Wall Street Adopts New Technology

By Darryl K. Taft  |  Posted 2004-05-01

Wall Street Adopts New Technology

When it comes to adopting leading-edge technology, Wall Street is among the first in line, despite the fact that other peoples money depends on the street. These days, Wall Street is moving on service-oriented architectures in Linux and grid computing environments.

UBS Investment Bank, for instance, is running grid computing in two categories. One is "specific grid for heavy-duty computing to streamline calculations and make them as fast as possible," said Sheppard Nakier, UBS chief architect, at the Linux on Wall Street Show & Conference here last week. UBS is also looking at grid computing for employing "fast and cheap processors" in clusters for handling various applications, Nakier said.

As financial services companies consolidate data centers and add computing power to process new, complex algorithms, IT managers are looking to cluster systems and componentized applications. SOAs offer the best way to do that, said Chris Keene, CEO of Persistence Software Inc. Financial services companies ought to "structure software systems as reusable services" or, in other words, move to SOAs and "distribute services to geographically dispersed customers," said Keene, whose San Mateo, Calif., company develops object data management solutions.Although not moving to a complete SOA environment, one foreign-exchange portal based here is working Web services into many of its applications. "We support Web services in general as a way of getting in and out of different systems," said Sean Gilman, chief technology officer at Currenex Inc., adding that the company has about 13 ongoing integration projects.

Gilman said Currenex is migrating from proprietary Sun Microsystems Inc. Unix boxes to Intel Corp.-based Hewlett-Packard Co. machines running Linux. Linux offers better performance and projected reliability, he said.

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Currenex does more than 2.5 million spot updates per day, Gilman said, "and were looking at doubling our volume." The foreign-exchange market does about $1 trillion in transactions per day, he added.

"The more time you have between the beginning and end of an execution, the more slippage you can have," Gilman said. "Matching orders can be extremely CPU-intensive, and this is why we brought in the Linux systems. We will keep the Sun systems to service our Web layer, where we will use them to push out static data, but were upgrading to Linux on HP and Red Hat [Inc.] for our ESP [executable streaming prices] systems."

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Wall Street Leads the


"Wall Street is always the first to adopt anything, and then it looks around at the rest of the country and says, Why is everybody following us?" said Sam Greenblatt, senior vice president and chief architect of the Linux Technology Group at Computer Associates International Inc., in Islandia, N.Y. "We believe service orientation absolutely plays well on Linux."

As part of its effort to support the development of modular applications and services, CA will join the Eclipse Foundation, which offers open-source development tools. "We will be announcing our joining of the Eclipse group, and we will do a complete application deployment model," Greenblatt said.

Greenblatt said that according to analyst estimates, the worldwide market for Linux will be $6 billion by 2006. In addition, he said, eight out of nine Wall Street companies are using Linux in production for key applications such as derivative processing, securities clearing, portfolio repricing and client retention.

Financial services companies are embracing Linux and grid computing because of the speed and power of the clustered technology that can be applied to market data, credit risk, trade management and anti-money-laundering applications, said John Vitkus, Linux executive for IBMs Financial Markets division, in Armonk, N.Y. IBM sells grid-enabled applications to various market sectors, including financial services.

"Virtualization and the utilization of technology is not anywhere near where it needs to be," Vitkus said. "And grid computing enables you to use more capacity than typically available today."

The demands of financial markets require enterprises to "increase the differentiation of the business model to react more quickly," said Guy Baker, director of strategic engineering at Veritas Software Corp., in Mountain View, Calif. "There are two things you can do: service-oriented architecture or outsource."

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