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Research Reports

Trading and Investment Companies will Increase Consumption of Cloud Services: Study Confirms

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Google Cloud commissioned survey by Coalition Greenwich on capital markets found 5 noteworthy insights on drivers for cloud adoption - common use cases and type of tech used. Read further for an overview of cloud adoption trends across market data.

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 deliveryToday, 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.

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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.

market data trends 6

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.

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4. AI/ML, powered by cloud, is moving out of the pilot phase and into mainstream useToday, 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.

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5. Exchanges, trading systems, and data providers are prioritizing public cloud for internal insights71% 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.

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“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.

Blog

The Journey ahead for Google Cloud and SAP

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Many customers choose Google Cloud for SAP implementation owing to its superior data and analytics services. To help customers with freedom, flexibility and ROI in cloud investments, the duo announced expanded partnership. Learn now!

The partnership between Google Cloud and SAP is entering a new chapter. Over the years, our close partnership with SAP and our mutual dedication to customers has inspired us to do some of our most unique and innovative work—such as building Fast Restart and Memory Poisoning Recovery capabilities for S/4HANA workloads, offering real-time access to our advanced machine learning (ML) capabilities, and developing integrations with the industry’s best cloud security and network infrastructure.

With an expanded, strategic partnership, we are capitalizing on one of the cloud’s most valuable benefits: enabling customer choice without driving up cost or complexity. Customers have shared that they appreciate what Google Cloud has done over the years to support their ability to choose—from our support for multi-cloud environments to our track record with open-source technologies like Kubernetes, to name a couple of examples. 

“We chose Google Cloud to support our SAP implementation. Our decision had a lot to do with the relationship between Google Cloud and SAP and also for the applications and services that are offered by Google Cloud, like BigQuery, which are helping to enable data and analytics within our organization.”— Sam Moses, Vice President of Corporate Systems, The Home Depot

Now, we’re placing this same emphasis on customer choice, flexibility, and freedom to help SAP customers get greater ROI from their cloud investments in three ways:

  • Execute seamless business transformations that deliver all of the benefits of modern, cloud-native applications and services—quickly, economically, and without disrupting day-to-day operations
  • Migrate critical business systems to the cloud, in order to lock in OpEx savings and refocus their IT teams on strategic business technology initiatives
  • Augment existing business systems with cloud capabilities in AI, ML, and analytics

The cornerstone of our expanded partnership is the RISE with SAP program—a comprehensive set of tools, technology, and expert support for a fast, predictable, cost-effective path to business transformation with SAP in the cloud. RISE is also designed to meet every SAP customer on their own terms, whether they’re undertaking an enterprise-wide cloud migration or pursuing an incremental or hybrid-cloud approach. 

To support customers taking advantage of RISE with SAP, Google Cloud will work even more closely with SAP to accelerate customers’ cloud migrations and business process modernization across several key areas. This includes ensuring global availability of multiple SAP services and products—such as SAP Business Technology Platform and SAP HANA Cloud—on Google Cloud’s reliable, scalable infrastructure and high-speed network. Google Cloud is also committed to bringing SAP’s solution for RPA in manufacturing to the Google Cloud Marketplace to support business process modernization. 

Additionally, integrating our AI, ML, and analytics capabilities with key SAP solutions will help companies augment their business systems with sophisticated capabilities and technologies so they can draw more value out of the data stored with them.

“We can deliver our 160 key business insights two or three orders of magnitude faster with BigQuery. When you think about our marketing campaigns and month-end finance processes, we’re talking about jobs that used to take five to eight hours to complete that are now running in seconds.”— Dan Semmens, Head of Data and AI, ATB Financial

Join us on the journey ahead

There’s so much more to come from SAP and Google Cloud. Learn more about our commitment to enabling digital transformation and hear more from customers about their SAP on Google Cloud deployments.

Case Study

How 20th Century Fox Uses Machine Learning to Gauge the Financial Performance of a Movie

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Success in the movie industry relies on a studio’s ability to attract moviegoers—but that’s sometimes easier said than done.

Moviegoers are a diverse group, with a wide variety of interests and preferences. Historically, movie studios have relied heavily on experience when deciding to invest in a particular script—but this can lead to huge risks, particularly when investing in new, original stories.

The iterative and complex process of matching stories and audiences is something that Julie Rieger, President, Chief Data Strategist and Head of Media, and Miguel Campo-Rembado, SVP of Data Science, together with their team of data scientists at 20th Century Fox, decided to clarify with data.

Together, Google Cloud and 20th Century Fox have built privacy-robust data partnerships to better understand moviegoers, and have developed in-house deep learning models that train on granular customer data and movie scripts to identify the basic patterns in audiences’ preferences for different types of films.

In 18 months, these models have become routine considerations for important business decisions, and provide one of their most objective, data-driven, and effective barometers to evaluate the tone of a movie, its affinity with core and stretch audiences, and its potential financial performance.

Find how machine learning helped achieve this (clue: it used movie trailers). Download the case study.

How-to

Developers and Practitioners’ Guide for Moving On-prem Data Warehouse to BigQuery

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Google Cloud's BigQuery is a serverless, scalable and cost-effective solution for handling EDW use cases. Read to ease your migration journey of on-prem EDW to BigQuery along with examples and considerations for a successful data migration strategy!

Data teams across companies have continuous challenges of consolidating data, processing it and making it useful. They deal with challenges such as a mixture of multiple ETL jobs, long ETL windows capacity-bound on-premise data warehouses and ever-increasing demands from users. They also need to make sure that the downstream requirements of ML, reporting and analytics are met with the data processing. And, they need to plan for the future – how will more data be handled and how new downstream teams will be supported?

Checkout how Independence Health Group is addressing their enterprise data warehouse (EDW) migration in the video above.

Why BigQuery?

On-premises data warehouses become difficult to scale so most companies’ biggest goal is to create a forward looking system to store data that is secure, scalable and cost effective. GCP’s BigQuery is serverless, highly scalable, and cost-effective and is a great technical fit for the EDW use-case. It’s a multicloud data warehouse designed for business agility. But, migrating a large, highly-integrated data warehouse from on-premise to BigQuery is not a flip-a-switch kinda migration. You need to make sure your downstream systems dont break due to inconsistent results in migrating datasets, both during and after the migration. So..you have to plan your migration. 

Data warehouse migration strategy

 The following steps are typical for a successful migration: 

  • Assessment and planning: Find the scope in advance to plan the migration of the legacy data warehouse 
    • Identify data groupings, application access patterns and capacities
    • Use tools and utilities to identify unknown complexities and dependencies 
    • Identify required application conversions and testing
    • Determine initial processing and storage capacity for budget forecasting and capacity planning 
    • Consider growth and changes anticipated during the migration period 
    • Develop a future state strategy and vision to guide design
  • Migration: Establish GCP foundation and begin migration
    • As the cloud foundation is being set up, consider running focused POCs to validate data migration processes and timelines
    • Look for automated utilities to help with any required code migration
    • Plan to maintain data synchronization between legacy and target EDW during the duration of the migration. This becomes a critical business process to keep the project on schedule.
    • Plan to integrate some enterprise tooling to help existing teams span both environments
    • Consider current data access patterns among EDW user communities and how they will map to similar controls available in Big Query. 
    • Key scope includes code integration and data model conversions
    • Expect to refine capacity forecasts and refine allocation design. In Big Query there are many options to balance cost and performance to maximize business value. For example, you can use either on-demand or flat-rate slot pricing or a combination of both. 
  • Validation and testing
    •  Look for tools to allow automated, intelligent data validation 
    • Scope must include both schema and data validation
    • Ideally solutions will allow continuous validation from source to target system during migration
    • Testing complexity and duration will be driven by number and complexity of applications consuming data from the EDW and rate of change of those applications 

A key to successful migration is finding Google Cloud partners with experience migrating EDW workloads. For example, our Google Cloud partner Datametica offers services and specialized Migration Accelerators for each of these migration stages to make it more efficient to plan and execute migrations.

Data Warehouse Migration Strategy
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Data warehouse migration: Things to consider

  • Financial benefits of open source: Target moving to ‘Open Source’ where none of the services have license fees. For example BigQuery uses Standard SQL; Cloud Composer is managed Apache Airflow, Dataflow is based on Apache Beam. Taking these as managed services provides the financial benefits of open source, but avoids the burden of maintaining open source platforms internally. 
  • Serverless: Move to “serverless” big data services. The majority of the services used in a recommended GCP data architecture scale on demand allowing more cost effective alignment with needs. Using fully managed services lets you focus engineering time on business roadmap priorities, not building and maintaining infrastructure. 
  • Efficiencies of a Unified platform: Any data warehouse migration involves integration with services that surround the EDW for data ingest and pre-processing and advanced analytics on the data stored in the EDW to maximize business value. A cloud provider like GCP offers a full breadth of integrated and managed ‘big data’ services with built-in machine learning. This can yield significantly reduced long-term TCO by increasing both operational and cost efficiency when compared to EDW-specific point solutions. 
  • Establishing a solid cloud foundation: From the beginning, take the time to design a secure foundation that will serve the business and technical needs for workloads to follow. Key features include: Scalable Resource Hierarchy, Multi-layer security, multi-tiered network and data center strategy and automation using Infrastructure-as-Code. Also allow time to integrate cloud-based services into existing enterprise systems such as CI/CD pipelines, monitoring, alerting, logging, process scheduling, and service request management. 
  • Unlimited expansion capacity: Moving to cloud sounds like a major step, but really look at this as adding more data centers accessible to your teams. Of course, these data centers offer many new services that are very difficult to develop in-house and provide nearly unlimited expansion capacity with minimal up-front financial commitment. . 
  • Patience and interim platforms: Migrating an EDW is typically a long running project. Be ready to design and operate interim platforms for data synchronization, validation and application testing. Consider the impact on up-stream and down-stream systems. It might make sense to migrate and modernize these systems concurrent with the EDW migration since they are probably data sources and sinks and may be facing similar growth challenges. Also be ready to accommodate new business requirements that develop during the migration. Take advantage of the long duration to have existing your operational teams learn new services from the partner leading the deployment so your teams are ready to take over post-migration. 
  • Experienced partner: An EDW migration can be a major undertaking with challenges and risks during migration, but offers tremendous opportunities to reduce costs, simplify operations and offer dramatically improved capacities to internal and external EDW users. Selecting the right partner reduces the technical and financial risks, and allows you to plan for and possibly start leveraging these long-term benefits early in the migration process.
Data Warehouse Migration Architecture
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Example Data Warehouse Migration Architecture

  • Setup foundational elements. In GCP these include, IAM for authorization and access, cloud resource hierarchybilling, networking, code pipelines, Infrastructure as Code using Cloud Build with Terraform ( GCP Foundation Toolkit), Cloud DNS and a dedicated/partner Interconnect to connect to the current data centers.
  • Activate monitoring and security scanning services before real user data is loaded using Cloud Operations for monitoring and logging and Security Command Center for security monitoring. 
  • Extract files from on-premise legacy EDW and move to Cloud Storage and establish on-going synchronization using Big Query Transfer services
  • From Cloud Storage, process the data in Dataflow and Load/Export data to BigQuery. 
  • Validate the export using Datametica’s validation utilities running in a GKE cluster and Cloud SQL for auditing and historical data synchronization as needed. Application teams test against the validated data sets throughout the migration process. 
  • Orchestrate the entire pipeline using Cloud Composer, integrated with on-prem scheduling services as needed to leverage established processes and keep legacy and new systems in sync. 
  • Maintain close coordination with teams/services ingesting new data into the EDW and down-streams analytics teams relying on the EDW data for on-going advanced analytics. 
  • Establish fine-grained access controls to data sets and start making the data in Big Query available to existing reporting, visualization and application consumption tools using BigQuery data connectors for ‘down-stream’ user access and testing. 
  • Incrementally increase Big Query flat-rate processing capacity to provide the most cost-effective utilization of resources during migration. 

To learn more about migrating from on-premises Enterprise Data Warehouses (EDW) to Bigquery and GCP here.

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Guide to Google’s Underwater Infrastructure

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Google's data centers, cloud regions and now, underwater cables with 100+ network edge locations and 7,500+ edge caching nodes build global connectivity. Read how the subsea cable network boosts users' access to Google cloud solutions.

From data centers and cloud regions to subsea cables, Google is committed to connecting the world. Our investments in infrastructure aim to further improve our network—one of the world’s largest—which helps improve global connectivity, supporting  users and Google Cloud customers. Our subsea cables play a starring role in this work, linking up cloud infrastructure that includes more than 100 network edge locations and over 7,500 edge caching nodes

As it turns out, readers of this blog seem to find what happens under the sea just as fascinating as what’s going on in the cloud. Posts on our cables are consistently among our most popular, which is why we brought them together for you here so you can take a deeper dive (pun intended).

Here’s a list our most popular posts on our underwater infrastructure:

2021

2020

2019

2018

2017

2016

Our cable systems provide the speed, capacity and reliability Google is known for worldwide, and at Google Cloud, our customers can make use of the same network infrastructure that powers Google’s own services. To learn more, you can view our network on a map, or read more about our network.

Whitepaper

Execute Data Center Transformation with Google Cloud

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Enterprises developing digital leadership are increasingly moving out of their data centers to focus on core business innovation, and save on complex infrastructure costs. This puts challenges related to demand peaks and business continuity under a magnifying glass.

Many CIOs are under pressure to complete migrations quickly — 68% of CIOs are seeking to migrate existing applications to the cloud, according to Forrester. Motivations range from cost or risk reductions, to refocusing on agility and speed.

As they assess their options, many enterprises face an enormous challenge of balancing the function of their existing infrastructure with a new operating model in the cloud. This involves thousands of variables, different technologies, different processes and skills, disparate teams, and competing interests.

Download this guide and see hoo to craft a strategy out of the data center and into public cloud. It surfaces typical industry patterns, key dimensions to be taken into account while designing the journey, as well as Google’s capabilities and approach to executing a successful modernization, to help you drive lower costs and increased agility.

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New Google Cloud regions are coming to Asia Pacific

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30 Guides to Ease Your Cloud Migration Journey

Getting started with your migration One of the challenges with cloud migration is that you’re solving a puzzle with multiple pieces. In addition to a number of workloads you could migrate, you’re also solving for challenges you’re facing, the use cases driving you to migrate, and the benefits you’re looking to gain.

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How Google Classroom Helps State of Iowa Employees Serve the Public Better

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Regulatory-induced Challenges Create Hurdles to Cloud Adoption for Financial Services Firms

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