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Linux Rising in Financial Firms; But Some Users Wonder Why

Points of View Matter

  • April 27, 2006
  • By Jacqueline Emigh

Among early adopters of Linux, Wall Street looms as tall as its skycrapers. But why are some financial services firms starting to take giant steps into Linux, and what stands in the way of even bigger penetration? At this week's Linux on Wall Street show in New York City, participants gave often opposing views on these and related issues, including the question of whether Wall Street gives back to the open source community as much as it gets.

In both formal presentations and casual conversations, few disputed Wall Street's role as a major force behind open source deployments. Yet some financial IT folks admitted to lingering doubts about the overall value of Linux to their organizations.

"Lots of financial services companies are switching now from Solaris on SPARC to Linux on PC grids," said Nicolas Pintart, RMDS product manager at Reuters, an entity that used this week's show as the forum for unveiling a deal with HP and Novell.

Pintart attributed the rise in Linux to increasing fascination among algorithmic Wall Street traders with ultra high-speed "low latency" data feeds.

"PC-based Solaris is also doing well with our customers, but Solaris on SPARC isn't. PC grids run much faster than SPARC," contended the product manager, speaking with LinuxPlanet at an HP-sponsored event at the show.

During an ad hoc interview elsewhere at the conference, a Dutch systems integrator maintained that Wall Street is embracing Linux a lot more quickly than the European financial community is doing.

"Europe isn't 'behind' the US in implementations, though," according to the integrator. "It is just waiting."

And what is Europe waiting for? "It's waiting for the right underlying infrastructure to be available," he responded.

In roundtables at the show, vendors talked up other benefits, including the lower costs of Linux and the ability to tweak applications easily via open source code.

Stephen Jenvey, an associate at Fidelity Ventures, said that some firms capitalize on Linux by using the OS mainly as a platform for quick development of initial code for new software programs.

But during the same session, an attendee took the mike to ask the panelists, "What's in it for us to use Linux?"

As deployment barriers, the audience member cited problems he perceives around patent issues and desktop Linux.

Panelists responded that the impact of Linux patents on user organizations is almost nonexistent so far--and, further, that licensing issues for commercial software are just as confusing to users as Linux patents.

Carl Drisko, Linux and open source principal at Novell, pointed to his company's recent announcements at Novell's Brainshare conference as indicating that the industry recognizes the need for better user interfaces.

But the attendee who asked the question, an IT administrator who asked not to be identified in print, didn't walk away satisfied by these answers.

"I still don't understand what's 'in it' for the financial services industry to use Linux," he later told LinuxPlanet.

Even within financial services, users' perceptions of Linux advantages appear to hinge heavily on their own roles within the organization, conjectured James Grady of Code4Design, during an IBM-sponsored event at the show.

"Desktop Linux might be hampered by a 'geek factor,'" according to Grady. "A lot of people seem to think that you have to be 'really technical' to use Linux," he elaborated.

Grady added that his company is also striving to overcome these kinds of fears with its offering, which adds a user friendly front end to a hosted Apache Web server environment..

According to Grady, IBM helped Code4Design to port its environment from PC Linux to Linux on zSeries just in time for the Wall Street on Linux conference.

Meanwhile, back at the roundtable, speakers also took up the topic of the relationship between Wall Street and the open source community.

According to Shaun Connolly, VP of product management for JBoss, Wall Street firms have already shown themselves capable of working together to build open source components commonly needed in financial services.

Wall Street has helped considerably to drive both the SourceID and the Federated Identity Stack projects, he told the audience.

"But the difference is in when the code is specific to you," Drisko interjected. For custom applications, Wall Street firms are not ever likely to give up their code to the community, according to the Novell exec.

"Why? Because of all the competition on Wall Street. The companies need to make money," Drisko told LinuxPlanet afterward.

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