The report, which questioned end-users and management at trading operations, says expenditure on applications has risen 10% year on year and now accounts for around one third of the annual trading technology spend, exceeding expenditure on data services which accounts for around 30% of the annual trading technology budget.

Kimsey says the UK market for trading technology includes around 740 trading operations and 36,000 trading positions on the sell-side, and is the largest country market for trading technology outside of the US.

Of the total expenditure on trading technology by firms in the UK, 32% is spent on trading applications, 29% is spent on market data, 14% on telecoms, 11% on hardware, while 14% is spent on other systems.

According to the research the market data segment is still dominated by Bloomberg and Reuters, although third place Thomson Financial is shown as having an increasing presence, as are information providers such as Proquote, Comstock, CQG and the likes of GL Trade and EBS.

In the £1 billion pa applications sector, SunGard's Front Arena subsidiary achieved the highest customer satisfaction rating in the trading and risk management segment.

The survey found that in the UK trading turret sector, BT and IPC are the dominant vendors. The research also shows that there is increasing acceptance of voice over IP, with more than 70% of those interviewed regarding VoIP as being suitable for the trading environment.

E-trading continues to take an increasing share of trading transaction volumes and is estimated to have grown around 10% over the past year. But Kimsey says voice trading continues to playing an important role, with just under half of survey respondents saying that voice trading levels are either the same or marginally ahead of 2005.

Although Microsoft continues to be the defacto standard for the trading desktop, alternative operating systems such as Linux were used to some extent by around 40% of firms surveyed.