Adaptive’s Matt Barrett Calls Public Cloud Migration ‘Inevitable’ for Brokers

FinanceFeeds has released a new episode of the FF Podcast, hosted by Editor-in-Chief Nikolai Isayev. This episode features Matt Barrett, CEO and co-founder of Adaptive, a capital markets software engineering firm known for its open-source technology Aeron and its expertise in building bespoke trading technology solutions and helping firms modernize their tech stacks.

Matt Barrett walked listeners through his path from New Zealand software engineer to fintech founder, detailing his company’s unique position in building institutional-grade systems for brokers, exchanges, and market operators. The conversation also tackled cloud migration, case studies, regulatory fragmentation, and why many brokers still misjudge their own technology priorities.

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“I grew up in New Zealand and went to university there. I did a master’s in computer science. So I came out of that around 2004 and moved to London straight away,” he said. “I worked in London for five or six years outside of finance in a range of different jobs as a software engineer. Some quite different from finance and some with a lot of crossover.”

Barrett entered finance in 2010, before joining Barclays. In 2012, he co-founded Adaptive with colleagues from his consultancy days. “We have been building trading venues for our clients for the last 12, 13 years,” he said. “We don’t sell a specific point solution. We have taken a bottom-up approach, starting with open-source software that suits the financial services community, building a development platform on top, which lets you build out an actual business capability.”

“Mass migration of institutional trading systems to the cloud”

Adaptive’s acquisition of Real Logic in 2022 brought Aeron, a high-performance, low-latency messaging and clustering protocol, into its stack. “Aeron is focused on being a high-performance, low-latency messaging solution. In the finance world, that means it sits at a similar level of the stack as proprietary messaging technologies like Solace or TIBCO,” Barrett explained.

Barrett described Aeron as a native fit for cloud infrastructure. “One of the things we say about Aeron is that it is cloud native, which means that it’s a low-latency messaging solution that is highly performant on the cloud.”

The firm’s broader thesis is that capital markets will increasingly shift from on-premise infrastructure to the public cloud, driven by economics, performance, and scale.

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“We think that there’s going to be a mass migration of institutional trading systems to the cloud,” the Adaptive chief executive said. “The cost-benefit ratio is getting so great that capital markets participants are going to move over to the public cloud infrastructure rather than staying on their own separate track, which has a lot of cost and complexity embedded in it.”

He likened capital markets infrastructure to a global shadow network. “Everyone thinks the only globe-spanning telecommunications network is the internet, but actually finance has a similar system. It’s just not ‘cloudy’. It’s all manually configured. There are people that go out and plug cables in.”

Barrett contrasted this with the public cloud experience: “When you speak to a cloud provider, well, firstly, you don’t speak to them. You insert a credit card, you push a button, and you have infrastructure deployed for you. You can click another button, and it can be redeployed anywhere else on the globe.”

Security concerns, often cited as a barrier to cloud adoption, are outdated in his view. “The cloud providers have spent a lot of time and money making sure that you can get the security guarantees that you had previously with your own data center replicated in the public cloud,” Barrett said.

He described the shift in thinking among large institutions. “We built a fixed income trading platform for a major U.S. financial institution that went on to run on AWS. When they first started building, the feedback they had from their participants was, ‘We’re not ready to send our order flow into the public cloud.’ Two years later, those same firms said, ‘Oh, it’s fine now. Please move into AWS. We trust it.’”

Barrett also noted the engineering advantage: “Chip design is now driven by cloud providers. So if you want to have the fastest CPUs, you need to be running your workloads in the cloud.”

On the topic of performance, he addressed latency directly: “It’s absolutely the case that over the last four to five years, the default cloud services that AWS and others provide were not built to target capital markets workloads. But AWS and Google are spending money to make their infrastructure more supportive of capital markets front office workloads.”

He cited major partnerships as evidence: “You can’t find a major exchange that doesn’t have a partnership with a cloud provider—AWS and NASDAQ, Google Cloud and the CME, Azure and LSEG.”

Case Studies: ADSS, Tradu (FXCM), EDX Markets, Kepler Cheuvreux

The conversation moved into case studies. Barrett outlined Adaptive’s work with ADSS, Tradu (FXCM), EDX Markets, and Kepler Cheuvreux.

“ADSS had a dream, a desire to build a novel differentiated retail trading platform. They came at it from the perspective of wanting to build something really bespoke,” he said. “We helped them launch over the course of 12 to 18 months, starting from nothing to building the system, deploying into AWS, getting them live, doing their first trade.”

He described Tradu’s strategy as “a very considered mix of bespoke development and vendor-provided service. Their CEO is a very thoughtful person who is carefully planning  how to piece together the technology that underpins his business.”

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Adaptive’s work with EDX Markets focused on delivering a cloud-native clearing and settlement platform. “They have gone from strength to strength,” Barrett said.

Kepler Cheuvreux is another client. “They are very forward thinking about the mix of public cloud and co-location infrastructure in the equities market. They are taking a hybrid approach and are deploying bespoke execution capabilities.”

“There’s definitely a disconnect in the broker space.”

Reflecting on broker technology decisions, Barrett warned that many firms still undervalue what matters. “There’s definitely a disconnect in brokers,” he said. “When considering who is typically responsible for making business strategy decisions, it’s often not someone with an engineering background. As a result, their perceptions of technology costs and capabilities may not always reflect the latest advancements and opportunities in the field.”

Asked about the tipping point where custom development beats buying off-the-shelf platforms, Barrett explained: “The tipping point occurs when the cost-benefit ratio clearly shows that, despite the risks of embarking on a new venture, the advantages of owning more of the technology stack outweighs the risks of the broker’s current situation.”

He continued: “Many brokerage firms come to us because they’ve already started doing some work with Aeron. They say, ‘We’re going to go down the more technology-led road here… we’ve built this initial technology stack, could you help us support it or do more or go faster?’”

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He described the reality of shifting from vendor products to owning infrastructure. “It’s not that the grass is greener. Now you have to manage engineers. You have to have technology that people want to work on, that furthers their career. But owning the tech stack allows for greater customization, control over the development roadmap, and the ability to innovate and differentiate in ways that vendor products may not allow.”

“The pace of change is accelerating.”

Looking ahead, Barrett offered a candid take on market uncertainty. “I think the brokerage community needs to get ready for an ever-increasing amount of change and disruption to their existing business models. Whether that be through regulatory change, geopolitical shifts, or approval of new asset classes.”

He advised agility. “They need to plan for smaller bets more frequently than larger bets that take a longer time to come off. The time cycle of change is decreasing.”

He closed with some advice. “If a shift to the cloud is seen as a purely IT or technology-driven initiative, there is no way it can deliver the business outcomes that would otherwise be possible. It really needs to be seen as an enabler of a very distinct set of business strategies.”

The FF Podcast is available on all major streaming platforms. Adaptive continues to work with global clients advising on cloud migration and building bespoke trading platforms, matching engines, trading UIs, and connectivity infrastructure—on premises, hybrid, and in the cloud.