From Bloomberg via Canada's Financial Post, November 28:
About 45 minutes west of downtown Chicago lies a rather unassuming, glass-encased data center that some of the world’s largest markets depend on. By one 2018 estimate, at least $25 quadrillion of notional trade volume passes through the facility every day.
The Aurora, Illinois, complex has served as the primary hub of digital operations for the world’s largest futures exchange operator CME Group Inc. for nearly two decades. The 450,000-square-foot facility is famous among high-frequency traders and Wall Street firms, who’ve long jostled for position around the site to gain a leg up on competitors. At one point, DRW Holdings mounted an antenna on a utility pole near the complex to cut down on the latency. Rival Jump Trading bought property across the street for its own antenna. Scientel erected a tower, too.
Traders want to be close to the data center to reduce latency, minimizing the distance data must travel in order to shave microseconds off their trades. As a former executive of the data center’s operator once put it: “If you read the book Flash Boys, you can get a real quick lesson on what’s going on.”
On Friday, the data center — located in the Chicago suburb probably best known for serving as the setting of the comedy film Wayne’s World — became infamous to all who trade across equities, foreign exchange, bonds and commodities markets globally. A malfunction in the cooling system at the complex took down virtually all CME futures and options trading platforms, wreaking havoc for traders around the world. The operator of the data center, CyrusOne, said that its teams were working “around the clock” to respond to the cooling system issue but didn’t respond to further questions.
This critical piece of infrastructure to global markets dates back to 2009, when CME started building the facility to host its electronic trading infrastructure, essentially serving as the backbone for CME’s futures and options trading platform Globex.
In 2016, CME decided it wanted to shift away from owning infrastructure and sold the site to Dallas-based CyrusOne. As part of the deal, CME agreed to rent space from CyrusOne for 15 years so it could continue to house the computers at the site that keep its markets running, essentially outsourcing its day-to-day operations.
CyrusOne knew what it was getting into. Gary Wojtaszek, the company’s chief executive officer at the time, described the data center to analysts as “ground zero” for high-speed trading and the “epicenter for all the futures trading.” In laying out the business case for a new tower that the company was building there in 2018 to boost connectivity, he emphasized that “speed is of the essence there.”
With that, CyrusOne added Aurora to a broader portfolio of roughly 50 data centers across the US, UK, Germany and Singapore that serve customers spanning the technology, financial services, energy, medical, research and consulting industries.
CyrusOne’s business case is built on going after big clients like CME that are buying virtually all of the space in a data center, according to Tobias Bopp, a manager of strategy and transactions at the consulting firm EY-Parthenon. “They’re building a lot of new data centers, and their position in the market right now is pretty important,” Bopp said in an interview....
