Sifting SIFMA: Highlights and Lowdowns

This year's SIFMA show, while smaller than last year's event, had an air of optimism, and though foot traffic was light at times, one might well blame a large portion of that on the US and England football teams playing crucial first-round matches in the World Cup, which coincided with the show.

Taking advantage of America's seemingly new-found passion for the sport, those exhibitors willing to shamelessly tout the tournament were rewarded with a captive audience: Interactive Data showed the games in separate suites at the Hilton, while - in the absence of Davidsohn Global Technology's booth this year - the mantle of "bar on the floor" fell to Acquire Media, which attracted a crowd not only with its flat-screen TV showing football, but also with its willingness to break out the Maker's Mark.

In fact, the presence of liberal helpings of booze kept attendees hob-nobbing on the exhibition floor until the doors officially closed each night and the obligatory parties-also fewer in number, but no less spectacular-began. Here, too, a different air was in evidence: attendees seemed less cut-throat, more forgiving, and more willing to let their hair down and enjoy a laugh with colleagues and rivals alike (and even ride a mechanical bull at the IPC party!). Perhaps the best way to describe it would be the realization that "we're all in this together," and that it will take extra efforts from everyone to really pull through.

But parties aside, the show nevertheless held enough to captivate IT and market data professionals alike-and in today's low-latency markets, these roles are becoming more closely linked than ever before. While this year's show may not have produced "the next big thing," it did represent the acceptance of "next big things" of previous years into more mainstream use.

‘Hard' Times

For example, hardware-based data processing and messaging solutions have been on display for several years now, but for the most part have enjoyed only a limited takeup. However, the signs are that firms are becoming more familiar with the technologies, and more willing to use them to address ever-worsening challenges around latency and data volumes.

"The economy has changed, but the issue of volumes hasn't," says Jim O'Donnell, chairman and chief executive of hardware ticker plant vendor Exegy. "There are more trading venues than before [generating data], and volumes have not slowed, so we are seeing hardware becoming more accepted."

In fact, complex event processing software vendor StreamBase Systems announced two hardware-related developments at the show. One saw the vendor integrate Nvidia's Tesla range of graphics processing units to enable high-performance analysis of high volumes of data, for firms wanting to run analytics and test trading strategies against large amounts of historical and real-time data-something that specialist hardware components can handle more efficiently than software-based processes.

StreamBase's second announcement, integration between the vendor's CEP engine and hardware-based messaging provider Solace Systems' routers, is designed to deliver the latency benefits of hardware with the flexibility of software, while "no longer having to use custom silicon to get hardware-like levels of latency," says Richard Tibbetts, chief technology officer at StreamBase.

"As you get closer to the application space, it becomes slower to write code into hardware... so firms have to look closely at what to put onto hardware, because some functions may be more suited to software," says Larry Neumann, senior vice president of marketing at Solace Systems.

One of the barriers to takeup of hardware-based solutions has been the perceived higher cost than operating in software-mainly in terms of the resources required to code and re-code in silicon (even though several software and service providers spoken to by Inside Market Data said they are also considering hardware solutions to handle ever-increasing volumes at low latency). So exhibitors will no doubt be pleased to hear the results of a survey conducted by SIFMA and IBM, which predicts that technology budgets will increase, with large portions of those being spent on "transformational" projects, largely driven by risk-related analytical requirements, with increased demand for "disruptive" technologies.

These trends may play well to providers of specialist hardware solutions, but may also find favor with CEP vendors, who are adapting their solutions to spot new market opportunities and address areas such as risk and compliance, liquidity management and content aggregation.

Almost on cue, Progress Software's Apama CEP division unveiled a new version of its Capital Markets Foundation-the capital markets-specific layer of functions and applications that runs on its core CEP engine-that includes a new market data architecture for increased performance and flexibility, latency measurement functionality, and expanded analytics, including the potential to integrate with proprietary or leading third-party applications, and enabling firms to re-introduce risk measures that may previously have introduced unacceptable levels of latency. At the same time, Apama also announced that its FX Aggregation capabilities-another use of CEP software-are being rolled out by Spanish banking group Banco Bilbao Vizcaya Argentaria.

Germany Scores Data Goal

Meanwhile, much of the show remained obsessed with the need for speed and low-latency data and connectivity to power algorithmic trading engines. Deutsche Börse even took its AlphaFlash low-latency feed of macroeconomic news and events a step further, launching a display product that incorporates the same data as the feed, for traders who want to see the same key figures and signals that their trading systems are consuming, without the "distraction" of full stories and headlines.

The exchange has also made the AlphaFlash feed available from three London-based datacenters - Telehouse London Metro, City Lifeline and Equinix LD4 - to respond to demand from algorithmic traders in the city, bringing the number of datacenters where clients can access the feed to seven in the US and Europe, with the ultimate aim of expanding its datacenter presence further to make the feed available to clients whatever their global location, mirroring its expansion of content on the feed, which will soon also include economic events from Asia.

Also last week, network provider Hibernia Atlantic announced a deal to provide Deutsche Börse's IT arm with ultra-low-latency, high-capacity connectivity between Frankfurt and Chicago, using Hibernia's Global Financial Network. The next day, Hibernia announced that low-latency data vendor Activ Financial will use the same service to provide connectivity between Frankfurt and Chicago, to support trading using Activ's data in both locations.

Another firm seeking to capitalize on demand for low-latency connectivity is startup Spread Networks, which launched last week, headed by chief executive David Barksdale and a management team including former Netscape and AT&T Wireless CEO Jim Barksdale, former head of strategy and business development at NYSE Technologies Murray White, former director of network architecture, engineering and deployment at Level 3 Communications Michael Strickland, and one of the founding team behind the Radianz financial extranet, Brennan Carley. In addition to officially launching its services, Spread Networks announced it is using ADVA Optical Networking's FSP 3000 wavelength division multiplexing optical transport layer over Spread's own dark fiber to ensure roundtrip times between New York and Chicago of 13.33 milliseconds. Spread's management team also includes Timothy Goff, former vice president of customer service at ADVA.

Infrastructure Innovation

UK-based low-latency data provider Fixnetix increased the reach of its direct feed connectivity via a sales and interconnect partnership with network provider Verizon Business, to allow clients of the Verizon Financial Network to access on-demand data from the 55 markets supported by Fixnetix, via their existing connections to Verizon's network.

Chi-Tech (formerly Cicada), the technology arm of trading venue operator Chi-X Global, also expanded its reach, bringing its MarketPrizm connectivity network and managed infrastructure to North America to meet demand from the region, officials say, whereas the service had previously only been available in Europe.

However, in the spirit of the IBM report's prediction of increased use of "disruptive" technologies, several exhibitors - including Interactive Data, Quodd Financial Information Services and SIX Telekurs - teamed up with financial cloud computing service provider FlexiSphere to provide a different type of infrastructure: a "Vendor Mall" of on-demand data, research, analytics and other content, as well as providers of portfolio management, risk and trading services, delivered via a more efficient and cost-effective delivery model of using virtual private clouds between service providers and end-clients. While Xignite has operated an online "mall" of on-demand, end-of-day and historical data for several years, Flexisphere claims that its cloud will also provide real-time services and news in addition to fundamental and historical data. With many predicting a silver lining for cloud computing, could this be the next big thing for this year?

Ultimately, though, perhaps one of the biggest deals of this year's SIFMA show isn't who didn't exhibit, but rather who did. For upstairs in the ballroom stood a new booth, with welcoming logos, plenty of product pamphlets and documentation, and a team eager to demonstrate their wares on a number of screens. The vendor in question was Bloomberg, no less, while Thomson Reuters was again absent (with Interactive Data once more taking the coveted former Quotron booth). Whether it's a realization that every company must actively promote itself in this kind of economy, a sign that Bloomberg is indeed becoming-in every way, according to the vendor's presentation in the exhibition theater-more open, or just an effort to further consolidate its position and record 287,500 terminal positions, to see such a high-profile company coming on board SIFMA rather than exiting it, is an encouraging sign for next year.