Power algorithms needed…
Here is a story (from efinancialnews.com) that caught my eye: “Electricity shortage stalls IT development”
Complex trading strategies have fuelled an explosion in market data that algorithms crunch to enable traders to pounce on every market opportunity. But, while chips offer more processing power than before, Wall Street is experiencing a technology challenge: finding enough electricity to feed and cool power-hungry servers crammed in overheated data centres.
For Cristóbal Conde, chief executive of financial services group SunGard, this poses big problems. He said: “Data centres were designed with a ratio of power consumption versus square foot. With the power requirements of the new hardware, these ratios are no longer valid.
“Some data centres operate at only 70% capacity because there isn’t enough power.”
Bringing enough power to a Wall Street tower housing a financial group’s data centre creates structural problems, as huge cables must be safely fitted into buildings that are not designed for powerful wiring.
According to sources, extreme data crunching can raise the temperature at the back of a server rack by 10 degrees compared with the front box facing a cooling unit, creating operational risk. The faster the chip, the hotter the room, and the more electricity is needed which is difficult to accommodate.
I don’t want to overthink this but longer term, what does this portend for location and real-estate trends for trading hubs? Do you really want to be in the middle of a big hot city? Where is the tipping point between the (human) network effect of clustered competencies and the (machine) need for big and cool?
Will hedge funds and exchanges migrate north? Will McKenzie Brothers be the quant-driven investment bank for the 21st century? Based in Newfoundland to take advantage of the cool weather and being 30min ahead of New York - so they can see the future first of course…)
July 24th, 2006 at 11:01 pm
And it ain’t just Wall Street and the East Coast…
http://news.com.com/MySpace+feels+the+heat/2100-1038_3-6097798.html
Predictably Google have already figured this out, hence their new mega-datacentre in the temperate pacific northwest…
July 25th, 2006 at 11:27 am
I think you’ll find that’s 90 mins ahead of NY: three times as much extra future- woohoo!!
Next stop Siberia?
August 7th, 2006 at 10:07 pm
Sean,
Do you remember our discussion about delocalizing trading and trading floor? What are hedge funds if not delocalized trading desks?
Moving towards the north may be fine for computers, but we are still human beings … Not certain the chaps running the machines (traders or not) will be happy to move to the poles.
At the end of the day, I don’t care where my server is, provided my Wifi connection allows me to work from my pool here in south of france …
JR