The Securities Technology Analysis Center (STAC®), an organization that improves technology discovery and assessment in the finance industry through dialog and research, recently audited the STAC-M3™ benchmark suite on Google Cloud (SUT ID KDB211210). These enterprise tick-analytics benchmarks assess the ability of a solution stack such as database software, servers, and storage, to perform a variety of I/O-intensive and compute-intensive operations on historical market data.

Following up on our previous STAC-M3 benchmark audit (SUT ID KDB181001), a redesigned Google Cloud architecture leveraged the most recent version of kdb+ 4.0, the time-series database from KX, and achieved significant improvements: 35 out of 41 benchmarks ran faster in the new cluster – by up to 18x faster than Google Cloud’s prior results. Key highlights include the following:

Compared to the previous STAC-M3 Antuco suite results on Google Cloud:

• Was faster in 13 of 17 mean response-time benchmarks
• Was 18x faster – a 94% reduction in run time – in the version of Year-High Bid that allows caching (STAC-M3.ß1.1T.YRHIBID-2.TIME), which also set an overall record for all published results
• Had 9x higher throughput in Year-High Bid (STAC-M3.ß1.1T.YRHIBID.MBPS)

Compared to the previous STAC-M3 Kanaga suite results on Google Cloud:

• Was faster in 22 of 24 mean response-time benchmarks
• Was over 10x faster in all four Market Snapshot workloads (STAC-M3.ß1.10T.YR[2,3,4,5]-MKTSNAP.TIME)
• Had 5x the throughput in Year-High Bid involving 2 years of data (STAC-M3.ß1.1T.2YRHIBID.MBPS)

“The STAC-M3 standard was designed by financial firms to reveal the performance of tick analytics stacks. Generational improvements like those exhibited by Google Cloud’s most recent STAC-M3 audit, are important data points for firms evaluating new architectures for performance and scale,” said Peter Nabicht, President of STAC.

These performance results may translate to real-world advantages that may be difficult for investment firms to achieve in static and costly on-premises environments: immediate answers in high data velocity markets, more thoroughly explored research theories by adding data or new quantitative approaches, and reduced costs by releasing cloud resources more quickly.

STAC-M3: High-speed tick analytics

Designing for record-breaking results

In our STAC-M3 audit, the stack under test (SUT) was designed to take advantage of horizontal scalability in the cloud by sharding data across independent compute nodes. The cluster of 12 Google Compute Engine N2 instances was powered by Intel Cascade Lake, with each node using 32 vCPUs, 160GiB of memory, and 9TiB of local NVMe SSDs. The full STAC-M3 Antuco and Kanaga data set was split across the cluster and kdb+ scripts distributed queries between nodes.

This configuration was the sweet spot for this particular workload, but this architecture does not need to be limited to 12 nodes for other workloads – the data sharding algorithm could scale to any number of nodes as required by workload demands. Since scaling out the cluster in this manner increases the total pool of available storage, this architecture can continue scaling out to petabytes of storage across hundreds of nodes.

The ability to spawn large clusters with hundreds of thousands of processors on demand at low cost, and to delete the resources when jobs complete, not only changes the economics of running computations on large financial data sets, it also opens up opportunities to explore solutions to new types of problems that were previously overlooked due to the constraints of fixed hardware on-premises. You can check the pricing of this VM configuration using the Google Cloud Pricing Calculator. The costs can be reduced even further by using preemptible VMs.

While the new cluster used a similar number of nodes, cores, and total memory as the previously-audited cluster, the redesigned architecture allowed us to harness the low latency and high throughput of Local NVMe SSDs.

Resources on demand

The cluster was created on demand using Terraform and Ansible during testing and auditing. The use of infrastructure as code (IaC) techniques ensured that the cluster, fully loaded with the STAC-M3 data set, could be created when needed and then removed when benchmarking was complete. It also meant that the cluster configuration was enforced by code on each deployment, eliminating configuration variance and drift. The full IaC definition to create the cluster can be retrieved from the report in the STAC Vault.

Each time the cluster was created, data was streamed to Local SSDs from Google Cloud Storage, our reliable and secure object storage, at up to the line rate of 32Gbps per node. The entire 57TiB STAC-M3 Antuco and Kanaga data was replicated from Cloud Storage to local storage in approximately 20 minutes.

Since each node was independent and responsible for its own shard of data, doubling the cluster size would cut the synchronization time in half, or copy twice as much data in the same amount of time. Using higher bandwidth options of up to 100Gbps would triple the possible throughput for a relatively small incremental cost, trading an approximately 11%-23% price increase at current list prices for a 200% data synchronization performance increase. Taking advantage of fast networking to cache sharded data in parallel to a large cluster makes storing bulk data in Cloud Storage viable for even the largest workloads.

For quants working on vast data sets in sprawling compute clusters, the ability to fully describe infrastructure as declarative code, create elastic resources on demand, cache data quickly from cheap bulk storage, and turn resources off when computations complete is a dramatic change compared to waiting months to grow on-premises clusters – and a compelling reason to use cloud infrastructure.

To see how we designed and optimized the cluster for API-driven cloud resources, read our new whitepaper.

STAC-A2™: Calculating derivatives risk

In 2018, we showed that cloud instances can outperform bare metal when analyzing large tick history data sets in the demanding suite of STAC-M3 benchmarks. Last year, Google Cloud’s partner Appsbroker showed that the same was true for calculating derivatives risk in STAC-A2 on Google Cloud. You can read about how Appsbroker built its record-breaking STAC-A2 compute cluster on Google Cloud in its blog post, or access the STAC Report directly. Here are the highlights:

Compared to all other publicly reported solutions, this solution, based on a cluster of 10 virtual machines, had:

• The highest throughput (STAC-A2.β2.HPORTFOLIO.SPEED)
• The fastest cold time in the large problem size (STAC-A2.β2.GREEKS.10-100k-1260.TIME.COLD)

Compared to a solution involving an 8-node, on-premises cluster (SUT ID INTC181012), this 10-node, cloud-based solution:

• Had 5 times the maximum paths (STAC-A2.β2.GREEKS.MAX_PATHS)
• Had 10% greater throughput (STAC-A2.β2.HPORTFOLIO.SPEED)
• Was 18% faster in cold runs of the large problem size (STAC-A2.β2.GREEKS.10-100k-1260.TIME)
• Was 9% faster in cold runs of the baseline problem size (STAC-A2.β2.GREEKS.TIME.COLD)

Finding market advantages with Google Cloud

Across the investment management industry, every firm is seeking many of the same competitive advantages. However, finding unique opportunities and managing larger and larger data sets is becoming a major strain. Cloud is fundamentally changing how quants tackle the problem while empowering them to manage risk and generate higher returns.

Building on-premises computing clusters with tens or hundreds of thousands of cores and petabytes of storage requires huge up-front investments and lead time measured in months or years. Google Cloud makes the same scale available to its customers, provisioned on demand and paid per use. More importantly, the elasticity of cloud resources enables agility that is simply not available in a fixed data center cluster – the agility to explore, experiment, iterate, and respond to markets faster than before.

Scaling out to tens of thousands of cores in minutes and then removing the resources immediately not only changes the speed at which questions can be answered; it encourages different and more frequent questions, asked simultaneously on many independent clusters, free from the constraints of fixed on-premises hardware.

It is this flexibility and power that enables financial services firms to leverage larger data sets and get results, backtest, research, and analyze large amounts of data, faster and whenever they need it.

Download our whitepaper to learn more about our latest STAC-M3 tick history analytics benchmark results and how to optimize cloud infrastructure for high-speed market data analysis.

While some traditional financial services companies have more slowly transitioned to the cloud, capital markets firms have embraced cloud computing across their entire value chains — front-, middle-, and back-office. We wanted to understand the dynamics behind this rapid adoption, the most common use cases, and the types of technology most in use, particularly as it relates to market data. Google Cloud commissioned Coalition Greenwich to survey 102 institutional capital markets professionals — at exchanges, trading systems, data aggregators, data producers, asset managers, hedge funds, and investment banks — in the United States, Canada, France, Germany, Italy, the Netherlands, Switzerland, and the United Kingdom. 

Our research found that while there are many drivers, demand for easier accessibility is fueling widespread adoption of cloud-based market data services, and associated trading infrastructures, across the buy side and sell side. In fact, 68% of sell-side and buy-side users find it critical for market data providers to offer public cloud-based data services. At the same time, exchanges, market data providers, aggregators, and trading systems are embracing the cloud as a delivery model by offering access to data directly via their own cloud services, APIs or partners.

Here were five noteworthy takeaways from the study: 

1. Cloud services are becoming ubiquitous for data delivery. Today, the cloud is pervasive, with 93% of exchanges, trading systems and data providers offering cloud-based data and services, according to surveyed executives. Moreover, 100% of those surveyed intend to offer new cloud-based services, such as derived data, in the next 12 months.

2. Commercial and investment banks are offering additional connectivity, real-time data feeds, and trading applications delivered via the cloud,demonstrating that it’s not only exchanges, trading systems, and data providers that are moving rapidly to the cloud. Internal use cases abound as well, with 67% of those surveyed consuming cloud-deployed market data, primarily for data analytics. 88% of surveyed sell-side firms intend to consume cloud-based market data services, with digital transformation, data science and quant research as the top use cases.

3. Buy side firms will consume even more cloud-deployed data. Today, 90% of surveyed buy-side firms are consuming cloud-deployed market data, mostly for portfolio management. 70% of buy-side firms intend to consume more public cloud-based market data services in the next 12 months, adding services such as compliance and regulatory reporting.

4. AI/ML, powered by cloud, is moving out of the pilot phase and into mainstream use. Today, 50% of exchanges, trading systems, and data providers are offering data products or services powered by AI/ML, and of those, 42% intend to offer AI-powered trade execution and trading analytics services in the next 12 months. Within commercial and investment banks, 55% said they are currently using AI/ML in the cloud, and while that was true for only 14% of overall buy-side respondents, 44% of large buy-side respondents are using it.

5. Exchanges, trading systems, and data providers are prioritizing public cloud for internal insights. 71% of these firms are using the public cloud, mostly for data transmission, processing, analysis, and long-term data storage. Over the next 12 months, 33% of new public cloud workloads will focus on data mining, data insights and advanced analytics, while 28% of new AI/ML tooling and infrastructure investments will focus on faster analytics and risk reviews, and 27% on data quality maintenance.

“We see new, dramatic shifts on the adoption of cloud across market data,” said David Easthope, Senior Analyst for Coalition Greenwich. “And we expect further proliferation of cloud-based services and greater consumption across the trading and investing lifecycle.”

Conclusions and future predictions

Based on the survey results, Coalition Greenwich predicts five following trends over the next 12 months:

1. Exchanges and trading systems will continue to launch a wide array of new cloud-based and possibly cloud exclusive data services across derived data, end of day data, reference data and pricing data.
2. Data providers will launch new data products such as pre-trade analytics powered by AI/ML in the cloud.
3. Commercial and investment banks will offer additional connectivity, real-time data feeds, and trading applications delivered via the cloud.
4. Buy-side firms will consume even more cloud-deployed data, including real-time market data, portfolio management data, and risk analytics.
5. Exchanges, trading systems and data providers will explore proof-of-concepts around core systems on the cloud. Improvements to AI/ML tooling or infrastructure will ramp up as firms seek more rapid responses to risk initiatives.

To learn more about these findings, download our two full reports, The Future of market data: Distribution and consumption through cloud and AI and Exchanges and data providers: Prioritizing the cloud and AI for internal insights or our short infographic.

Research methodology

The survey was conducted online by Coalition Greenwich on behalf of Google Cloud from March 2021 to April 2021 among 102 executives in North America (n=82), EMEA (n=17) and other (n=3) who are employed full-time and who are participants or influencers in decisions around cloud and/or senior management with a role at a company which is an institutional asset manager, hedge fund, alternative investment manager, exchange and/or trading system, information provider, information aggregator, or other asset manager/asset owner. The survey included wide perspectives from a range of firm size and asset class focus, including equity, fixed income, FX, commodities, multi-asset, and other asset classes.

Foot Notes

1.  We defined market data as direct feeds, consolidated feeds, terminal and desktop products, security and reference data, pricing data, historical data, alternative data, and index data.

The combination of a vital need for IT experts among businesses and a digital skills gap is making lifelong learning increasingly critical. Beyond professional development, learning new skills offers additional rewards from building peer connections to boosting your creativity. That’s why in 2020 Krishna Deepak Nallamilli and I launched KIMO.ai to reimagine how people approach learning, especially in developing markets. Our team is building the artificial intelligence needed to generate individual learning paths through a wide range of quality digital learning content.

Google Cloud and its Startup Program have been instrumental in connecting our team with the tools, people, processes, and best practices to grow our business. 

Existing learning platforms lack engagement

Outside of traditional education settings, massive open online learning courses (MOOCs)—often modeled after university courses—can provide a flexible and affordable way to upskill or reskill. But the vast majority of people who participate in MOOC programs fail to complete courses. Based on our research, the challenge with existing learning platforms is a lack of engagement, primarily caused by limited direction on which skills to learn, whether AI, fintech, blockchain, or other in-demand disciplines.   

We’ve also received feedback that many corporate learning management systems–developed as online training systems to upskill employees–tend to be poorly designed and time-consuming to use. 

Overall, a significant challenge with most existing learning platforms is that they’re generic. For example, suppose you’re interested in learning about AI. In that case, you need AI-related coursework that applies to your industry and the job you want because AI in medicine is vastly different from AI in financial services. Today’s online learning options typically take a one-size-fits-all approach and fail to capture the nuances of what learners really need to get ahead. 

Building a future-proof learning platform 

The commitment to highly personalized, accessible learning inspired KIMO.ai, a platform that we believe is the future of education. Depending on your goals, current skills, location, and other factors, our AI-based platform will identify which coursework (and where to find those classes) to build the skills you need. The more personalized, relevant learning recommendations even take into account people’s preferences for podcasts, MOOCs, books, articles, videos, courses, publications, and more.  

In a mix of cooperation and competition we call “coopetition,” KIMO.ai will regularly recommend courses from other established online learning systems if, based on our automated assessment, it’s the best option for a learner. There’s also the option to access free content only. 

Google cultural alignment fosters trust

Our platform started with one developer exploring NLP models and Google APIs. As we’ve grown our team and launched our beta to 110,000 users in developing markets, we discovered there is a lot of interest in our platform, and we believe we can make a significant impact. In feedback forums, we also learned that we need to focus our efforts on the mobile experience to improve engagement since 99% of the beta testers use mobile devices. 

Beyond our team’s high level of trust in Google Cloud solutions, our team also appreciates the cultural alignment with Google. We value Google’s developer-centric approach and rely on tools like Dataflow for batch data processing and Cloud TPU to reliably run machine learning models with AI services on Google Cloud. We also build all of our deployments on Google Kubernetes Engine (GKE), which makes it easy to manage all our containerized workloads 

On the front end, Google App Engine makes it easy to deploy apps and experiment, and it integrates seamlessly with Firebase for authentication and more. BigQuery is our serverless data warehouse that efficiently scales to support the millions of articles, videos, and other learning resources we need to analyze to provide the targeted coursework recommendations our learners require.

As we grow our business having a network of trusted advisors is also extremely valuable. By working closely with DoIT International, the 2020 Google Cloud Global Reseller Partner of the Year, our team has access to their cloud, Kubernetes, and machine learning expertise. DoIT has already helped us quickly resolve IT issues and create analytics dashboards that give us insights to continually enhance our services. 

Building for a growing industry

The dynamic edtech market is growing rapidly and estimated to become an $11B industry by 2025. We’re proud to be part of the next wave of personalized education that has the potential to empower people in developing markets and beyond to grow their skills with coursework tailored to their exact needs and how they like to learn. This year, we will deliver our platform to at least 400,000 more people. We’re excited to see how they use it and where it takes them. 

If you want to learn more about how Google Cloud can help your startup, visit our Startup Program application page here to get more information about our program, and sign up for our communications to get a look at our community activities, digital events, special offers, and more.

While the promise of artificial intelligence transforming the manufacturing industry is not new, long-ongoing experimentation hasn’t yet led to widespread business benefits. Manufacturers remain in “pilot purgatory,” as Gartner reports that only 21% of companies in the industry have active AI initiatives in production. 

However, new research from Google Cloud reveals that the COVID-19 pandemic may have spurred a significant increase in the use of AI and other digital enablers among manufacturers. According to our data—which polled more than 1,000 senior manufacturing executives across seven countries—76% have turned to digital enablers and disruptive technologies due to the pandemic such as data and analytics, cloud, and artificial intelligence (AI). And 66% of manufacturers who use AI in their day-to-day operations report that their reliance on AI is increasing.

The top three sub-sectors deploying AI to assist in day-to-day operations are automotive/OEMs (76%), automotive suppliers (68%), and heavy machinery (67%).

In fact, Bryan Goodman, Director of Artificial Intelligence and Cloud, Ford Global Data & Insight and Analytics shares, “Our new relationship with Google will supercharge our efforts to democratize AI across our business, from the plant floor to vehicles to dealerships. We used to count the number of AI and machine learning projects at Ford. Now it’s so commonplace that it’s like asking how many people are using math. This includes an AI ecosystem that is fueled by data, and that powers a ‘digital network flywheel.’”

Moving from edge cases to mainstream business needs

Why are manufacturers now turning to AI in increasing numbers? Our research shows that companies who currently use AI in day-to-day operations are looking for assistance with business continuity (38%), helping make employees more efficient (38%), and to be helpful for employees overall (34%). It’s clear that AI/ML technology can augment manufacturing employees’ efforts, whether by providing prescriptive analytics like real-time guidance and training, flagging safety hazards, or detecting potential defects on the assembly line.

In terms of specific AI use cases called out by the research, two main areas emerged: quality control and supply chain optimization. In the quality control category, 39% of surveyed manufacturers who use AI in their day-to-day operations use it for quality inspection and 35% for product and/or production line quality checks. At Google Cloud, we often speak with manufacturers about AI for visual inspection of finished products. Using AI vision, production line workers can spend less time on repetitive product inspections and can instead focus on more complex tasks, such as root cause analysis. 

In the supply chain optimization category, manufacturers said they tapped AI for supply chain management (36%), risk management (36%), and inventory management (34%).

In our day-to-day work, we’re seeing many manufacturers rethink their supply chains and operating models to better accommodate for the increased volatility that has been brought about by the pandemic and support the secular trend of consumers asking for increasingly individualized products. We’ll share more on deglobalization in the third installment of our manufacturing insights series.

AI use differs by geography, but not for the reasons you may think

The extent to which AI is already being used today varies quite strongly between geographies, according to our research. While 80% and 79% of manufacturers in Italy and Germany respectively report using AI in day-to-day operations, that percentage plummets in the United States (64%), Japan (50%) and Korea (39%).

It’s tempting to state this disparity is due to an “AI talent gap.” Although the most common barrier, just a quarter (23%) of manufacturers surveyed believe they don’t have the talent to properly leverage AI. Cost, too, does not appear to be a roadblock (21% of those surveyed). Rather, from our observations, the missing link appears to be having the right technology platform and tools to manage a production-grade AI pipeline. This is obviously the focus of our efforts and others in the space, as we believe the cloud can truly help the industry make a step change.

Looking ahead: The Golden Age of AI for manufacturing

The key to widespread adoption of AI lies in its ease of deployment and use. As AI becomes more pervasive in solving real-world problems for manufacturers, we see the industry moving away from “pilot purgatory” to the “golden age of AI.” The manufacturing industry is no stranger to innovation, from the days of mass production, to lean manufacturing, six sigma and, more recently, enterprise resource planning. AI promises to bring even more innovation to the forefront. 

To learn more about these findings and more, download our infographic here and our full report here. 

^{Research methodology
The survey was conducted online by The Harris Poll on behalf of Google Cloud, from October 15 – November 4, 2020, among 1,154 senior manufacturing executives in France (n=150), Germany (n=200), Italy (n=154), Japan (n=150), South Korea (n=150), the UK (n=150), and the U.S. (n=200) who are employed full-time at a company with more than 500 employees, and who work in the manufacturing industry with a title of director level or higher. The data in each country were weighted by number of employees to bring them into line with actual company size proportions in the population. A global post-weight was applied to ensure equal weight of each country in the global total.}