Split datacentres to beat space shortages, City told

Datacentres for hosting financial trading applications in London could be scaled back and developed using a modular datacentre design to overcome space and power limitations, an expert in sourcing datacentre locations has said.

Datacentres for hosting financial trading applications in London could be scaled back and developed using a modular datacentre design to overcome space and power limitations, an expert in sourcing datacentre locations has said.

Stephen Taylor, associate director at real estate firm CB Richard Ellis, which offers datacentre valuation and leasing services, said, "Supply in Docklands has dried up. It is no longer appropriate to host 100,000-square-foot datacentres there."

Because of financial regulations, City banks must locate datacentres a minimum of 15km from their London head office. However, due to the need for real-time processing, datacentres could lose trades if they are too far away, Taylor said. This is due to the delay, or latency, in replicating transactions across a network over a long distance in real time.

Taylor said a lack of suitable sites for large server rooms meant that City banks would need to downsize their datacentres.

He said banks would need to split their requirements between IT platforms that need real-time replication, such as front-office trading platforms, and the more process-driven elements that could be housed further afield.

Rakesh Kumar, research vice-president at analyst firm Gartner, said, "It makes a lot of sense to split datacentres." However, he added that this went against established best practices.

The 15km restriction governing the location of datacentres for financial institutions is a stipulation of the Sarbanes-Oxley regulations, said Ian Mitchell, an analyst at stockbroker Charles Stanley.

He said the challenge for banks was to strike a balance between regulatory requirements and the need to compete in the financial markets, where speed of trade is paramount.

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