Capital markets data provider Exegy has launched a new whitepaper series quantifying the true cost of real-time market data infrastructure. Drawing on benchmarks from current and former executives at Tier 1 banks and hedge funds within their elite client community, Exegy details the full costs, time-to-market, and staffing required to build and maintain systems to process and distribute real-time market data from direct exchange feeds.
Part 1 focuses on software-based implementations and reveals that building and maintaining in-house systems is significantly more expensive, slower, and more burdensome than leveraging vendor-managed solutions.
Developing a single software feed handler and supporting infrastructure in-house can cost up to $1.8 million. Full US equities coverage (20 markets) exceeds $4.7 million, more than eight times the cost of Exegy’s software solution.
In-house teams take more than three years to achieve necessary market coverage, compared to at most six months for integration and deployment with Exegy. Annual in-house software maintenance costs exceed $3.5 million, while Exegy’s fully managed solution reduces these recurring expenses by more than two times.
Firms often struggle to gain a comprehensive view of the total build and maintenance costs of these complex systems, as they are often obscured by divisions of staff and budget within large, sophisticated trading firms. This impairs their ability to make decisions on how to value expert partners, where to engage with them, and further prevents them from liberating resources to focus on projects that can deliver differentiated performance for their businesses.
“We initiated our rigorous analysis to better understand and communicate our value. The data greatly enhances our ability to serve as a trusted partner to our clients and engage in meaningful conversations about optimizing the performance and cost structure of their businesses,” said David Taylor, CEO of Exegy. “For example, the finding of lower maintenance costs debunks the commonly held view that firms will reap savings over time after investing in an expensive and time-consuming build effort. It provides quantitative support for partnering with us to get to market faster and to focus their time and resources on proprietary innovation.”
“It was also past time for the industry to move beyond hand-waving about ‘build versus buy’ to real conversations with real numbers.”