Behind the Wombat acquisition

By: Ray Pellecchia

File Under: TransactTools

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What's Behind NYSE Euronext's Acquisition of Wombat? (WallStreetandTechnology.com blog) Excerpt:

“We think it’s a good strategic fit that complements our already rich suite of products that we offer to clients to handle their trading infrastructures and hand their massive data feeds,” says Larry Leibowitz, NYSE Euronext head of global technology in an interview yesterday.

Wombat has been the leading global player in offering low-latency market data and direct data feeds from ECNs and exchanges to feed into automated trading systems. It has installations in most of the top 15 investment banks. ...

NYSE Euronext plans to integrate Wombat’s market data enterprise software and services with the NYSE TransactTools connectivity and messaging business. NYSE TransactTools houses the Secure Financial Transactions Infrastructure (SFTI) network, which provides a network of transaction services including connectivity to various execution venues and third party services such as order management tools. Noting that the two product sets (Wombat and TransactTools) are complementary, during the interview, Sam Johnson, EVP and CEO of NYSE TransactTools, says, with the SFTI in the mix, they can be made available to the market in different ways.

“With SFTI’s soon to be global network, and all the different data centers scattered around its markets, you can put trading technology like algorithmic trading engines in a data center co-located next to a market,” says Johnson. “Using this technology, you can consume, process, analyze and make trading decisions on data on the lowest possible latency and get orders executed in the market,” adds Johnson.

NYSE Euronext is also acquiring Wombat to help customers deal with “the rising cost and latency demands of market data, which many of them can’t provide themselves because of the cost,” says Leibowitz. “Customers have expressed a need for as much data as possible, while they’ve also expressed concern about the rising cost of the data, he says. “The need for data has exploded in terms of products. It used to be Level One and now customers need depth-of-book products," agrees [Ron] Jordan, NYSE Euronext’s head of market data services. “The volume of each of those data products has exploded as well,” says Jordan. “It’s a double whammy for those firms in managing this data,” he says.

Have a wonderful Wednesday, folks. Your daily dose of historical trivia:

Financial Flashback (WSJ.com)
January 16, 1987 -- The almost eerie euphoria that has permeated the stock market so far this year sent the Dow Jones Industrial Average spiraling 35.72 points to its ninth consecutive record close. NYSE volume hit a record 253.1 million shares.

Also On This Day (NYTimes.com) in 1991, the White House announced the start of Operation Desert Storm to drive Iraqi forces out of Kuwait.

Operation Desert Storm also produced a 100+-point rally in the Dow, ending a months-long market slump that followed Iraq's taking of Kuwait. I remember we held the opening that day for a minute of silence, which ended in a huge, patriotic roar on the trading floor.