A.B. Watley Case Study:
Consolidation of online stock trading system from NT to Sun Netra
and Enterprise servers and Sun StorEdge T3 arrays
"Our new technology has allowed Watley to compete in an entirely new
industry. A large part of our success in the B2B financial services
software licensing business is due to the quality of our software
and our migration from NT to a UNIX ™ platform with Sun's Solaris ™ Operating
Environment. Our UNIX platform and enterprise architecture clearly
differentiate us o the large brokerage firms and banks to which we
market our data delivery and transaction software."
Tony Huston,
Founding Partner and President
A.B.Watley Group Inc.
Company
Industry/Market
- Computing/Information Technology
Key Solution Requirements
- Migration from NT to UNIX ™ environment without disruption to ongoing production operations
- High performance - approximately one second for execution of each online trade order
- Future-proofed, standards-based IT environment for current and emerging client architectures
Key Solution Components
- Sun ™ Computing Platform:
- Sun Enterprise ™ servers
- Sun Netra ™ servers
- Solaris ™ Operating Environment
- Sun StorEdge ™ mass storage solution
- Java ™ development environment
- Oracle8i database
- Objectivity/DB object database
- BEA Tuxedo transaction management and routing software
- A.B.Watley 100%pure Java client-side applications
- Sun Professional Services Java technology expertise
Key Solution Benefits
- Cost savings through server consolidation and related service and support resource reduction
- Streaming quotes data and realtime direct trade execution as market differentiator
- A future-proofed open,scalable, reliable,high-performance and available computing environment
- Industry recognition of the quality and performance of the A.B.Watley technology,e.g.,licensing by E*TRADE
About A.B.Watley Group Inc.
A.B.Watley Group,(www.abwg.com),premier provider of financial services
technology,was founded in 1996 and is the parent of A.B. Watley Inc.,a
highly respected Wall Street broker/dealer firm with more than 40
years institutional trading experience. The Group was established
to provide the technology foundation needed to sustain the firm's
success in the new economy and to provide Internet-based service delivery
to traders and investors.
A.B.Watley Inc.'s mission is to provide the highest quality trading
technology and service in the industry at the lowest possible cost.
As the brokerage services arm of the organization,it uses the Internet
as well as traditional delivery channels to provide traders and investors
with remote,easy and very low cost access to technology as well as
the firm's more than 40 years trading experience. It does this through
the technological expertise and resources of AB Watley Group Inc.
Recently,A.B.Watley Group faced the need to make critical strategic
decisions regarding the future direction and platform for its IT operations.
This report defines those decisions and the subsequent actions taken
by AB Watley Group to migrate from a Windows NT environment to a Sun
™ platform with the Solaris ™ Operating Environment and Java technology
applications.
Strategic IT Direction Decisions by A.B.Watley Group
As is reviewed below,the former IT environment at A.B.Watley Group
was built on an NT platform using a large and constantly growing number
of servers to support a rapidly expanding customer base. A major decision
was made to replace the NT environment with a UNIX ™ platform while
continuing to provide Watley online customers with the same features,functions
and service levels they were accustomed to receiving from A.B.Watley.
The Former IT Environment
The former IT environment established by the Group used a Windows
NT platform. The number of installed NT servers grew rapidly as the
customer base increased. There were over 200 NT servers in place when
the UltimateTrader client- base reached 5,000 and the number of users
for other Web-based services also grew to about 2,000 online clients.
With the continuing need to add more servers and more copies of the
NT operating system as the client base grew,the complexity and costs
of system administration and management increased significantly.
An overview of the former IT environment at AB Watley Group is shown
in Figure 1.
Limitations of the Former IT Environment
According to A.B.Watley Group executives,the
key shortcomings of the former IT environment
can be summarized as follows:.
- Each NT server was capable of supporting only about 50 online
clients. This limitation, coupled with a maximum manageable server
population of about 200 NT servers for the AB Watley data center,yielded
a total solution capacity of only 10,000 online customers. In
basic terms,the former IT environment lacked vertical scalability.
- As the number of servers interconnected
at the data center continued to increase,the
resource requirements for administration and
management grew rapidly and operations
became increasingly complex - introducing
concerns with respect to reliability,availability
and total system performance.
- Along with the growth of resource requirements for administration
and management, the costs for service and support were growing
at an accelerated rate. Adding new features across a server population
of 200 units that had been installed and upgraded over a period
of time was not a simple matter,and proved a costly process in
terms of time and manpower.
- And finally,it was found to be completely
impractical to design and implement a remote
backup data center for the 200-server NT
environment.
Key IT Strategic Decisions by A.B.Watley Group
A.B.Watley Group was faced with a rapidly expanding customer base
- projected to exceed 25,000 online customers in the near term - and
with an IT environment capable of supporting only about 10,000 clients.
New CIO Leon Ferguson led a team of A.B.Watley technology managers
in making a number of carefully considered strategic decisions to
meet this challenge.
- The IT environment would be migrated from an NT to a UNIX platform.
The UNIX operating system is the choice for most enterprise solutions in the securities industry. It offers a wider range of systems
tools and functions,runs on a much broader range of servers (including
high end data center class servers),and is supported by a much
larger population of software development specialists. The decision
to move to UNIX would allow for significant server consolidation
and assure the needed vertical scalability for the rapidly growing
customer base.
- A.B.Watley Group considered several UNIX system alternatives
and Sun's Solaris ™ Operating Environment was chosen as the best
fit for its needs. Solaris is widely used in the securities industry
and is the UNIX system version regarded by many as the most suitable
for Web-based solutions. The Solaris Operating Environment runs
equally well across the full range of Sun servers,supporting the
scalability goals of AB Watley Group.
- A Sun computing platform,comprised of about 20 Sun Enterprise ™ and Sun Netra
™ servers along with Sun StorEdge ™ mass storage devices was selected
to displace the former IT environment completely. Together with
the Solaris Operating Environment,the Sun equipment would give
A.B.Watley Group a proven computing platform that would meet its
need for reliability,availability,scalability and high performance.
- Rather than porting the old software to the new platform,it was decided by
the A.B.Watley Group planning team that the software would be
"redeveloped using new technologies and tools to" future-proof
the new environment to the maximum practicable extent. There
also were practical business reasons for this decision - much
of the existing business logic was found in licensed third party
applications software that could not be easily ported to the new
environment.
- Java ™ technology was chosen as the foundation for the redevelopment
effort. Although Java technology was relatively new at the time
of the decision,the A.B.Watley Group's planners were confident
that it offered all of the attributes essential to the long-term
success of their growing operation:object-oriented,platform independent
(especially critical for A.B.Watley at the client end),a powerful
and growing set of development tools and aids,wide acceptance
for Internet-based and other network- based solutions,and a growing
population of Java development specialists. In addition, the position
of Sun Microsystems and the originator and a leading supporter
of Java technology matched well with the overall plans for the
future.
Business Guidelines for the NT-to- Sun Platform Migration Project
Along with the above listed strategic IT decisions, some key business
guidelines were defined for the redevelopment and migration project:
- Support real-time access for trade order execution,with a performance target of one second
from order entry to order execution for UltimateTrader customers, basically a require
ment for direct access to an exchange,an ECN
or NASD Market Maker.
- Assure support for existing Watley products such
as UltimateTrader and WatleyTrader without any
service disruption or need for changes at the
customer level.
- Assure that the IT environment can grow
with the market,without need to modify the
underlying infrastructure and without creating
an escalating expense structure, basically a
requirement for seamless scalability.
- Assure that the solution can adapt readily to
industry changes such as decimalization and
penny increment price presentations,T+0 settle
ment and worldwide 24-hour trading, around
the clock and around the globe.
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"We found it necessary to redevelop the complete solution
using new technologies for a new computing platform while
providing our customers with the same high levels of functionality
and service they were accustomed to receiving. We also added
new features such as decimalization that were demanded by
the market. It was a daunting challenge - but in retrospect
we can now look back and say that our plans were good ones,our
choices of technologies and technology suppliers were solid, the
redevelopment and transition proceeded smoothly and we and
our customers are satisfied that we have met the challenge."
Leon Ferguson,CIO
A.B.Watley Group Inc.
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The A.B.Watley Decision-Making Process
The decisions made by A.B.Watley Group were not simply mandates by
senior management and the new CIO but resulted from a highly interactive
and on-going process in which both business and technical managers
and team players at all levels were active participants. As is illustrated
in Figure 2,the technical decisions involved participation by players
at the levels where a decision would be realized. Two key examples
illustrate this:
- The decision to move from NT to a UNIX system was made by the
CIO after evaluation of all alternatives and consideration of
the views of other members of the technical staff. The choice
of which version of UNIX system and the computing platform on
which it would run was made at the level where the work and production
operations would be done.
- The decision to use Java technology for redevelopment of application
software rather than C++ or another object-oriented language resulted
from proof-of-concept tests suggested and performed by the technical
supervisors responsible for the work. Those tests showed conclu
sively that Java was the better choice,especially for assuring
that the GUI would meet all of the needs and expectations of A.B.Watley
customers. The tests also alleviated Java performance concerns
expressed by some.
The Redevelopment and Migration Processes
The redevelopment and migration processes,once all major decisions
were made,were comprised of three parallel but interrelated activities:
acquire and install the Sun computing platform, redevelop the existing
client-end software functions using Java technology,and support
parallel production operations in which customer services are gradually
transferred from the former IT environment to the new Sun,UNIX and
Java platform. Figure 3 provides an overview of the redevelopment
and migration processes.
The New Computing Platform
The Sun platform,comprised of Sun Netra ™ and Sun Enterprise ™ servers,the
Solaris Operating Environment and a Sun StorEdge mass storage system,was
defined,acquired and installed during the latter part of 1999 and
early months of 2000. The process went smoothly and the new environment
quickly became the development and test environment for software
redevelopment. Later in the migration process,separate computing
platforms were established for development and for parallel production
operations as customer functions were gradually transferred from
the former IT environment. And even later, an identical production
facility was established to share production operations and to provide
mutual backup for both centers. One production center,as well as
the development system,is at the A.B.Watley Group facility in Texas
and the other in Manhattan,New York.
In addition to the Sun components,all versions of the new computing
environment include key infrastructure software components from
three other leading technology providers:
- Oracle Corporation. Oracle Corporation,the global leader
in database software,(www.oracle.com), was selected by Watley
to replace the Microsoft SQL Server RDBMS used in the former IT
environment. The Watley quotes system now runs with an Oracle8i
database. The Oracle8i database was chosen on the basis of its
scalability and excellent performance on the Sun Enterprise servers
with the Solaris Operating Environment. The Oracle Application
Server also is used in conjunction with the quotes system.
- Objectivity Inc. Objectivity,Inc.,headquartered in Mountain
View,CA,(www.objectivity.com),is a leading provider of distributed
object data-base software products and support services. Watley
selected the Objectivity/dB product for the transaction-processing
component of its new solution. Objectivity/dB provides a robust,
scalable and multithreaded database engine with a rich set of
development and administration tools. It provides excellent
performance with the Solaris Operating Environment,whose multithreading
features are among the most powerful in the UNIX world.
- BEA Systems,Inc. BEA Tuxedo is a market-leading applications
integration and management product of BEA Systems,Inc.,San Jose,CA. Watley selected it to route customer requests
for quotes,transactions and charts to available servers - and to
assure the fastest possible response times for critical interactions
with Watley customers.
(Note:A detailed description of the new computing environment and
the key solution components supplied by Sun Microsystems and other
technology providers is available in a separate Sun- sponsored case
study report,A.B.Watley Group, Inc.,Internet Real-time Trading Solution.)
Software Redevelopment with Java Technology
The online brokerage services provided by AB Watley are client-intensive
with the greatest focus on efficient and high-speed acceptance,checking
and routing of incoming requests to backend internal Watley and external
processors along with the rapid routing of responses to clients. The
Solaris Operating Environment,BEA Tuxedo transaction management
and routing software along with the Oracle and Objectivity databases
provide the infrastructure between client applications and backend
processing systems. The key software redevelopment effort was to design
and develop a comprehensive set of front-end client applications for
the A.B.Watley UltimateTrader offering to Internet-based customers
as well as for A.B.Watley dealers with direct access to the new solution
from workstations connected to the A.B.Watley corporate intranet.
Java technology was selected for all application software development.
The software redevelopment effort extended over a period of more
than 18 months using a series of Java development environments,tools
and aids.
- Visual Café,then a product of Symantec Corporation and since
early 2000 a product of WebGain,Inc.,was chosen by A.B.Watley
Group as the basic Java development environment. The new applications
were designed to provide essentially the same functionality as
that already in use on the NT platform. Coding was done with a
combination of in-house software specialists and third party
contractors. One of the plus factors for Java noted by A.B.Watley
is that there is an excellent population of Java development
specialists available in the skilled labor market.
- Over the course of the redevelopment,and as Java technology gained rapid acceptance
in financial services organizations along with receiving much
development support by Sun Microsystems and other technology leaders,
a growing number of increasingly efficient Java development tools
and aids became available. Like all new technologies,Java technology
is a dynamic work-in-progress that is continuing to become more
powerful and effective as it gains market acceptance. Examples
of the Java development environments,tools and aids used by the
A.B.Watley Group software redevelopment teams include:
| – |
Java 2 Platform Standard Edition,Version
1.2.J2SE ™ v 1.2 software was used as the applications
integration environment during much of the early development
effort. It represented a major advance from Java 1 tech
nology and proved an excellent choice for the redevelopment
of most client applications for Web-based service delivery. |
| – |
Java 2 Platform Standard Edition,Version
1.3.J2SE ™ v 1.3 software was released in mid-2000 and
became a critical environment for the development,test and
integration of high performance front end applications (e.g.,presentation
of streaming quote data from market data vendors to desktops
and less-than-one-second trade executions from trader workstations).J2SE
v 1.3 software with the Java HotSpot ™ Client Virtual Machine
(JVM ™)is the fast and accurate foundation for building
and deploying client-side enterprise applications. It boasts
a 40%improvement over the initial J2SE release in terms
of start-up time and offers a 25%smaller RAM footprint for
most applications that use Java Foundation Classes in a
typical manner. It enables faster and easier use of front-end
applications such as those that comprise the A.B.Watley
UltimateTrader solution. |
| – |
Java HotSpot ™ Client JVM.The Java HotSpot
Client JVM technology breaks new ground in many areas of
its design and was critical to the attainment of some of
the most demanding performance requirements of the A.B.Watley
client applications. Its features include on-the-fly adaptive
optimization technology,ultra-fast thread synchronization,and
an advanced garbage collector (GC)with state-of-the-art
algorithms to virtually eliminate garbage collection pauses.
In addition, Java HotSpot source code is written in a clean,
high-level object-oriented design style that brings major
improvements in maintainability and extensibility. |
| – |
Java 2 Platform Standard Edition,Version
1.4. The soon-to-be released J2SE v 1.4 software will
bring even higher performance levels. It will enable A.B.Watley
Group to meet the performance needs of traders using the
most sophisticated workstation configurations at their desktops
- including some with as many as four display screens with
multiple market data vendor feeds and a full spectrum of
trading applications. |
| – |
Other Java Tools. Other tools and aids
from third parties also used for specific development,test
and integration functions. For example,the JPro tool from
K.L.Group was used by Java technology teams as a thread
analyzer,coverage and profiler. And Bug Seeker's debugging
tool for J2SE Version 1.3 software was used as a test and
integration tool because Visual Café does not provide adequate
support for v 1.3 debugging. |
The A.B.Watley Group technical team has
acquired substantial experience with Java tech
nology during the redevelopment and migration
processes and offers several observations that
may be of value to others considering the move
to Java technology for high performance securi
ties industry solutions.
- Software specialists with Java technology experience and skills essential
for the development of high performance financial services applications
are increasingly available in the skilled labor market. The availability
of qualified Java technology specialists should not be regarded
as a limitation to a 100%pure Java applications environment.
- The standard Java development tutorials, training courses and
manuals are excellent for building solid,reliable Java applications
for nearly all eCommerce solutions. However, Java technology is
a dynamic and continually advancing technology. It is very valuable
to supplement standard skills and sources with on-site support
by Java experts from Sun Professional Services to assure that
the very latest developments are understood and can be applied
to yield the reliability and performance levels essential to online
solutions such as A.B.Watley's UltimateTrader. According to Rick
Ratliff,A.B.Watley redevelopment team leader for redevelopment
of client applications for intranet direct access traders,"Our
own Java specialists as well as those from third party contractors
were able to develop and integrate solid applications that met
our design specifications but with the help of Sun Professional
Services experts,we were able to squeeze out significant added
performance. They are aware of the very latest advances in Java
technology and obtaining their assistance had a very positive
impact on both development time and performance."
- Significant improvements in both performance and resource utilization
(e.g.,memory footprint) were quickly attained when J2SE v 1.3
with Java HotSpot software became available. CIO Leon Ferguson
observed,"Our essential need for less than one second order execution
time as well as the fact that many of our most active clients
use high-end workstations with multiple display screens place
extremely high demands on the system. J2SE v 1.3 with HotSpot
made it possible for us to meet those demands, and we can expect
even higher performance levels with J2SE v 1.4 in the very near
future."
- The key promises of Java technology have been met:(1)It supports
platform independence at the client level.(2)It is supported with
a huge and growing pool of APIs and business logic objects critical
to financial services solutions. And (3),it meets a key enterprise
solution criterion of vendor independence. According to Eric LeSatz,A.B.Watley
Group Vice President, IS Administration,"We rewrote the entire
client piece of our UltimateTrader software to be 100%Pure Java™. We're now able to support clients not only on Windows desktops
but also Macintosh,Linux,Solaris ™ any system that has a Java virtual
machine. And our plans for future enhancements and new products
also will rely heavily on a Java-based development environment.
Our choice for Java technology versus C++or other development
environment was clearly the right decision, not only for current
operations but especially for staying abreast of changing conditions
in the future."
- BEA Tuxedo has proved to be an excellent choice for transaction routing and
oversight functions. It is extremely fast,works extraordinarily
well with the Solaris Operating Environment and comes with a wide
array of APIs that support easy and reliable interface to database
systems, trade execution systems,backend settlement systems,etc.
It fits extremely well with the new Java front-end applications
environment.
New A.B.Watley IT
Environment Diagram
An overview of the new A.B.Watley Group computing environment
is shown in Figure 4. The infrastructure for the new solution is comprised
of equipment and software components from Sun Microsystems,Oracle
Corporation,Objectivity Inc. and BEA Systems,Inc. The application
software is 100%Pure Java technology and was developed in-house
by A.B.Watley Group with support from various third party service
providers and Sun Professional Services.
Status and Outlook
All of the A.B.Watley Internet-based customer operations have been
migrated from the former IT environment to the new solution using
a Sun computing platform. Two identical data centers now exist,one
in New York City and the other in Richardson,TX,with each capable
of handling 100 percent of the total A.B.Watley peak transaction
load. Each system,in addition to handling a share of daily transaction
processing on a regional basis,serves as a hot backup for the other
and stands ready to immediately assume the workload of the other in
the event of disaster.
In addition,the following new or upgraded
functionality is operational to provide enhanced
services for all A.B.Watley online clients.
- A significant in-house development by the
A.B.Watley Group technical staff provides a
proprietary compression algorithm that cuts
the data rate for quotes by about two-thirds.
This results in faster service along with lower
bandwidth requirements for online customers.
- In-house applications software is enhanced
to support both decimalization and penny
increment capabilities for quotes and trading.
- A new high-speed billing capability has been
added through A.B.Watley Group in-house
software development.
A.B.Watley customers include individual B2C investors and B2B organizations
- and the customer base ranges from casual personal investors to active
day traders to investment organizations to major online brokerage
firms. All are supported by the new Sun computing environment. Speed,reliability,security
and ease-of-use are now greatly enhanced to meet the Watley vision
of providing the highest quality online trading environment at the
lowest cost.
Concluding Comment
The A.B.Watley Group technical management concluded in early 1999
that its existing IT environment,then more than 200 NT servers at
a single data center,could not scale to meet the demands of the rapidly
growing business. In addition to scalability limitations,it was increas
ingly difficult to add new functionality and services - and both resource
requirements for IT management and total operating costs were growing
at accelerated rates. A decision was made to move to a new computing
environment and to build the new solution on a UNIX platform.
During a period of about two years,A.B.Watley Group made the transition
from an NT computing environment to a new and advanced solution running
100%Pure Java applications in an open architecture built on a robust
Sun platform along with best-of-breed infrastructure components from
Oracle,Objectivity and BEA Systems. This transition was achieved without
any disruption of service to customers and with no degradation of
performance levels.
The power,reliability and performance of
A.B.Watley Group's new IT solution enjoys an
excellent reputation in the securities industry as
was evident in the recent announcement of its
licensing by E*TRADE.(See press release below.)
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A.B.Watley Press Release,1 December 2000
A.B.Watley Group Inc.(NASDAQ:ABWG),premier
provider of financial services technology ( www.abwatley.com)today
announced that E*TRADE Group Inc.(NASDAQ:EGRP)will license
features of Watley's proprietary "Direct Access" trading
software and work together to create a customized trading
product.
"This agreement is both a validation of the quality of
our proprietary technology and a tremendous business opportunity.
We have spent considerable resources developing this technology
and are extremely please that we can now count E*TRADE, a
market leader in online financial services,as a significant
alliance," stated Tony Huston,President of A.B.Watley Group
Inc. |
©2001
Sun Microsystems,
Inc. All rights reserved.
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the Sun Logo, Sun
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Gold, and SunSpectrum
Silver are trademarks
or registered trademarks
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Inc. in the United
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