Wombat Financial Software, the leading developer of high performance market data technology for the financial industry, today announced a next-generation market data middleware platform delivering the industry's lowest latency for trading room floors, electronic trading engines and distributed market data systems at the SIA Technology Management Conference, June 8 - 10 at the New York Hilton.
According to Ron Verstappen, president and CEO at Wombat, Wombat has entered into a joint development agreement with 29West Inc. to build the transport component of its next-generation market data platform using a blend of TCP and UDP messaging, combined with support for both server side and client-side conflation. Founded by Mark Mahowald, 29West is the Chicago-area software development group comprised of former engineers and executives from Talarian, which was acquired by TIBCO Software (NASDAQ:TIBX) in 2002.
"True, end-to-end latency has joined skyrocketing message rates and infrastructure cost containment as a leading issue in the market data industry today," said Verstappen. "But practical level issues, such as the big consumer/small consumer problem or delivering a rich array of market data-focused messaging are much more significant. A number of vendors are currently touting TCP-based solutions that 'headline' low latency. Actually, it's been relatively straightforward to achieve latency under 1 millisecond with a TCP connection to a single consumer. However, when we talk about a low-latency solution, we are referring to a solution that can deliver millisecond latency while meeting the needs of the whole trading floor."
He added, "The Wombat MDRV(tm) market data distribution platform based on TIBCO Software's TIB/Rendezvous product has been the fastest platform on the market for the last three years, with an average internal latency of 1 - 3 milliseconds. The new platform is the next evolutionary step. Its raw speed harnesses advances in hardware and messaging technology to provide a transport so fast as to kill latency as a competitive issue once and for all by reducing middleware latency to less than one millisecond in many cases. While it's impossible to achieve 'zero-latency', the Wombat system is so fast that the geographical distance from an exchange to an electronic trading application has become a more significant latency issue than the middleware."
The Wombat technology uses a flat architecture based on similar concepts to those underpinning its existing market data platforms. Advances in hardware and messaging technology are harnessed to eliminate the need for central servers, transport-level caches and separate daemon processes. Added Verstappen, "This architecture not only makes the solution exceedingly fast and simple, it also eliminates the need for extra copies of the data, bringing significant increases in throughput and makes the overall solution very CPU-efficient."
"The throughput will be phenomenal," said Todd Montgomery, principal software architect at 29West.
The new infrastructure solves the "big consumer/small consumer" problem, Verstappen said, by using a blend of TCP and UDP messaging, combined with support for both server side and client-side conflation. "The need for large, automated-trading systems to coexist with smaller applications and workstations is one of the biggest challenges facing today's market data systems."
In many cases these systems must be run in broadcast mode to satisfy the thirst of program trading engines, an approach that overwhelms traditional applications. "To date, we've solved this problem using cascading cache and bridge modules," said Verstappen. In the new system, support for this topography will be built directly into the transport layer.
The 29West high-speed transport layer is complemented by market data-focused messaging capability. According to Danny Moore, Wombat's global head of sales, marketing and development, "The new messaging API, which can also be used with other middleware transports, provides support for order books and historical data through the availability of advanced object and vector based messaging."
"When we began the design process 12 months ago, the reasoning behind building a transport product was purely commercial," said Moore. "It would make it possible for us to provide a complete solution without reliance on any third-party vendor. Moreover, many of our clients expressed concerns that the existing vendors did not provide a lot of 'bang for the buck', while employing very aggressive approaches to sales and licensing. Clearly, sections of the marketplace are very discontent with the current offerings."
He added, "However, during market research it became clear that products currently on the market would be unable to meet the needs of the trading floor over the next few years, and many people in the market data industry are concerned. Much of the core technology on offer was developed in the 1980s, but both hardware and customer requirements have evolved a long way since then. We saw a real opportunity to develop a product for the 21st century."
According to Mahowald, it is not that existing transports are slow. "Several function very well," said Mahowald. "29West people were key designers of some of the approaches still in use but these protocols are getting on in years. In the case of the daemon-based, multicast approaches, the base architecture dates back almost 20 years. As the networks and receiving machines have grown smarter and more powerful, there are many new innovative ideas that can be applied to create a faster messaging layer, which is what we've done. So it's not that the current approaches are slow, it is just that we will provide more flexibility with higher performance and a more customer-friendly business model."
The Wombat transport is currently undergoing beta testing with a New York-area customer. "The production system is scheduled to go live in July, said Verstappen. "Two more beta customers will begin testing over the summer."
The initial general release is scheduled for October 1 2004.