For trading applications, microwave is emerging as a viable alternative to fiber as a medium of choice, and data centers are embracing both.

Developers say microwave holds considerable promise as an emerging low latency technology, but its complexity is a level beyond fiber.

The use of microwave requires a line of sight, and distance limitations result from the trade-off between distance and bandwidth. Microwave is also susceptible to weather effects.

Yet fiber, while still the most resilient and highest capacity transport media among the viable options today, has some limitations that microwave can trump.

“There’s no ‘data’ in data center without a communications infrastructure to supply data, to communicate with counterparties,” said Michael Blundin, general manager for managed services at investment technology provider Vestmark. “Appetite for bandwidth is constantly increasing, so situating data centers where communication facilities are excellent is paramount.”

Fiber routes are typically buried in the ground or hung from poles, and in either case they follow existing rights of way such as roads and utility easements, which are not typically along the most direct route.

Microwave, on the other hand, is a line-of-sight technology enabling deployment along a more optimal path.

Additionally, microwave has a ‘speed of light’ advantage over fiber that has to do with the physics related to the refractive index of light passing through glass versus through the air.

Fixnetix, a managed services provider of ultra-low latency market data, trading and risk control, has launched microwave access between London and Frankfurt in just 2.375 microseconds (one way) for NYSE Euronext, NYSE Liffe, Xetra and Eurex co-location data centers. Fiber routes generally perform the same one-way route in around 4.15 milliseconds.

The Fixnetix service is being provided in partnership with Custom Connect MW, a joint venture of engineering companies that provides microwave links for mission critical applications.

Custom Connect MW designs, constructs and supports ultra-low-latency microwave connections.

In order to enable the financial community to trade faster between major financial markets, Custom Connect MW plans to build multiple links between Europe’s financial exchanges.

Under the deal, Fixnetix has signed an exclusive agreement to act as a re-seller of available bandwidth and provide a data service over the link including forthcoming latency upgrades, which will also cover additional exchange colocation facilities in London and Europe.

“We have chosen Custom Connect MW as the right partner in helping us respond to global customers seeking the strongest managed outsourced model for scalability and costs,” said Hugh Hughes, chief executive of Fixnetix, in a statement.

Fixnetix provides a real-time low latency filter, iX-eCute, and field-programmable gate array, or FPGA, to solve the eternal industry conundrum of pre-trade risk, compliance and ultra-low latency execution.

iX-eCute opens the marketplace to all participants with no detrimental impact on trading performance, the company says. The microchip enforces pre-market risks at nanosecond time frames whilst preventing impact on latencies that historically have slowed down more traditional trading systems and models.