Competitive metro fiber operator abvt today launched a low latency transatlantic product aimed at the financial sectors. They are offering end to end connectivity between Slough, The City and Docklands in London, and various locations in Manhattan plus key facilities in Newark, Weehawken, Secaucus, Carteret, and Clifton. Each of those contains infrastructure key to the low latency trading market.
What’s rather interesting here is that Abovenet of course does not actually operate any transatlantic cables. They are leasing that leg just like almost anyone is – I wonder which one has the latency advantage? But Abovenet’s offering springs not from the transatlantic path itself which others could lease as well. Rather it comes from the metro fiber on each end, and not many providers have as much metro fiber depth in both New York and London as they do. That gives them optimization advantages in the on/off ramps.
That’s how the low latency battles are being fought right now – find a route on which you have an advantage, package it, and sell it before the traders move on to whatever comes next. How long will this low latency binge drive the market? Hmmm, hopefully long enough for the rest of the bandwidth sector to come roaring back.
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Categories: Low Latency · Metro fiber
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Hi Rob. Competing on latency over facilities that are native glass (or next best, derived wavelengths) is one thing. Adding SONET/OTN and multiple stages of hierachically cascading bottlenecks from conventional overland routes and international gateways is another, if the strategy is to suggest that better and more direct optical facilities holds the answer. The point is, the relative signficance of tail section performance may pale in comparison to the amount of latency that is introduced elsewhere in the path, for what it’s worth. All that said, it sure doesn’t hurt ABVT’s cause to own those end section facilities for its NY-LON offerings, since it remains that for hi-freq trading purposes every nanosec helps.
Frank
As the article cited below related to EMC’s universal storage play suggests, the implications of latency are not limited to algorithmic trading alone. A snippet:
When a person in London looks at data resident on a disk drive in Sydney, Australia, it takes seconds for the data to start arriving – the global distance network latency problem. Even at the speed of light data travels only so fast. Then the rest of the data takes time to arrive./snip
Story: Gelsinger stuns analysts and colleagues with storage pool plan – EMC will sync all your data, worldwide / By Chris Mellor / 15th March 2010
http://www.theregister.co.uk/2010/03/15/emc_daad/