HyperFeed Merges, Unveils First Hardware Ticker Plant

Chicago-based ticker plant vendor HyperFeed Technologies last week announced that it is to merge with St. Louis-based technology provider Exegy, Inc. and unveiled their first collaboration: a high-throughput, low-latency hardware-based ticker plant.

The new company will take the Exegy name, and HyperFeed will become the financial services division of Exegy, which will continue to focus on other markets as well. Paul Pluschkell, chief executive of HyperFeed, becomes CEO of the new company, while James O'Donnell, current CEO of Exegy, becomes chairman. The deal—which is contingent on conditions, including each raising $5 million in funding prior to completion—is expected to close at the end of July.

According to officials, the two companies decided to merge because HyperFeed was looking to license technology to improve its HTPX ticker plant, while Exegy had the technology and wanted to break into financial services.

"We had the technology platform and were looking for verticals that had common features—difficulty keeping up with data rates and the need to analyze data at low latencies," says O'Donnell. "HyperFeed's ticker plant was struggling with the volume of data. We needed their domain experience and reputation, and our technology increases the capacity of their ticker plant."

"We were putting lots of money into development, but not into research and development," Pluschkell acknowledges. "We were continually upgrading our technology."

The resultant product, dubbed Exelerate TP, is a ticker plant in a box—quite literally—constructed from hardware components and governed by a small amount of software to dictate business rules for market-specific uses, rather than being entirely coded form software.

Exegy's rationale is that while software alone increasingly struggles to keep pace with rising data volumes, Moore's law dictates that compute power doubles every 18 months—potentially giving Exegy the ability to handle more data than its competitors and outstrip the rising tide of data. "As speeds increase, the speed of our ticker plant will increase alongside that—you just put in a new chip and it runs faster," O'Donnell says.

The vendor is claiming that Exelerate TP will be able to handle more than one million messages per second with a latency of only 150 microseconds, compared with around 250,000 messages per second only months ago. In addition, it will be able to calculate derived values, such as implied volatilities and volume-weighted average price, without latency increases. "Asking software to do those calculations always comes with a time hit—and a lot of those were taken out of the process in order to get low latency," O'Donnell says.

"Our ticker plant is currently running at less than 50 percent capacity," he adds, and new PCI message bus technology already being beta-tested in Exegy's labs should further increase capacity by between two and four times. "We think throughput will increase and latency will drop dramatically in the next six months to one year," he says.

Exelerate TP will replace HTPX in the fall after an early access program this summer in which existing customers can run the new system in parallel. The appliance uses the same feeds, message bus and APIs as the software-based HTPX.

If Exelerate TP delivers on its promise, it should silence the critics who have bemoaned HyperFeed in recent years as slow and outdated. However, some still express skepticism while supporting the principle behind the strategy.

"You still need software to make it work… and if the software's no good, what have you got?" says one observer. "Hardware/software is definitely going to happen, and these guys are trying to get ahead of that curve."

"This is more of a firmware solution," says another, referring to combinations of hardware and software. "And firmware is definitely the way to go."