Pressure to manage connectivity across fragmented global markets will see sell side firms spending some $2.3 billion this year on extranet and extranet connectivity, according to research and estimates from TABB Group.
Extranet services providers (ESPs) provide connectivity on demand which eliminates the need to internally mange a costly network of point-to-point connections, explains Alexander Tabb, partner at TABB and author of the research report.
He adds that while the idea of trading equities on the Johannesburg Stock Exchange (JSE), or hedging US dollar interest rates in Singapore seems like a great idea, setting up the necessary infrastructure to do that can be overwhelming, even for the most sophisticated firms.
“Whether it’s a small buy-side firm looking to connect to its brokers, a large sell-side bank that wants to reduce the operational complexity of its communications infrastructure and connect to the broader financial services community, or the new upstart ISV [independent software vendor] looking to gain access to new potential clients, extranets can serve all of these scenarios with minimal, up-front investment and the option to add capabilities on demand.”
