ARMONK, NY, DEC - 14 Dec 2004: IBM today announced it is working with the New York Stock Exchange on a new order management and messaging system in support of the 1.6 billion shares traded daily. The system will be one of the world's most sophisticated examples of "Extreme Availability," relying on IBM computers, infrastructure software and engineering expertise for a network designed to virtually eliminate downtime.
Joint work on the new NYSE TradeWorks™ processing system is part of a long-standing and wide-ranging technology relationship between the world's largest equities market and the biggest information technology and services company.
The NYSE TradeWorks™ relationship was announced today by Roger Burkhardt, Chief Technology Officer, NYSE, and Steve Mills, Senior Vice President and Group Executive, IBM Software.
The Securities Industry Automation Corporation (SIAC), the Exchange's technology partner that develops and operates its computer and communications networks, chose IBM to lay the infrastructure for TradeWorks, NYSE's new Order Management System for processing brokers' buy and sell orders on the trading floor.
NYSE is also moving to the next generation of its order processing system through the purchase of 3,000 handheld devices -- custom-designed by IBM Engineering & Technology Services -- that brokers on the trading floor will use to link to a wireless network where they buy and sell orders. IBM's WebSphere infrastructure software, DB2 data management software and Tivoli management software will act as the back-end engine room for TradeWorks, processing and choreographing the huge flow of transactions with ultra-high reliability. The DB2 backend will run on IBM mainframe running zOS.
In addition to the handhelds, IBM is supplying custom-built Linux-based workstations optimized for high-resolution graphics, low power and redundant connectivity. Traders, brokers and clerks use these workstations to relay real-time market intelligence from the Exchange floor to upstairs trading desks.
The IBM-NYSE work on the new TradeWorks infrastructure includes what is believed to be the most extensive testing ever done for a Java-based application environment.
While reliability is important to every company, NYSE is among the handful of organizations that require uninterrupted availability -- as close to 100 percent as possible. The NYSE is the world's largest and most prestigious stock exchange, with 2,750 companies listed and a total market capitalization of more than $17.8 trillion. Since 2002, the average number of shares traded has risen from approximately 1 billion a day to 1.6 billion. Today, brokers collectively send and receive an average of 75,000 messages a day -- up 200 percent in the last two years.
The Exchange wanted to ensure the highest reliability possible -- anticipating the unlikely but inevitable hardware software failures and other unpredictable factors such as a sudden spikes in trade activity -- while also aiming for sub-second response times for users of the system.
After inviting several vendors to participate in exhaustive proof-of-concept tests, SIAC selected IBM's WebSphere, DB2 and Tivoli software as the server-based "heavy lifting" software for TradeWorks. IBM WebSphere is the market-leading Internet infrastructure software and will serve as the all-important "middleware" for running and managing TradeWorks, while DB2 will act as the database for storing NYSE transactions valued at $14 billion per day -- for broker initiated trades. Tivoli is the market leader in infrastructure management software.
A team of more than 50 IBM researchers, software designers and financial industry experts from around the world has been working with the Exchange on custom technologies, advanced engineering methods and ultra-rigorous testing procedures aimed at helping establish NYSE as a state-of-the-art example of "extreme availability."
Some of the pioneering technologies and processes emerging from the NYSE project are expected to spill into IBM's work with other customers with similar requirements and commercialized in IBM's software products.
"While the stock market can be unpredictable, the technology running it can't be," said Mills, the IBM Software chief. "Any service outage can cause serious disruptions and unrest in financial markets around the world. We're delighted that the Exchange decided IBM middleware could best meet its stringent performance and reliability requirements, and that the work we're doing together will end up benefiting the financial services industry at large and other industries."
"TradeWorks speeds and enriches the flow of information between the trading floor and the end customer, which is crucial in today's fast-paced trading environment," said NYSE Chief Technology Officer Burkhardt. "To make it happen, we needed a brand new infrastructure with greater scalability and extreme availability. We also needed the flexibility that comes from proven, standards-based technology so we can more quickly and easily introduce tech upgrades and changes in the future."
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