The agreement is more of a hybrid cloud arrangement with AWS Outposts.
FTA:
>Core to Nasdaq’s move to AWS will be AWS Outposts, which extend AWS infrastructure, services, APIs, and tools to virtually any datacenter, co-location space, or on-premises facility. Nasdaq plans to incorporate AWS Outposts directly into its core network to deliver ultra-low-latency edge compute capabilities from its primary data center in Carteret, NJ.
They are also starting small, with Nasdaq MRX
This is much less about moving NASDAQ (or other exchanges) to be fully owned/maintained by Amazon, and more about wanting to take advantage of development tooling and resources and services AWS provides, but within the confines of an owned/maintained data center. I'm sure as this partnership grows, racks and racks will be in Amazon's data centers too, but this is a hybrid approach.
I would also bet a significant amount of money that when NASDAQ does go full "cloud" (or hybrid, as it were), it won't be in the same US-east region co-mingling with the rest of the consumer web, but with its own redundant services and connections and networking stack.
NASDAQ wants to modernize its infrastructure but it absolutely doesn't want to offload it to a cloud provider. That's why it's a hybrid partnership.
Most financial institutions are implementing their own clouds, I can't think of any major one that is reliant on public cloud to the extent transactions would stop.
>Why hasn't the industry come up with an alternative?
You mean like building datacenters and hosting your own gear?