Data Centers Move Closer to New York

Spurred by the laws of physics, some trading firms are moving their technology into New York area data centers, all to make sure their clients don't have to wait the fractions of a second data needs to travel out of the Northeast. It's another indicator of technology's growing strength on Wall Street.

The Wall Street Journal profiles Tradebot, a 20-person company started in Kansas City that recently co-located its computers in data center in New York in New Jersey. The move allows the firm to complete a trade in 1/1000 of a second, compared to the 20/1000 it took previously. The growing use of "split-second trading strategies," the Journal says, "has set off an arms race to shave the time it takes for orders to reach the computers of electronic exchanges."

At least 40 other companies have moved their computers into the same buildings as Tradebot's, or nearby. These include giants such as Merrill Lynch, Goldman Sachs, Deutsche Bank and JPMorgan.

The trend could bode well not only for IT specialists in the securities world, but for the engineers, networking professionals, technicians and others who support independent data centers that provide co-location services, especially those near Manhattan's financial center, or possibly other exchanges.