Alphabet Inc.’s Google is teaming up with CME Group Inc. to create a new cloud computing network for the stock trader’s futures and options trading. The two companies will build cloud and colocation facilities next to CME’s existing data center in Aurora, Illinois, with construction set to start later this year. This partnership is part of a 10-year agreement between Google and CME to transition data, clearing services, and trading to the cloud. CME CEO Terry Duffy described this as an important step forward in their collaboration.
The decision to keep the data center in the Chicago area was influenced by market makers and high-speed trading firms who were against relocating it elsewhere. This highlights the significance of the region in the stock market, as it provides advantages to operators by having infrastructure nearby or in the data center for faster information transfer. Talks of moving the data center to Google’s facilities in Virginia and Ohio were entertained but ultimately Aurora was chosen to minimize disruption for customers.
By migrating operations to the new cloud facilities, clients will gain access to Google cloud services such as artificial intelligence and data analytics tools. The matching engine will also transition to the cloud, allowing for more efficient trading. CME clients will be able to test cloud-based trading at Google Cloud’s Dallas facility, which will serve as a disaster recovery center in the future.
Exchanges have been exploring cloud-based platforms as a cost-saving measure, but the technological challenges have slowed down the transition. Nasdaq Inc. has partnered with Amazon.com Inc. to move its North American markets to the cloud, starting with options exchanges. Meanwhile, Cboe Global Markets Inc. has launched a cloud-based market data streaming service and teamed up with Snowflake Inc. to enhance internal data and analytics capabilities.
Overall, the collaboration between Google and CME Group signifies a significant shift towards cloud-based trading in the stock market, with benefits such as increased efficiency and access to advanced technologies for market participants. The transition will be gradual to ensure a smooth process for clients, with a focus on providing cutting-edge services tailored to the needs of the industry.
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https://finance.yahoo.com/news/google-cme-build-facility-move-110000936.html