 facility neared capacity.
For a closer look at the infrastructure powering NY4, check out Data Center Knowledge’s photo tour, Inside the Equinix NY4 Financial Trading Hub.