New York special: Survival of the biggest (DataCenterDynamics)

Who cares about exchange consolidation when you can talk about data center consolidation? Although, the former is now in direct competition with the latter and mergers in both sectors are in part driven by the competition this all creates. Luckily this should all lead to better service and price for the end user. More locations, more connectivity options and (hopefully) more competitive pricing. There will always be the contingent of trading firms that need to be in the same room as the matching engine, but that contingent really only accounts for about 2% of trading firms in the US. So if Equinix, for example, can undercut NYSE cost per cabinet by 30%, and then Telx does the same to Equinix by another 30% the lower cost will be hard for that hedge fund in Greenwich to pass up.

McPartland says this has meant the market in New York has changed considerably over the last year. “There are not a lot of players left,” he says. And from where he sits, he can hear a lot of CTOs showing interest in smaller players that can prove they have the required latency, connectivity, proximity and power resources, suggesting that the time could now be right for smaller players that have ticked the right boxes to name their price.

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