Linux Comes to Wall Street

Financial services sector adoption spawns growth.

Long relegated to menial file and print server duties in most enterprises, Linux is now playing a mission-critical role in financial trading and other highly sensitive networks on Wall Street. The traction in the financial sector is part of broader Linux adoption growth, which is expected to continue through this year and next, according to Deborah Williams, an analyst at IDC, in Framingham, Mass.

"On Wall Street, time is money, and for 2005 the buzzword is going to be latency. If you can speed things up and address that latency, you can make more money," Williams said.

The growth in Linux usage on Wall Street, which is often on the leading edge of adoption, speaks to Linuxs technological growth and maturity, open-source advocates and network managers said at the Linux on Wall Street conference here last week.

A prime example of Linuxs emergence on Wall Street is Brown Brothers Harriman & Co., which two years ago began a shift toward Linux. Before the move began, Brown Brothers supported several operating systems, including z/OS, OS/400, Unix and Windows. The company added servers rapidly throughout 2003, putting stress on its data center operation and sparking cost containment, security and stability problems.

"So, in the first half of 2003, pockets of Linux on x86 hardware found their way into our business, starting as proxy servers, DNS [Domain Name System] servers, some Web servers, a firewall manager and an Internet gateway," said Jeff Teisch, senior vice president in charge of infrastructure at Brown Brothers.

In the second half of 2003, the company talked to IBM about buying another mainframe; installed the first two IFL (Integrated Facility for Linux) on z/Series systems; tested WebSphere, Oracle, Universal Database, AFS (Andrew File System) and more Web servers; and set up test environments.

"The benefits have been cost avoidance of about 85 servers. Stability and security were also addressed, and we were able to utilize our in-house skill sets, from z/OS, Unix/NT and storage," Teisch said.

State Street Corp. also turned to Linux recently to help solve legacy issues with its Microsoft Corp.-based architecture, said Shekhar Pannala, senior vice president of new technology development.

"There were scalability issues with SQL Server and challenges with data integration, while the support of applications was a challenge. Our architecture is also database-heavy, with close to 200 stored procedures," Pannala said.

After carefully reviewing all its database options, State Street, which is based here, chose IBMs DB2 database for its scalability and ease of data integration, along with Linux, which IBM has committed to as the platform of choice for DB2.

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"The next project for us was grid computing and Linux, with the goal of improving the processing capabilities of our fixed-income analytics platform. The Bond Analytics Proof of Concept improved the processing time for our Bond Analytics application by 1,903 percent," Pannala said.

State Street hopes to use Linux for J2EE (Java 2 Platform, Enterprise Edition)-based applications and convert its Internet Information Services solutions to a J2EE Linux-based solution using WebSphere and software from Macromedia Inc.

Linux grows in the financial services sector

  • NYSE developing TradeWorks on Linux, a new order management and messaging system in support of the 1.6 billion shares traded daily
  • Dresdner Kleinwort Wasserstein runs its portfolio risk management on Linux, using 80 Intel-based xSeries 4000R servers deployed in Linux clusters
  • Brown Brothers Harriman runs WebSphere on its IBM database
  • State Street runs IBMs DB2 on Linux