Amazon pilot lifts stock exchanges into cloud

Cloud-based exchanges save money and reduce potential for outages

LONDON:

A pilot by online giant Amazon and two stock exchanges showed how moving share trading from costly physical servers to cloud computing could save money and reduce the potential for outages, the companies said.

The Singapore Exchange (SGX), London-based Aquis Exchange and Amazon Web Services said they undertook a proof of concept to show that trading shares in the cloud can be sufficiently fast and reliable.

“It’s proven to be technically capable,” said Adrian Ip, a Director at Aquis Exchange’s technology arm. Exchanges using the cloud to date for trading are limited in size or niche, such as dealing in crypto assets, Ip said.

Amazon’s move into “multicast” or an ability to send data to many parties at the same time in the cloud, a key requirement for any exchange of size, was a breakthrough, Ip said.

Despite exchanges spending millions of dollars on physical back-up servers, there have been outages this year in Japan, Australia, and at Euronext in Europe, drawing close scrutiny from regulators.

A cloud-based exchange could be more resilient than relying on physical infrastructure dotted across regions, Ip said. Mayumi Hiramatsu, Vice President at Amazon Web Services, said the pilot showed a path to free up customers from maintaining legacy on-premises infrastructure.

Aquis and SGX are looking at how to take forward findings from their pilot with Amazon, which they say could bring savings of up to 90%. “We will be looking at how this can be scaled globally. We will take a considered and measured approach and discuss with regulators and members,” Ip said.

It comes at a time when regulators globally are also taking a harder look at how financial firms are increasingly relying on third-party cloud providers like Amazon, Google and Microsoft for critical services.

The European Union aims to be the first to introduce new laws to regulate such use of the cloud. Separately, Amazon.com Inc said on Thursday last week it had laid off dozens of staff working on the e-commerce giant’s delivery drone project as part of a reorganisation of the team.

The US retailer has been working on a plan to deliver goods to millions of its customers by using a fleet of unmanned drones, and had received federal approval in August to begin testing commercial deliveries in the country.

“We are reorganising one small team within our larger Prime Air organisation to allow us to best align with the needs of our customers and the business,” Amazon spokeswoman Kristen Kish said in a statement, without providing a number on how many employees will be sacked.

Kish said the company was working to find roles for the affected employees “in the areas where we are hiring”.

The company had laid off R&D and manufacturing staff from Amazon Prime Air project and had reached tentative deals with two external manufacturers – Austria’s FACC Aerospace and Spain’s Aernnova Aerospace – to build components for its long-awaited drone, the Financial Times reported.

The full terms of the agreements with the manufacturers were still being finalised, the FT report said, citing a person familiar with Amazon’s plans.

 

Published in The Express Tribune, November 23^rd, 2020.

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