Wall Street Firms Looking to Vendors for Hosted Services and Greater Integration

The race for low latency and increased risk awareness are just two of the drivers behind the current popularity of hosted services and integration solutions.

Wall Street is abuzz with talk of firms gravitating toward hosted IT services and demanding greater integration from their solutions providers. But while several hosted solutions providers say they see a trend on the Street for their services, at least one industry observer says it's too early to point to hosted solutions as the next IT trend in financial services.

Savvis (booth #2503) — a global provider of IT infrastructure-as-a-service — announced that it is expanding its proximity hosting service with a direct connection to the London Stock Exchange through the Savvis data center in London's Docklands area. The company also said it has sealed a proximity agreement with two major derivatives exchanges in Chicago, including the InterContinental Exchange (ICE), whose servers are based in Savvis' data center there.

Varghese Thomas, VP of financial markets for Savvis, says the popularity of hosting trading servers and applications is being driven by the low-latency race on Wall Street and the desire of financial firms to be as close to the exchange data center as possible. "We're seeing a huge trend in the hosting side," he relates, adding that it allows firms to "focus on their core applications and hand off the other services we can provide, and reduce costs."

John Lehner, president of financial services technology provider Eagle Investment Systems (booth #2111), a subsidiary of The Bank of New York Mellon, confirms the trend on Wall Street toward adopting hosted services. "Clients say as long as they can have full access to an application, they don't need to have it on a computer in their office," Lehner relates.

Lehner points out that most mid-tier and small firms spend a lot of time and effort to maintain applications and are looking for more cost- and time-effective alternatives. "Now the technology allows them to access all the business functionality they need through this remote service, and not have to maintain hardware and software and bypass technology," he says.

Melanie Rodier has worked as a print and broadcast journalist for over 10 years, covering business and finance, general news, and film trade news. Prior to joining Wall Street & Technology in April 2007, Melanie lived in Paris, where she worked for the International Herald ... View Full Bio