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What actually are...Co-location services?

Release date: 28 Jun 2013 | Eurex Exchange

What actually are...Co-location services?

Co-location services - hosting key trading technologies

Large companies are often facing the decision whether to build up and maintain their own IT infrastructure, or so use the services of a data center – a "Co-location". Co-location means the accommodation and operation of hosts in such a data center. Companies rent or lease so called Co-location services, to use the broadband and redundant connections of the data centers, which connects them, for example, to a trading venue.

By doing so, these companies avoid building up their own professional server rooms and the inherent expansive infrastructure. The spatial separation of company headquarters and server location also has the advantage, that should the company move or a power outage occur, only one location is affected, while the servers at the Co-location remain in operation.

There are several reasons for outsourcing servers:

• The data centers of the Internet Service Provider (ISPs) are perfectly connected to the internet.
• The products are hosted (accommodated) in rooms especially designed for these purposes (mostly air conditioned, video monitored and alarm-activated).
• Extinguishing systems and a multi-secured uninterruptable power supply are part oft he standard equipment of large data centers.
• In case of complications with a server, qualified service staff will be available 24/7, solve most of the problems on the spot.

Server hosting is another option. Server hosting (aka server housing, server homing) means hosting and connecting a clients server within the data center of a internet service providers (ISP). In server hosting, a company places its own hardware in a certain data center and uses the available infrastructure to connect to the internet.
Eurex Group works together with Deutsche Börse and technology partners like Equinix to offer customers robust co-location solutions. Co-location hosting means that exchange participants’ trading applications are located in the same data center as Eurex Exchange's matching engines. This is of special interest for algorithmic trading because it allows for even lower latency.

In today's highly competitive world of algorithmic trading, it is essential for high frequency trading firms to host their key trading technology as close as possible to Eurex Exchange's matching engines in order to remain competitive.
But it is also a good solution for other clients to use the same data center as the Deutsche Börse, as many other financial service providers and specialized service provider are also located here. That means infrastructural measures can be realized promptly and without problems.