It’s not a Build vs. Buy Technology Choice Anymore 

Executive Summary

Capital markets firms are increasingly moving away from a binary “build versus buy” mindset in favor of a hybrid approach that balances customized control with third-party efficiency. By outsourcing standard market data infrastructure to specialized vendors like Exegy, firms can significantly reduce costs and time-to-market while redirecting their engineering talent toward high-value, alpha-generating activities. Detailed cost analyses reveal that in-house software and FPGA solutions are substantially more expensive and slower to deploy than vendor-managed alternatives, making a balanced strategy essential for maintaining a competitive edge.

While capital markets participants once faced a binary “build versus buy” choice—whether to build high-performance trading technology in-house or buy third-party solutions—many sophisticated firms now seek a more nuanced middle ground. 

Thanks to the evolving technology marketplace, today’s firms can craft solutions that allow them to exercise fine-tuned control over some aspects (the “build”) while purchasing other parts off the shelf (the “buy”) to reach new markets more quickly. 

What Is a Hybrid Approach to the Build vs. Buy Dilemma?

Exegy’s Chief Product Officer, Laurent de Barry, previously discussed the range of options available to firms in an interview with Markets Media.  De Barry noted that partners such as Exegy can help guide financial firms in these decisions, which are based on a complex set of circumstances (e.g., venues, asset classes, geographic regions) that may change as their strategies change. 

Balancing Control and Agility

He goes on to say that firms can choose to maintain control over the differentiated parts of their infrastructure (the “secret sauce” of their operations) while using less customized solutions for aspects of their tech stack where quick time to market is most important.

This approach maximizes one of the most precious resources a firm has: its engineering talent. At a time when firms struggle to hire qualified engineers, particularly experts in field-programmable gate array (FPGA) technology, it’s important to put that staff to work on alpha-generating activities and let a trusted partner handle the rest. 

What’s the True Cost of Build-Your-Own Trading Infrastructure?

Exegy’s whitepaper series, The True Cost of Real-Time Market Data Infrastructure: Quantifying the Build vs. Buy Debate for Capital Markets Firms, offers detailed analyzes that break down the cost difference between maintaining real-time market data infrastructure entirely in-house and buying from specialized vendors. 

Many firms are under the impression that building custom market data processing systems to meet their unique needs is the best way to retain complete control over their trading technology. However, Exegy’s findings suggest that the true cost in time, resources, and ongoing maintenance is substantial, totaling millions of dollars and years of effort.

Software-Based Market Data Processing 

Part I of the series, A Cost and Resource Analysis on Building and Maintaining Market Data Processing Technology in Software, concludes that software-based in-house solutions are:

• 8 times more expensive to build: Building full North American coverage in-house costs $4.74 million versus $600,000 with vendor-managed solutions.
• 7 times slower to achieve market coverage: Market data vendors such as Exegy deliver production-ready solutions in 4-6 months, compared to 3.5 years for in-house teams.
• 2.6 times more costly to maintain: Annual in-house maintenance costs exceed $3.5 million, while a vendor-managed solution can be maintained at an annual cost of $1.47 million.

FPGA-Based Market Data Processing

Meanwhile, part II of the series, The Cost to Build and Maintain Market Data Processing Infrastructure Using FPGA Technology, focuses on the costs of building and maintaining in-house FPGA feed handlers. 

The conclusions drawn show similar divergence in the build versus buy figures, suggesting that in-house solutions are:

• 5 times more expensive to develop: The development of the first in-house FPGA feed handler costs $5.35 million. Covering 18 North American markets totals $9.79 million, compared to Exegy’s FPGA feed handler solution at $1.8 million annually.
• 2 times as costly to scale: Each additional FPGA feed handler adds approximately $261,290 in development costs, more than double that of vendor-managed infrastructure.
• 6 times slower to production: Building the first FPGA feed handler in-house takes 3.5 years, with each additional venue adding 8–12 months of development and testing. Achieving full North American coverage requires roughly 6.5 years, compared to around 20 months with Exegy’s FPGA feed handler solution.

How Do We Find the Best Balance Between Build vs. Buy?

The interview with de Barry explains what firms should think about in technology planning as they move forward. By moving from a build versus buy decision-making process to a more sophisticated focus on control and agility, smaller firms can successfully compete against better-resourced market participants. 

Exegy’s wide array of solutions means we can reliably meet the needs of any firm, regardless of where it stands on the control/agility spectrum. In other words, you can’t build better, and certainly not for a more reasonable cost. For expert guidance in striking this balance with a hybrid approach to market data infrastructure, reach out to our team to set up a consultation.