Cable & Wireless Targets High-Performance Crowd with Network Upgrade

Cable & Wireless Worldwide has responded to market demand for high-speed exchange connectivity with a new configuration of its International Ethernet Private Line (IEPL) network. The company reckons the newly configured network will meet the needs of high-performance traders by delivering high speed – up to 1Gb per second – as well as predictable and secure ethernet connections.

C&W Worldwide says it has already signed up its first customer for the next-generation trading network. A “UK-based global investment bank”, which C&W Worldwide declines to name, granted the contract after a competitive bidding process for a solution that would allow the bank to extend the reach of its cash equities, prime brokerage and futures trading algorithmic network to nine exchanges globally.

To win the deal, C&W Worldwide says it demonstrated the most predictable transaction and lowest round-trip delays between all nine exchanges. The network supplier says it expects a further dozen or so signings for the network service over the next year.

Essentially, the new capability is a version of IEPL that sits on top of C&W Worldwide’s core optical switch network. As well as high speed, the company promises high performance, claiming that competitors, such as Verizon, BT and Alcatel-Lucent, all have a subtle differences in their infrastructure approach, but that none can match its speed, performance guarantees and enterprise focus.

“Our assets are very attractive to investment banks and we are a logical network choice,” says David Stanton, vice president for C&W Worldwide enterprise sales in Asia. “We have an industry leading infrastructure that is faster than our competitors’ and we can guarantee end-to-end performance. Many service providers shy away from guarantees.”

Rather than a rip-and-replace operation, the building of dedicated cash equities and prime brokerage networks is net incremental, moving these specialist areas away from the core network backbone that can suffer from variable end-to-end performance and a lack of detailed visibility and reporting capabilities.

“Speed is important,” says Stanton, “but so too is network packet loss. The network must run clean, it must deliver clean data and there must be end-to-end visibility and reporting. Of course, there is a price difference between a corporate wide area network and a next-generation cash equities network. But investment banks are willing to pay whatever it takes for speed and end-to-end performance. They recognise what a millisecond means in terms of market opportunity and we can prove the business case in days.”

Nick Lambert, managing director of global markets at C&W Worldwide, adds: “We estimate that the critical role of network path optimisation between a minute and a millisecond could mean a £2 million profit or loss for a financial institution. C&W Worldwide’s IEPL solution takes chance out of the equation and enables customers to get optimal returns from investments in setting up leading-edge algorithmic trading platforms.”

C&W Worldwide expects an increasing number of investment firms to build their own exchange connectivity networks using its new infrastructure, which can be configured to meet the specific needs of individual clients. Firms are also expected to sell these network services to hedge funds and other sponsored participants seeking to trade on markets where they do not have a licence.

“This is a hot market,” says Stanton. “Investment banks want to be fast to market. They want to be confident that they are on the fastest route and they will cease trading if they are not. If they can trade ahead of competitors they can gain advantage. End-to-end speed just a millisecond faster than the speed of other network services translates into money.”