The need for speed is acute on Wall Street. A great symbol of that is the opening of the Mahwah, N.J., facility the NYSE Euronext just launched. Beyond the top exchanges, the sell-side is in something of an arms race for more advanced data centers. Equity shops spent $1.8 billion last year on data centers, according to Tabb Group. Half of that amount came from the sell-side, according to the Tabb report, which predicts that the sell side's use of data center space will increase slightly in 2010.

To keep their buy-side customers in the truck, all sell-side firms need the lowest latency and the closest locations (to their main data centers and operations). These trends are not expected to abate any time soon. Nearly 80 percent of hedge funds are not yet co-located, notes Tabb, and they are looking to their broker-dealers for that kind of infrastructure.

This arms race is spilling into other areas, with notable servers to expand network capacity. The reality is that despite a lot of regulatory angst, the movement toward even faster, more automated, high-frequency and algorithmic trading is only going to accelerate. The top broker-dealers cannot afford to be left behind.

For more:
- here's an article from Wall Street & Technology

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