For Immediate Release:
Martin Rabkin, martinrabkinink
914-420-5739 / email@example.com
Connectivity Challenges Peaking as Market Fragmentation Accelerates Globally, TABB Says
Global Sell-Side Investment on Communications in 2012 Estimated to Reach Nearly $5.2 Billion, with Extranet Connectivity Capturing 45% of Total Spend
NEW YORK & LONDON, January 24, 2012 – The need to manage connectivity efficiently across today’s rapidly fragmenting global marketplace is putting increased pressure on both sell-side and buy-side firms across asset classes trading in developed as well as emerging and frontier markets, says TABB Group in new research published today.
“The complexities of trading today’s global markets demand communications resilience and redundancy,” says Alexander Tabb, a TABB Group partner and author of “Financial Services Extranets: Connecting a Fragmented Trading World,” adding,” an extranet service provider (ESP) can provide that connectivity on demand, eliminating the need to internally manage a costly network of point-to-point connections.”
Trading equities on the Johannesburg Stock Exchange or hedging US dollar interest rates in Singapore, he explains, requires setting up infrastructure, including extranets and managing connectivity, which can be overwhelming even to the most sophisticated firms. “Whether it’s a small buy-side firm looking to connect to its brokers, a large sell-side bank that wants to reduce the operational complexity of its communications infrastructure and connect to the broader financial services community, or the new upstart ISV looking to gain access to new potential clients, extranets can serve all of these scenarios with minimal, up-front investment and the option to add capabilities on demand.”
According to TABB estimates, extranets and extranet connectivity is expected to capture 45% of the $5.2 billion global sell-side spending on communications in 2012.
It’s no longer feasible for most firms to manage their own network of direct connections for trading different asset classes in major financial centers and emerging and frontier markets through their brokers, Tabb says. “Firms need to find a scalable mechanism to manage their own communications infrastructures without having to invest massive amounts of capital into proprietary communications hubs.”
The 21-page report with 14 exhibits is based on interviews with buy-side and sell-side firms with national or global connectivity requirements, and telecommunications firms and communications technology vendors that provide connectivity services. Conversations focused on the challenges of connecting fragmented markets in the US, Europe and Asia; the role of extranet service providers (ESPs); major extranet service vendors with their geographic footprint, on-network community, market differentiations and market focus; and six criteria buy-side firms can use to select an ESP vendor.
The new report is available for download by TABB Research Alliance clients and pre-qualified media at https://www.tabbgroup.com/Login.aspx. For an executive summary or to purchase the report, visit http://www.tabbgroup.com or write to firstname.lastname@example.org.
About TABB Group
TABB Group is the financial industry’s only strategic advisory and research firm focused solely on capital markets, based on the proven interview-based research methodology of “first-person knowledge” developed by founder Larry Tabb. For more information, visit www.tabbgroup.com. In January 2010, TABB launched TabbFORUM, the online capital markets community for thought leadership focusing on issues covering current industry-wide topics.
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