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Linux Gains Ground in Wall Street Nooks, Crannies
Looking For Linux
June 23, 2006
Behind the scenes on Wall Street, who is really using Linux? Although developers remain the major practitioners, Linux is also making headway these days as a grid platform for transaction processing, a place for running algorithmic trading engines, and even as a desktop environment, according to participants in this week's SIA (Securities Industry Association) conference in New York City.
But showgoers also admitted to lingering obstacles for Linux ranging from the cost of service fees to interoperability issues, both across distributions and between Linux and other OS.
Among many user organizations, Linux is getting a big boost right now from emerging environments for faster development, said Daniel Chait, a partner at Lab49, Inc., in one of a series of interviews with LinuxPlanet at the show in Manhattan.
Meanwhile, one of Lab49's customers, a major bank, has just implemented 100 seats of desktop Linux, said Luke Flemmer, Lab49's managing director.
Current Linux implementations at Bear Stearns & Co. Inc. include a grid system, said Peter Richards, chief technology officer and senior managing director for the wholesale bank.
And Bear Stearns is hardly alone in deploying grids on Linux, particularly within the industry category of larger banks, contended Bharath Rangarajan. senior product marketing manager at Gemstone, maker of an enterprise data fabric (EDF) software suite for data delivery across a grid.
Financial services firms are also installing grids based on Microsoft Windows, and on Sun Solaris and other flavors of Unix, show attendees agreed.
As one major driver behind the movement to grids, showgoers mentioned hardware limitations--including cooling and power issues--now impacting the scalability of clusters.
Some grids are being built from scratch, with the use of open source Linux components. In other situations, grid ingredients--based on Windows, Linux, or other Unix OS--are being purchased as commercial products from IT vendors, Richards said.
But Gemstone's Rangarajan attributed much of his company's success to a rising interest in Linux grids among the bigger firms.
Yet participants in the financial conference were also quick to point out the limitations of both Linux and grid technologies, from their own perspectives.
R. Scott Strait, chief technology officer at Charles Schwab, voiced disenchantment over a Linux grid installed by another vendor.
Instead of enhancing the broker's data center operations, the grid only "brought more complexity," Strait told LinuxPlanet.
"It introduced another (OS) variant," the CTO said about the grid. "(So) we ripped it out."
Some vendors at the conference cited future server virtualization and new industry standards as eventual remedies for interoperability woes.
But an official for a smaller financial house maintained that a lot of potential customers for grids simply aren't ready for grids.
Many firms need time to "catch up to" the available technology, according to the official.
On the other hand, Bear Stearns' Richards maintained that, despite the availability of free software, Linux-based grids aren't necessarily less costly than grids based on other OS, when contracts for maintenance and other services get factored into the equation.
The Bear Stearns CTO also pointed out that banks will need to re-write legacy applications to run successfully in both distributed grid and multi-OS virtualized environments.
On the whole, financial firms are famous for being early adopters of new technologies, as well as for developing many of their own applications and other systems inhouse.
Across the industry, companies are also running algorithmic trading systems on Linux, as well as on Windows, Solaris, and other OSes, noted Ragha Iyer, co-founder and president of the consulting company Solutions Foundry, Inc.
Some of these trading systems are proprietary, whereas others are purchased from specialized software vendors as commercial products.
Desktop Linux is also enjoying increased use, although mostly among developers, according to Lab49's Flemmer.
In fact, Flemmer predicted that, thoughout financial services, developers will remain the primary users of desktop Linux for the foreseeable future, due to the difficulties posed by mass migration from Windows.
Migration issues are particularly significant in the financial world, Flemmer said. Microsoft Excel spreadsheets are nearly ubiquitous on Wall Street desktops. Moreover, financial firms don't wish to do anything that might "interrupt the workflows" of highly paid employees such as financial traders.
But the showgoers in Manhattan also cited bright spots on the horizon for Linux in financial services.
Flemmer named Python and Subversion as a couple of emerging development environments that offer faster application development than C++ through use of an open source-oriented, collaborative model.
In addition, Lab49's Chait suggested that Mono now offers increased promise as a development environment, due to improvements made by the open source community over the past year.
About a year ago, Lab49 released the results of initial work with a global financial services around creating a simplified Web interface to complement a thick client application previously built by Lab49 in C#.
The bank wanted the Web application to take advantage of the business logic already created, without using "Windows servers of any kind, for any reason," according to Chait.
In the early phases, the developers ran into problems with Mono around reusing date parsing/formatting, string manipulation, and database queries.
But the recently released Mono 2 has alleviated a lot of these difficulties, the Lab49 partner told LinuxPlanet.
Others at the SIA show proposed alternative approaches to making financial software more usable.
According to Julio Gomez of Keystone Strategies, Inc., most financial firms seem to be missing the boat on opportunities to turn software applications into job recruitment mechanisms.
In reviewing the Web sites of firms in the industry Gomez came across only one firm that promoted its internal software environment as a "perq" to trading reps for accepting employment at the firm
Gomez isn't honing in on any particular operating system. But the industry consultant's research does tend to shine a light on the intricacies surrounding Wall Street job functions such as risk analysis and on-the-spot trading decisions.