Last week, CMC Markets announced that they switched from Apama to StreamBase as their enterprise-wide event processing platform. As FXWeek reported, CMC “initially spent three months deploying a similar system from Apama, but dropped the deal in favor of StreamBase.” As a firm that trades over $1.4 trillion a year, CMC’s decisions about their infrastructure are not taken lightly. So their decision gives us pause to ask: why the switch?
Asif Adatia, Chief Information Officer for CMC, described their decision like this: “the ease of development for both financial engineers and technical engineers, the performance, and scalability of the platform were our key criteria.” Let’s examine each part of that statement.
1. Demonstrably better ease of use. You might think that the efficacy of a development environment would be a subjective call. In some ways, it is - when it comes to the visual esthetics of a tool. On the other hand, usability is often the driver for market-altering innovation - profound shifts in the accessibility of a new tool can suddenly unlock barriers to innovation. The change in the last 10 years in finance has been profound. 10 years ago, algorithmic trading wasn't even named, now 70% of the U.S. equities trade execution happens algorithmically. In their report "The World According to Quants: Enter Alpha Generation Platforms", the AITE group reported that certain trading algorithms have a shelf-life of less than 3 months. In the face of all that rapid change and ephemeral opportunity, the ability to quickly build real-time trading infrastructure (algos, execution, risk, compliance, pricing, TCA, surveillance) is a matter of survival.
Firms like CMC, CME Group, and RBC didn't choose StreamBase for its aesthetics, they chose StreamBase because its graphical development environment gives them a fundamental competitive edge. The tools aren't just easy to use, they allow business users and engineers to work together because the language of StreamBase matches the way they think. The StreamBase dataflow language was designed from the beginning to program event-based systems the way you would draw them on a whiteboard, and the proof lies in what customers say, as Adatia told FX week, “Our financial engineers find it really easy to put the models together.”
And this ease of use delivers another critical innovation: firms get this usability and time to market advantage and the performance benefits of event processing - at the same time. StreamBase isn't like other CEP tools that make the developer resort to low-level programming to make the system perform and scale. Relieving the user from the burden of thinking about plumbing was described by Adatia to A-Team Insight “[CMC] create their models readily, without resorting to code-level programming.” PhaseCapital reported that they built their trading system with StreamBase in 4 months rather than the 4 years it would take to build it with traditional development tools and they change their strategies every day. These are not subjective opinions about aesthetics, they are qualitative and quantitative testimonials to the innovation that StreamBase's interface can provide.
2. Built-in performance you can see. On Wall Street, milliseconds, and microseconds matter. CMC switched to StreamBase because they wanted the fastest engine they could get.
StreamBase was designed for speed from the very beginning. Release 1.0 in 2005, was designed to take advantage of modern hardware, from the multi-threaded server to the StreamBase language which produces highly performance applications without burdening the developer. The StreamBase language plans performance like a database pre-processor plans query optimization. In 2007, StreamBase engineers broke down another barrier with a straight-through event processing compiler. Recently, in 2008, direct bytecode generation optimization took the StreamBase performance innovation even further ahead of all other CEP platforms.
When performance is something you can see, it's a remarkable result. CMC said it this way: '[we don't talk about our specific latency numbers publically, but the performance is] good though and you can compare us on FX pricing to a bunch of our competitors. And you will see our performance is noticeably better at times. Absolutely." The world's largest electronic futures and options exchange in the world, CME Group chose StreamBase after using performance as a critical selection criteria, because they process over 11 million trades a day.
3. Scalability to grow. You might assume better scalability means StreamBase-based applications can be run on multiple CPU cores, and that’s true - better use of hardware means CMC needs less hardware. CMC described that their StreamBase system easily handles "More than twice the real-life peak rate for price ticks encountered so far.”
But better scalability isn’t only about increasing volumes - it’s about ease of management, ease of customer support, and the ease with which high performance and scalability can be attained by developers.
And scalability is also about expanding usage. Apama established early on algorithmic trading as an important use case for CEP. But now, as CEP's use explodes into new application areas, firms are looking more deeply at how easy it is to build their second, third, and fourth applications. Just last week we had a call with a customer who guessed they had deployed "about 100 StreamBase applications."
And now we have come full circle back to the StreamBase development environment. Our mantra is to “deliver high performance and scalable applications without having the developer think about performance and scalability.” Streambase makes performance native, which is one more reason it is unique.
CMC is not alone. Organizations that are adopting StreamBase CEP are seeing these same benefits in ease of use and performance. CEP is the disruptive technology that frees their engineers to focus on creating business value instead of plumbing. CEP empowers their business analysts to work with the actual software instead of wishlists and design documents. CEP allows the whole organization to be more agile, to deploy changes to their infrastructure faster, and to take advantage of new opportunities ahead of the competition.