Oracle Gets Zippy with Financial Services

By Lisa Vaas  |  Posted 2005-06-10

Oracle Gets Zippy with Financial Services

What does Oracles intent to purchase zippy-quick TimesTen Inc., with its real-time, in-memory database technology, mean to you?

Plenty, if youre in the financial services industry, if youre looking for real-time access to data for logistics or high-speed transaction support, or if you happen to be the DBMS vendor that was once king of the financials—aka Sybase Inc.

First, a look at what Oracles acquisition says about the push for real-time data. Basically, it reflects the direction in which all the database companies are either heading or will be soon: the ability to provide real-time access to data, whether for BI (business intelligence) or high-speed transaction support.

This is motivated by a number of things. One source is the fire hose of information being spewed from RFID (radio frequency identification) technology.

"One of the things people talk about as a driver in, lets say, inventory management, is the whole RFID thing, and the idea that youll be able to track not just palettes as they come into the warehouse, but also item by item, and youll be able to capture that information so youll know where any item is at any point in time, and you can use this information to make highly intelligent, highly precise decisions about when to send things from, say, a regional warehouse to a store, or when to reorder, at a much more fine-grained level," said Carl Olofson, noted database expert and an analyst with IDC.

To do that, youre dealing with a blizzard of data. Other usages that would require high-speed data access include logistics: the movement of objects through a delivery system. With concerns over soaring gas prices, for example, the optimization of fleets has exploded in importance. With todays gas prices, you just dont want to send half-empty trucks.

And then theres the king of them all: financial services. According to Bob Iati, a partner with The Tabb Group, the past 18 months have seen a focus on volumes of data, data capacities and, probably most importantly, the ability to move data with no or low latency.

The driver in financial services has been, first and foremost, the advance and penetration of advanced electronic trading systems, Iati said. "Theres been considerable take-up in the last 18 months in program trading—black-box trading, generically, where computers are doing more trading than ever before," he said. "The more that technology and programs are relied upon to find and execute on opportunities, the faster the market moves. That has logically turned the focus to data."

Concurrent with that has been a terrific advance in volume over the last four years, caused by the move from a fractional pricing scheme to a decimal pricing scheme. Remember when securities were priced in 16ths of a dollar? The industry has gone to a penny. From 16 price points between dollars, we now have 100 price points.

Next Page: Lifting TimesTens hood.

Oracle Gets Zippy with Financial Services - Page 2

Thats had a domino effect in this business, Iati said. Its increased the activity and amount of information that has to be moved, based on activity that could happen at penny increments as opposed to 16th of a dollar increments.

To give you an idea of what kind of volume increase this translates to, Iati said that, over a period of six years, peak message rates in the industry have gone from 4,800 messages per second to 55,000 mps.

Obviously, given all these needs, database companies are eager to step in. Figuring out how to get data in and out of the system really, really fast isnt easy, however, Olofson said, given the constraints of a traditional database.

One technique used is to create a caching environment that can be used interactively with database clients, instead of being forced to go back to the full database itself.

Weve also seen approaches that involve clever uses of buffering to achieve these things, usually coupled with a partitioning scheme so you can manage data in buffers, thus ensuring that a given transactional query will be in memory.

What Makes TimesTen So Fast?

TimesTens approach is different from these. It uses main-memory database technology—as in, theres an actual database resident in main memory, not just a buffer or structured cache. Even TimesTens Cache product is still a database; its just that people use it as a cache, given that it has facilities that link it back to the database.

The fact that TimesTen is a full database, as opposed to an approach that utilizes cache, makes it a better solution, Olofson said. Specifically, it spools out its own log, which assists in data recovery.

"When people talk about main-memory databases, people have the concept that its just memory, so if the system goes down, everythings lost," he said. "Thats not true [with TimesTen]; it spools transactions out to logs. If it has a failure, it can recover from the log, [which] saves snapshots at intervals."

The distinguishing characteristic is that the TimesTen database doesnt have to go to the disk. A disk-based database is optimized around the rapidity with which you can randomly store and retrieve data to disk, with memory and instruction structure in the database kernel all organized around those issues.

Main-memory databases couldnt care less about that issue. With database in memory, theres no shuffling of stuff.

TimesTen claims to be able to move data 10 times faster than standard disk-based databases, even when the disk-based database has all its data in memory.

Next Page: The acquisition will change the competitive landscape.

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Olofson hasnt tested it, but he said it makes sense logically. "Database kernels, they revolve around this issue of the disk structure," he said. "You store indexes in one place, data in another, and youre constantly checking to see, Should I swap a buffer out? Should I load this other from the disk?"

Watch out, Sybase

So what does this mean for Oracle, competitively? It should, for one thing, raise its visibility in the financial services industry. Sybase has historically been very strong in that sector, with Sybase ASE being the database of record for managing portfolios.

Of course, financial services companies could continue to use TimesTen in a two-tier setup with Sybase ASE. Theres no compelling reason to switch, just because TimesTen is being acquired. After all, database migration is a horrific pain.

But, if financial services firms are looking to integrate what TimesTen is doing with what their back-end database is doing, and at a level of intimacy that can only be achieved by using TimesTen in conjunction with Oracle 10g, a migration might be tempting, Olofson said.

Another thing to note is that Oracle has already achieved a much better hold in the financial services sector than it had, say, 15 years ago, when Sybase owned the business, Iati said. With the addition of TimesTen, it picks up a nimble player whos been in this business for a while and thus has the potential to offset its reputation as a large and somewhat clunky company, he said.

At any rate, Sybase isnt sleeping. It recently released Sybase RAP (Risk Analytics Platform), a platform designed for supporting trading applications in the capital markets. The platform has three pieces that work together to feed trade data into user-selected models, one piece of which, Sybase IQ, is an analytical database that can store massive quantities of market data while enabling fast queries.

Whats next? Keep your eye on other small, real-time database players, like ANTS Software Inc. As Oracle has demonstrated, the big database companies are hungry, and they certainly wont let the small guys have all the fun.

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