By Kelly Goetsch, President, MACH Alliance
I recently read the article Technology and the Evolution of the Markets by Nasdaq President and Chief Executive Officer Adena Friedman. In it, Friedman reflects upon how the capital markets ecosystem has evolved as Nasdaq celebrates its 50th anniversary, emphasizing the influence of technology. She also acknowledges the growth of the markets in size and scale.
Friedman wrote, "As an exchange operator, as well as a technology provider to 130 global markets, Nasdaq’s role is to 'maximize access and minimize friction.'” The piece goes on to talk about how Nasdaq has increasingly looked to the cloud to provide a low-latency environment with the ability to scale on demand, especially given the challenges presented by the pandemic.
She went on to say, “The cloud is meant to create almost infinite scalability. As a market operator, most of our surrounding systems and other services are cloud-based today.”
Nasdaq struck me as somewhat of a perfect case study for cloud computing given the importance of connectivity, accuracy and speed for their platform. Minimized friction also stands out as a necessity for Nasdaq's operations, which the cloud reliably delivers. There's a lot we can learn from their success about just how critical the right technology can be in enabling a business to succeed. When an organization can assemble the right digital infrastructure, the possibilities become endless.
Microservices, APIs, Cloud, Headless. Oh my.
Enter MACH. MACH technologies (which stands for Microservices-based, API-first, Cloud-native SaaS and Headless) support a composable enterprise in which every component of the IT architecture is pluggable, scalable, replaceable and can be continuously improved through agile development to meet evolving business requirements.
To ensure that enterprises - regardless of the industry - can innovate swiftly, especially as outside factors like the pandemic can have massive unforeseen impacts, owning a modular architecture provides competitive advantage. It's the most efficient way to deploy new features rapidly and retain control of your own digital destiny.
As Nasdaq's Friedman expressed optimism that technologies like the cloud and machine learning can further connect markets around the world in the future, for individual businesses that value proposition is around the ability to connect customers and employees around the world, keep business steady and stay relevant by meeting stakeholders where they are.
The bigger question here is whether companies are equipped from a technology standpoint to pivot quickly. Let's focus on retail, for example. As consumers are staying home more due to the pandemic and shopping online for many of their basic needs, not all retailers have found themselves prepared from a technology standpoint to handle the influx. Some lack the flexibility in their architecture to meet the fast-changing demands of consumers who expect to be able to shop across virtually any platform at any time seamlessly.
Now, let's look at the microservices piece of MACH in this context. Microservices provide businesses with the flexibility needed to ebb and flow as online shopper demands change, for example. They are small, standalone applications fronted by APIs that can be designed and deployed individually, much like a Lego brick. With each microservice, new features and functionality can be added or removed (think: payment functions, a shopping cart, search functionality and so on). This type of architectural set-up that's based on MACH has been a key to success for some of the biggest names in retail during the pandemic, as they've been able to quickly and seamlessly make changes based on what the buyer wants. The importance of delivering a superior customer experience cannot be overstated in helping companies stay afloat during these hard times.
Just ask the IT leaders
Whether in retail, heavy industry, food and beverage or beyond, technology decision makers agree there's a lot at stake when it comes to having the right digital backbone in place. A recent study conducted by DJS Research and commissioned by the MACH Alliance polled senior level technology decision makers (CIOs/CTOs, VPs/SVPs, Senior Managers) across the U.S., U.K. and Germany on how their IT architectures are performing today and if/where they're falling short. It gauged their appetite for change versus willingness to maintain the status quo and what factors are pushing them to re-think their technology set-ups.
Companies are struggling to meet evolving customer needs. More than half of respondents said they can not deliver improvements to the customer/end user experience at speed with their current infrastructure. Only about 1/3 said their infrastructure is keeping up with customer/end user demands.
As for the respondents' plans specific to implementing more MACH elements into their architecture, 81% of respondents noted a strong intention to increase MACH elements in their front-office architecture in the next 12-months. Ninety-four percent of those surveyed who hold c-suite titles said they would not maintain the status quo in the future regarding their intention to increase MACH investment.
The research also found that IT team resistance to change is the main barrier to moving to a new technological infrastructure with 40% noting this as the top barrier within their organizations. That was followed by the length of time between making an initial investment and seeing long-term benefits, and dependence on the current vendor for business continuity (tied for the second most commonly chosen option at 31%).
Onward and upward
While it's easy to trust the age-old way of doing things, moving to a new digital maturity model is beneficial in the long run in many ways. Having a modern digital core can futureproof a business and present opportunities for near "infinite scalability" as Adena Friedman said regarding Nasdaq's experience with cloud computing. Without the ability to pivot and scale as forces beyond our control remain, the power to control a businesses' own destiny becomes reduced. And for many in these uncertain times, that risk is too much to bear.
Kelly Goetsch is President of MACH Alliance, the independent non-profit organization dedicated to advocating for open, best-of-breed technology ecosystems.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.