Trillions in Trades Will Be Carried Out on Google Cloud via $1 Billion CME Deal

Less than a year ago, a major outage of Google services took down executive conferences on Google Meet, e-mails between employees on Google Workspace, and all the videos on Youtube those people use to kill time when technical difficulties arise (or just to goof off).

The next one could interfere with trillions of dollars worth of financial trades. That’s because, on Thursday, Google inked a 10-year deal with CME Group — the world’s largest financial derivatives operator at a $79.2 billion market cap — to move its trading systems to the cloud. It’s a huge victory for the tech giant, which is jockeying with rivals Amazon and Microsoft to be Wall Street’s server of choice.

Better Served

The Economist described Chicago-based CME as “the biggest financial exchange you have never heard of.” It runs exchanges for oil, currencies, interest rates, metals, stock indexes, cryptocurrency futures, and more, adding up to trillions in daily transactions. The Chicago Mercantile Exchange, Chicago Board of Trade, and New York Mercantile Exchange are among its best-known properties.

The fast-paced trading firms that make transactions through CME are used to the exchange’s own in-house system and data centers, which can process orders in fractions of a second. But starting next year, deals will go down on Google Cloud. Because of the vast resources it takes to keep such a complex system up and running, exchanges are increasingly banking on the cloud:

  • Nasdaq announced last year that it will move all 28 of its markets to the cloud by 2030, but it hasn’t chosen a provider yet.
  • Amazon Web Services ran a pilot last year with Singapore Exchange and London-based European trading system Aquis Exchange to prove its cloud servers could handle the massive volume of high-speed trades.

Why the Cloud?: It’s simple: paying for cloud servers is cheaper than maintaining massive data centers. Global IT spending grew a meager 0.9% in 2020 to $3.8 trillion, according to research firm Gartner, but cloud service spending grew 6.3% to $257.9 billion.

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