Equity firm avoids infrastructure hurdles at inception

In a move to save both time and money, a new equity marketplace has struck a deal with Q9 Networks Inc. to provide infrastructure services, including managed services and physical space.


Trading and Quotation System Inc. (CNQ) is a startup Toronto-based business, slated to launch this June, that will focus on the needs and characteristics of emerging companies, their investors and investment dealers in trading equity securities.

The company’s COO, Michael Malone, said that the decision to outsource CNQ’s infrastructure was based on both cost savings and a quick rollout.

“”One of the things we’re doing as a startup is trying to contain initial capital outlays and ongoing costs, and by going to a place like Q9 to provide hosting services we can avoid the initial outlay,”” he said. “”We don’t have to hire staff, train staff, or create a support infrastructure, which would have been a huge impediment with us getting going.””

Because most of its clients are public companies that are generally smaller than those represented on the Toronto Stock Exchange, CNQ runs its own organization with an eye on the bottom line. “”Our customers are very cost conscious, and we have to be the same in the management of our own business,”” Malone said.

Osama Arafat, Q9 Networks’ Toronto-based CEO, said that this type of outsourcing particularly makes sense for a smaller new company. Besides physically hosting its infrastructure just down the street from CNQ’s downtown Toronto office, Q9 is also managing services such as bandwidth and firewalls.

“”They are able to take advantage of the infrastructure that we’ve built — things like redundant power, our connection to all of the major Internet service providers, our staff that’s available 24 x7 — at a fraction of the cost of building their own,”” he said.

Dan McLean, director of enterprise network services at IDC Canada in Toronto, said that Canadian companies are continuing to recognize the value in outsourcing.

“”Companies are increasingly seeing infrastructure as a thing they don’t necessarily need to manage themselves; there are a variety of alternatives including outsourcing using a host,”” he said.

According to Malone, the CNQ trading system has been designed for complete redundancy, and the company is relying on Q9 to keep them up. This, Arafat said, is guaranteed.

Part of the reason that CNQ chose Q9 was because of its strong ties to the financial community, including banks and other institutions that handle investments. As a new player on the scene it’s very important that they have that kind of association, Malone said.

Both Arafat and Malone agreed that the biggest challenge encountered thus far has occurred in the design stage. “”This phase is alwa

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