I met up with the CIO at the London Stock Exchange last week.
Antoine Shagoury, joined from the American Stock Exchange in February 2010. He was brought on board partly because of his track record working with a trading platform from Sri-Lanka based supplier MillenniumIT. The London Stock Exchange bought MillenniumIT when it decided to replace its ailing trading system.
In one fell swoop it got hold of offshore development resources with hundreds of software developers in Sri-Lanka and one of the fastest systems in the market.
From an outsourcing perspective it is interesting because it is an example of a big corporate acquiring a technology supplier to get control of a market leading system and take control of its development. What is perhaps more interesting is the fact that the London Stock Exchange, rather than ending MillenniumIT’s services to other exchanges, is continuing to run MillenniumIT as a supplier.
The stock exchange is using the technology to reposition itself as an investment sector service provider. Using its core technology it is able to provide services to investment firms such as trading, data feeds, clearing, surveillance etc etc etc. But it can also sell technology to other stock exchanges, which it is currently doing successfully.
With its resources and position in the industry it can build and test systems using its vast IT resources and deep understanding of the business.
Interestingly Antoine was telling me about the exchange’s strategy to industrialise trading systems. The idea is to create off-the-shelf packages that can be customised to fit a particular customer. All based on the MillenniumIT technology.
It is using agile software development techniques and through giving the business visibility of development and creating prototypes quickly can create new services that the business requests quickly. These services can then be put into industrialised packages, and sold to other trading venues.