Banking is a technology business, writes Jonathan Schwartz, CEO Sun Microsystems quoting the CEO of a global financial services firm he recently met. Commenting on his blog post titled “Solaris on Wall Street – Faster and Faster,” about his company’s recent feat of breaking the million-messages-per-second barrier for the Reuters Market Data Systems – a platform widely used by Wall Street financial houses to aggregate data and complete trades- Schwartz says that financial services firms increasingly believe their business is more of technology oriented now.
“I remember a dinner I had a while back with the CEO of a global financial services firm. As one of his first acts as CEO, he’d cancelled an enormous outsourcing contract, and I’d asked him why – his response has stuck with me. Banking is a technology business. Pure and simple. I can’t win if I don’t have my own team,” said Jonathan Schwartz quoting the anonymous financial services firm CEO.
“I’ve heard the same point made by many (but not all) financial services executives – banking (like big swaths of telecommunications, media and retailing) has become a technology business, where every ounce of performance and differentiation matters,” Schwartz writes further.
This situation, he says, is a fitting backdrop for the recent achievement in which Sun in collaboration with Intel achieved a land speed record – a million messages per second, running the Reuters Market Data System on Solaris 10 for Intel silicon.
Financial analysts believe that this accomplishment will help financial companies reduce latency in algorithmic trading. It will also allow customers to better manage market data content in real-time across a trading environment. “Algorithmic trading continues to drive the quest for greater speed and lower latency in the capital markets sector with firms needing to re-architect their trading systems for low latency and high performance and with this new achievement, the financial organizations stand to benefit a lot,” said a Sun Microsystems press release.
Reuters Markets Data System is widely used to aggregate information, and algorithmic trading – popularly known as automated trading – is one reason market data has more reason to focus on latency. Wall Street’s financial institutions have become focused on boosting throughput and lowering latency in computer systems because successful trading is increasingly dependent on it in the competitive atmosphere where the network plays a critical role.
Sun competes with its Solaris operating system against Red Hat and Novell’s SUSE in this arena, said a report published in Network World Magazine.
“Financial institutions are now building or looking to build optimum infrastructures to support this step-change in performance and take advantage of the computing power that is now available, whilst still reducing power requirements and total cost of ownership,” said Ambreesh Khanna, CTO, Financial Services Group, Sun Microsystems. “Through partnerships with the world’s leading application vendors and innovators like Intel and Thomson Reuters, Sun enables firms to achieve low-latency, high-availability trading.”
Interestingly, Tervela a NY based provider of high-performance messaging systems, recently announced its Message Network can process over 10 million messages per second in a real-world test environment. Tervela’s fault -tolerant message switches can route every piece of US market data available – including all equities, derivatives, commodities and FX instruments – and send it out to over 1500 subscribers.
Tervela tests were performed at Advanced Micro Devices (AMD)’s Sunnyvale, California headquarters, representing the first time that vendor claims about message processing speeds and latency have been publicly demonstrated and validated using a large-scale environment consisting of over 100 high-performance servers to emulate realistic market loads.