Datacentres and trading floors
Peter Billington and Mo Shehata of PTS Consulting tell us about advances in datacentre and trading floor technology and facilities.
What are the main differences in trading floor configuration for financial institutions compared to 10 years ago?
There are many changes in the data centre environment from the telephony systems, the turrets, hoot and holler systems, the PCs (including screens) as well as the trading desks themselves. The supporting infrastructure (hidden away) has also seen drastic changes to keep up to date with the changes for the user experience. From the change to IP telephony to the water-cooled and Co2 cooled desks, there have been some major changes in the trading floor environment.
The physical layout of trading floors has changed little in the last 10 years, however, the underlying network and system architecture has seen dramatic change which has further impacted environmental considerations (power & cooling) and trading desk design.
The convergence of voice and data onto a unified network infrastructure has had a dramatic impact on network design. The increasing interest in moving PC’s away from the trading floor and into the data centre has also resulted in significant change in the way floors are designed from an electrical and mechanical perspective, though large scale adoption of this type of technology has yet to occur.
What are the main trends in this area?
There are constant trends accepted by most of the large trading houses, and that is the need for faster trades. Most other trends are different from one organisation to the other, for example a large number of organisations have gone for more PCs under the desk and tried to find a way of cooling them, whereas some have adopted the ‘blade PCs’ solution where the PCs are within the data centre and there is very little within the trading desk itself. There is no right or wrong answer, there is only the answer that works for the organisation (as long as it is analysed accurately from all aspects of IT through to real estate).
Looking at voice and network architecture, the largest trend has been the move to converged voice and data networks and the move to IP telephony on the trading floor. The trend towards faster trade execution as mentioned above actually results in changes at the datacentre side, not at the trading floor. Investment houses move equipment from their own datacentres to co-locate it at the exchange datacentres to reduce the time taken for data to pass from their trading engines to the market for price discovery and execution.
Have these changes made any difference to productivity of traders? In what way?
The aim of all the changes is to increase productivity and facilitate better working conditions, thus increasing money making potential of the traders and therefore the firm as a whole. Some organisations have adopted the concept of ‘clear line of sight’ as an example to improve communication between the trading teams, some have invested in the user comfort aspects and others in technology changes. Irrespective of which or if all of the approaches are taken, the end result has generally proven to improve productivity. One word of caution to the technology adopters though is to ensure that the business need is driving the improvement not the technology.
How have changes in power requirements impacted other areas of the business?
If planned appropriately, this has no impact on the business, however if not then it can impact growth potential.
What other services, such as air conditioning, cabling requirements, fire, health and safety been improved or changed? Do you see this changing again over the next 10 years and in what direction?
As an electrical engineer myself it pains me to say that the power evolution has been the least significant in this environment, where the limelight has really been focused firmly on cooling and structured cabling. The latter for the changes in speed that it can provide for desk connectivity, now up to 10Gb-long gone are the days of making a cup of tea while your internet explorer is googling! As for the cooling, this has stolen the show purely because it is more tangible than its power counterpart as it has an impact on user comfort. User comfort is always a challenge as each person has their own circadian rhythm and their own comfort zone, add to this complexity the outside influence of PCs (now more powerful, hotter) rejecting heat like a small heater element near the person’s feet. Thus cooling the trading floor has become one of the biggest challenges. This explains the evolution of cooling with new technologies appearing, from underfloor air-conditioning, to water-cooled, CO2 cooled and fan assisted trading desks.
What difference does the size of the company make? Are some companies early adopters?
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The size of the company definitely makes a difference, ask yourself this question: Is it easier to turn a big ship around compared to a small boat? It is the same philosophy here, the biggest challenge is that turning big ships around needs time. Saying that, the bigger ships are always looking for the competitive edge and as such may consider early adoption of different technologies. However usually this will be as a pilot for a small area on a trial basis to avoid large exposure to risk. It is often the smaller houses with smaller infrastructure who are more agile and therefore quicker to adopt and exploit newer technologies. There is always a delicate balancing act between innovation to drive competitive market positions and appetite for risk. The majority of investment houses tend to remain relatively conservative on the trading floor and use the back office and other areas of the business as test beds for new technology implementations prior to rolling them out to the trading floors.
Are larger MNCs setting new standards in these areas and who is leading the changes, FM, IT overall business strategy?
Business strategy is the primary driver here. We have seen the steady realisation by business leaders over the last decade as to the importance of having IT representation at the strategic level. Investment houses were arguably a little quicker than most to realise this and much of the innovation achieved within the trading floor and data centre environments is a result of a committed partnership between IT and the business.
What new products or technological developments have most impacted the approach towards both trading floor and datacentre space?
Again the main changes relate to cooling, do we remove the PCs from the trading desk as it is becoming a difficult challenge to manage, especially with many moves, adds and changes or do we keep them there? The introduction of blade PCs, the clear-cubes and other technology will impact the trading floor and as a result the blade PC load will need a home: the data centre. Fully loaded blade chassis and cabinets will not be cooled adequately with a simple hot/cold aisle cooling arrangement in the data centre. This has introduced the limitation of two out of the four blade chassis being installed in cabinets (what a waste!) or to fully populate the cabinet, localised cooling solutions or aisle capping systems have been adopted. The alternative is to keep the PCs in the trading desk, then we are back looking at the cooling of the trading desks and ensuring we maintain user comfort.
Have the dramatic changes in the economy that has led to large changes in head count caused more impact on trading floor space than new developments on the technical side? Or have these two areas worked in tandem?
They have both worked in tandem (by accident) to shape the trading floor requirements. Looking at it from a business perspective, the main driver is creating efficiency on the trading floor. Whether this is spatial efficiency (a side-effect of the headcount decrease was reduced space to reduce rental costs) or staff efficiency (as discussed earlier, many factors impact this), the end result to the business is the same, more money, which is the ultimate goal for any business.
A couple of years ago people were saying that a trading floor was the new datacentre. Is this still the case?
This was really driven by the perception people had of the trading floor design being as complicated as data centres, in fact it is more complicated in my opinion since I have never had a server come and tell me that it didn’t like the colour of the cabinet it was installed in! The reality is they are both mission critical environments, but each has its own challenge and should not really be compared.
What have developments in trading floor spaces impacted datacentre strategy?
As mentioned above, it depends on what technology you adopt, the data centre will be impacted, but not to the extent of the strategy being changed. The biggest misconception people have is that a datacentre strategy is basically the decision of how many datacentres the company needs, how many cabinets and what is the total power and cooling requirement! If that is your idea of a strategy, then yes your datacentre ‘strategy’ will be impacted by the trading floor technology requirements. There are many facets to a sound datacentre strategy, of which one of the tactical outcomes is the above mentioned points, but the key to the strategy is for it to be dynamic i.e. agile enough to adapt to business and technology changes alike as well as ensure that the business maintains its competitive edge. As you can see, this strategy will have a consideration of the trading floor and other technologies, but it is not the main driver for the strategy.
Have the roles of consultants, in-house teams and business units changed and what can they do to prepare for changes to come?
The roles of consultants have significantly changed as consultants strive to become ‘trusted advisors’ rather than vendors to clients. This change has influenced how consultants deal with clients and vice-versa, where a mutual respect and ideas exchange is not uncommon between the consultant and the client’s in-house team. This may be due to the change in the in-house teams themselves where they have become more aware of the challenges and are aiming to address them. I have seen large investment banks create an engineering department within IT! Some of the most talented M&E engineers are now in IT providing a ‘bridge’ between the engineering (real estate) environment and IT (technology) environment. This aids a better management of data centres and trading environments through effective communication, also allowing for better planning through collaboration.
If I was to put it in one word of how to be better prepared: Teamwork.
Mohammed Shehata — Global Technical Authority, Data Centres, PTS Consulting Peter Billington — Managing Director — PTS Consulting Australia