London-based data and analytics provider BMLL Technologies has partnered with cloud data platform Snowflake to bring new financial datasets to Snowflake’s Marketplace and bring the cloud company further into the front office. The deal follows Snowflake’s investment into BMLL and will allow BMLL’s level 3 order book data to be delivered to Snowflake customers via its curated storefront of third-party data and applications.

The deal is the latest in a series of notable partnerships between large financial services vendors and the Montana-based cloud data provider. Following deals concerning generative AI with Nvidia and Microsoft, Snowflake allied with Bloomberg to make it easier for clients to use Bloomberg data to develop and run cloud-hosted data management tools and applications. Last year, Cboe Global Markets began migrating its on-premises data and analytics platform to Snowflake’s Data Cloud. And the year before, Snowflake was involved with deals with BlackRock’s Aladdin Data Cloud, State Street’s Alpha Data Platform, FactSet’s outsourced data mapping platform Concordance, Citi Securities’ post-trade revamp, and Northern Trust’s data-sharing initiative for asset servicing.

Harsha Kapre of Snowflake Ventures, the company’s venture capital arm, believes that the company occupies an interesting position in the capital markets tech space. He’s well-acquainted with the opportunity that financial services firms pose for Big Tech conglomerates, due in no small part to his 18 years at his former employer, IBM. While Snowflake’s cloud and data infrastructure has managed to capture a host of financial clients in the last few years, he says that Snowflake’s presence has thus far been relegated mostly to the back office. The new partnership with BMLL will see similar ones follow it, as Kapre says the company’s strategy is to bring more new and unique datasets onto its offering and to entice end-users into building custom applications using these datasets in its environment.

While it was BMLL’s data that initially appealed to Snowflake, Kapre said that the projects that the company was working on were a key factor in making the deal and putting up an investment. 

“We were really attracted to BMLL for that data, but as we dug a little deeper, they’re also doing a ton of really interesting data engineering to get that high-value data that would normally be on-premise, that every capital market client would be doing themselves. BMLL is doing all the heavy lifting up front, making a really unique dataset,” he says. “As BMLL also is moving more workloads to Snowflake, then we get into the realm of being able to say beyond just having this data, there are applications and other things we can enable for their clients and our joint clients beyond just the joining of data.”

BMLL CEO Paul Humphrey readily agrees that the company’s datasets are what sets it apart from other market data providers. As a provider of granular level 3 data, in which every order book message is captured, BMLL occupies a niche but enviable position for those seeking unique datasets.

“What we do is we take an end-of-day PCAP file from every venue that we onboard. Now, that level 3 PCAP file is every message the exchange sends on that day. Every cancel, every correct, every order, every timestamp, every order ID, auction flag. You name it, we collect it in its rawest of forms. It’s a huge amount of data,” Humphrey says.

After collecting the data, BMLL engineers it and stitches it together by the nanosecond. Humphrey believes that the propagation of this level 3 data through cloud providers such as Snowflake is yet another symptom of where the industry is headed—fully to the cloud.

“Snowflake are a fantastic distribution mechanism that really supports our strategy of democratizing the market by making our data available. When you think about historical data providers in the marketplace, most of them make over 90% of their revenue from the real-time world. The only people historically that have had access to Level 3 data of this engineered quality are the largest most sophisticated hedge funds. This was their secret sauce, the preserve of just these firms, and the whole rationale behind what we’ve built here at BMLL is to democratize access to this data.”

Dancing partners

The partnership is also notable for being the latest example of cloud computing firms muscling their way into the capital markets space. Cloud providers such as Google, Amazon Web Services, and Microsoft Azure have, in a short time, become the most important infrastructure providers to the industry, and it was only a matter of time before they sunk their teeth into other parts of the trading lifecycle. In the space of just over a year, Nasdaq began migrating its North American markets to AWS, while the London Stock Exchange Group inked a 10-year partnership with Microsoft, and CME Group saw a $1 billion investment from Google, the fruits of which have already been seen in new data analytics.

Humphrey believes that the winner of the battle for cloud supremacy in the capital markets will come down to the content produced, acquired, or partnered with.

“Think about the Netflix model; it was no good for them just to distribute other people’s movies. They had to make their own, otherwise nobody would subscribe to their services. So you’re seeing various financial market participants pick their dance partner, whether it’s AWS, Google, Microsoft, et al,” he says.

Kapre says that while Snowflake does have an active cloud computing presence, it does not operate in quite the same space as the Big 3 cloud providers due to its business model.

“If you’re running Snowflake, you’re inherently on every cloud provider. You can say, ‘I want it on GCP, AWS, and Azure’, and they’re all interconnected as essentially one platform. The use-cases that we drive and we support are all fundamentally being driven on the cloud providers at the end of the day, and that’s why they’re such good partners for us,” he says.

Going forward, both BMLL and Snowflake are looking to increase the number of partnerships to further grow both companies’ reach. As BMLL closed its Series B funding round in October, Humphrey says that BMLL’s main goal is to expand its coverage across asset classes. The company has since added the Johannesburg Stock Exchange and the Shenzhen Stock Exchange to its growing client list, which is now nearly 100. Humphrey says BMLL aims to add more coverage across the asset classes it already covers.

“Going forward, asset class expansion is certainly not off the table—that would be something we would consider in our future. We will continue to explore partnerships, certainly with financial market services firms, and we have some interesting ideas around that but certainly any large scale delivery mechanisms of this nature that we can partner with out there, we will look at,” he says.

Kapre also believes future partnerships will be key to expanding Snowflake’s user base and increasing its popularity among influential financial institutions.

“We’ve got some of the financial services, but I would say moving into that industry-specific realm is a little bit newer for us, right? There’s been a lot of investments, if you look at our portfolio, in the traditional ISVs. Our investments are focused more on companies that are building on top of Snowflake and have that added value of new use cases and new markets for us. That’s super interesting.”

Additional reporting by Rebecca Natale