Moving into the cloud becomes much more cost-effective, according to Terry Duffy, Chairman and CEO of CME Group.
Speaking on the Episode 350 of the Inside ICE House Podcast with Josh King, he said that the biggest issue facing the world today is cybersecurity.
“The cloud providers, in my opinion, probably have a better setup than some proprietary system as it relates to cloud security from the hackers,” he said.
“The bad guys are much better than the good guys, unfortunately. And so I think that’s another feature that will drive more and more people into this,” he added.
He thinks that ICE has a different viewpoint on this when they acquired IDC for their data business and technology needs, and they have other proprietary technology just like CME does.
“I look at the cost of all this stuff continues to escalate, and I’m a big believer in the umbrella theory, meaning that when it rains, you better get a little bit bigger umbrella because maybe two of us need to fit under it. It gets more expensive is my point,” Duffy said.
In 2022, CME Group built out the cloud platform and successfully migrated some early application.
On its Q4 2022 Earnings Call, Duffy pointed out that 2022 was a fundamental year for their Google partnership.
According to Duffy, 2023 will be about accelerating our application migration, including launching data products in the cloud.
“We have an aggressive migration plan for ‘23 and look forward to reporting our accomplishments throughout the year,” he said.
“When you look at, especially my deal with Google, when I want to bring products to market, I can do it much faster than I can in-house, and that’s the objective for the future,” Duffy commented on the Inside ICE House Podcast.
He added that there’s a lot of benefits that go into this.
“They were prepared to invest in me, which they did, and I thought that showed a lot of commitment by Google to understand that finance is going to be a big part of the cloud business,” he said.
“I like where it’s going. At the same time, the reason why I said it’s going to be over a 10-year period because I don’t want to push it into something when it’s not ready to go forward,” Duffy added.
Duffy also said that he’s very proud of how far the industry has come.
“I think that’s a good way to say it. It’s the industry. It’s not just CME,” he said.
Duffy said that the whole industry was able to grow leaps and bounds, but it’s difficult for people that cannot adapt to change.
“I think there’s a lot of industries that go from one thing to another and people just can’t keep up with the technology or don’t want to keep up with the technology or don’t believe in it, and they think it’s inferior to what technology can provide,” he added.
Unfortunately, there are people that get displaced along the way and you hate to see it, but the growth of the business is amazing, according to Duffy.
“The day I walked in here to do the IPO in 2002, our average daily volume was less than a million contracts. Today, our average volume is over 23 million contracts,” he said.
Duffy added that the distribution of product around the world today is so much greater, which makes the markets deeper, liquid, more efficient for people to execute their risk management.
“So to me, I think the whole industry should be proud of where it’s come,” he stressed.
