NYSE Euronext puts UK data centre under review

NYSE Euronext, the operator of stock exchanges in Paris, Amsterdam, Brussels and Lisbon, is “strategically and financially” reviewing the operation of its two-year-old, multimillion-pound UK data centre, which covers the area of more than six football pitches, Financial News has learnt.

NYSE has spent around $500m on two new data centres in the US and UK, which, in a single move, put the exchange’s systems business, NYSE Technologies, at the heart of its future strategy.

The group said earlier this year it was hoping to double its technology revenues to $1bn by 2015.
Its UK data centre, in Basildon, Essex – which was valued last December at £120m – houses matching engines for NYSE’s European stock exchanges, its Liffe derivatives market, the alternative platforms Arca Europe and SmartPool, as well as third-party venues.

It also offers co-location services, which enable trading firms to host their trading servers directly in the data centre and gain high-speed access to markets hosted in the facility.

However, one source said the 315,000 square foot facility remains “massively underutilised”, which has led to a review of its operation. The group is said to be “looking at a number of ways to strategically and financially better leverage the value of the site”, according to a source familiar with the situation.

One option being explored is to partner with other providers, such as major telecommunications firms and specialist data centre providers, to run the facility, two people said.

A source close to the situation said the exchange was not looking to sell the facility outright.
A NYSE Euronext spokesman declined to comment.

Imperium Centre Ltd, the NYSE Euronext group company which owns and operates the Basildon site, valued the facility at £120m in December 2011, including land, buildings and equipment, according to company filings.

The review comes amid efforts, announced by NYSE in April, to reduce its annual costs by $250m a year from 2014, as part of an initiative called Project 14.

At the time, the group said $90m of the savings would come from technology, with the “operation of data centres… reviewed and streamlined”.

However, one source said the review of the Basildon site did not form part of the Project 14 initiative.