Nasdaq partners with Amazon to offer brokers cloud storage

A match made in clouds.

Nasdaq OMX announced it has agreed to partner with Amazon.com to give U.S. brokers a new way to store data and records that regulators require them to maintain. Instead of keeping trading and other information in their own data centers, brokers will be able to put it on servers run by Amazon; access and encryption will be provided by Nasdaq OMX, which is seeking to expand sales sources as profits from stock trading shrink.

For Amazon, the plan is a way to add financial customers for the data storage and other cloud computing services it offers to clients such as NASA, Netflix (NFLX) and hundreds of thousands of businesses.

For the unfamiliar, cloud computing uses a shared pool of remote servers to store data and run applications. Brokers will be able to store order and transaction data and maintain their books and records in the companies’ FinQloud initiative – Amazon Web Services will provide the technology infrastructure and manage the data centers; brokers using the service will pay per-gigabyte fees based on the amount of information they store.

Amazon generated $800 million in sales from the services in 2011, up from $300 million in 2010. Nasdaq OMX also plans to use the service for its own so-called routing broker, which it employs to send orders to other U.S. markets; keeping the data it must store in the cloud will reduce Nasdaq OMX’s operating costs, they hope.

NASDAQ OMX (NDAQ : NASDAQ : US$23.15), Net Change: -0.57, % Change: -2.40%, Volume: 1,146,185
Amazon.com (AMZN : NASDAQ : US$252.49), Net Change: -2.32, % Change: -0.91%, Volume: 3,406,922

About the Author

Canaccord Genuity Inc. is a global investment banking and institutional brokerage firm. Their website is www.canaccordgenuity.com.

For disclosures of any equities mentioned here please see: http://www.canaccordgenuity.com/en/ODD/pages/disclosures.aspx.

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