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March 1, 2000

Trading & Technology - Cleaning Up the IT Mess: Eliminating the Spaghetti Under the Boards

By Peter Chapman

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  • Trading & Technology - Cleaning Up the IT Mess: Eliminating the Spaghetti Under the Boards
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Asecurities trader who lifts the floorboards underneath his desk will find what looks like a big plate of spaghetti. All that wiring connects him to trading partners, electronic trading systems, market data vendors, and much more.

The trader might not give it a second thought, but it's a nightmare for his information technology (IT) support team.

IXnet, a small network company started in 1995, is preaching the benefits of replacing all that wiring with one wire - a wire created by IXnet. And over 600 financial firms are said to have plugged into this extranet created solely for the securities industry.

In freeing trading shops from the hassles of managing all those connections, IXnet also appears to be reinventing the concept of a network.

The New York company sees itself as an intelligent network. By embedding various pieces of sophisticated software into its transmission system and hosting' the software applications of others, the company hopes to convince the trading community that it is the most efficient, reliable and cost-effective way for them to send and receive information.

"In the past every time you wanted content you had to maintain a separate infrastructure," said IXnet Chief Executive David Walsh. "Each infrastructure was unique in terms of the technology and protocols deployed."

IXnet's solution is to become the AOL of the financial community. Everything the trader needs to do his job will come through one terminal on his desk and one pipe underneath. A click of the mouse will initiate a telephone call. Another click will access his trading system. Incoming data like news, quotes, charts and orders will all hit the desktop from a single source. Outbound messages such as trades, orders and e-mails will travel the same route.

It's futuristic stuff, to be sure, but the company maintains it took a big step forward last fall when it signed a deal with Reuters' TIBCO unit to embed its product TIB/Rendezvous into the network.

The software does two things. Its publish-and-subscribe' technology allows a trader to subscribe to all data relating to a particular stock as it becomes available, or is published.' That includes news, quotes, charts and orders.

Secondly, it also allows IXnet to provide its customers with what's known as reliable IP multicasting,' or an efficient way to send a single message to multiple users. "TIB/RV is a huge one," Walsh said. "It really does solve a lot of the issues that the industry is dealing with."

Customer Base

Walsh says a number of his customers are using the new TIB/RV service. The only account he divulges is Easdaq, the pan-European stock exchange for trading high tech IPOs. IXnet will connect Easdaq's 43 members to the Easdaq trading platform, TIBExchange, another TIBCO product.

The TIBCO deal is also making possible the second prong of IXnet's strategy - to become an application host. Much like a Web host on the Internet, IXnet plans to sponsor access to a company's software product via its servers. Hyperfeed Technologies, a second-tier market data supplier, is a good example. The Chicago-based distributor signed on with IXnet immediately after the TIBCO announcement to publish securities information, such as news and quotes, over IXnet's extranet.