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How Stock Exchanges Made Linux the Finance IT Standard
Back in 2007, the core technology behind the New York Stock Exchange changed dramatically, although without very much fanfare. That's when the NYSE abandoned its core Unix operating system – and two decades of familiarity with it – in favor of a relatively unproven x86-based Linux platform.
Why make such a drastic change? According to NYSE Euronext CIO Steve Rubinow, the NYSE wanted a Linux-based system so it would be better able to "take advantage of technology advances when they happen" and be "as independent of any technologies" as it could be.
Rubinow's quotes follow a familiar refrain that came out of every high-profile organization that had switched over to Linux up to that point, and every one that has followed since. In the finance vertical in particular, sysadmins have come to appreciate Linux because of the operating system’s low networking and transactional latency, which helps enable high-frequency trading, according to ZDNet. Linux’s open source architecture is also easily modified to enable even better performance, deliver new features and fixes faster, and suit unique IT needs.
The world's largest stock exchanges and leading financial institutions started converting to Linux a decade ago, citing the additional security, stability and flexibility the platform provided. Today, most favor Linux-based systems, which ought to encourage more financial services businesses to consider switching to open source.
Here's a timeline of notable adopters so far:
- Merrill Lynch (2002): Merrill Lynch was an early adopter, replacing its mainframe servers with IBM boxes running Linux software to achieve cost savings, improved stability and better scalability.
- Chicago Mercantile Exchange (2004): After migrating from Sun Solaris UNIX to Red Hat Enterprise Linux, the Chicago Mercantile Exchange (CME) saw an immediate doubling of its daily trades, from 1 million to 2.2 million. The transition also enabled the CME to cut in half its overall capital expenditure spending on hardware.
- New York Stock Exchange (2007): The New York Stock Exchange went all in when it adopted Linux. NYSE CIO Steve Rubinow said Red Hat Enterprise Linux would be central to operations, comparing it to “water…pervasive within our architecture.” The NYSE’s Linux system generates 1,500,000 quotes and 250,000 orders every second.
- Deutsche Börse Group (2009): Longtime Linux user Deutsche Borse Group’s launched a new Linux-based platform that made its exchanges the fastest in the world at the time. Deutsche claimed its software could execute a million trades per second.
- NASDAQ (2010): NASDAQ OMX upgraded its equity, derivatives and fixed income systems to the Genium INET trading platform, designed to be “one of the fastest and most functionally complete multi-asset trading systems.” Christoph Lameter told Computerworld that NASDAQ customized its own version of Gentoo Linux to manage its exchange, but the degree of modification "depends on how daring the exchange is."
- London Stock Exchange (2011): On September 8, 2008, activity on the London Stock Exchange ground to a halt, supposedly following the crash of a Windows-based server. Three years later, the LSE dumped the system in favor of a Novell SUSE Linux-based platform. It worked perfectly on its first day.
With more financial services firms following the lead of these industry giants and thinking about upgrading to Linux-based environments, sysadmins will need to be ready to manage that transition. And part of that process involves reviewing their IT monitoring platform.
Legacy IT monitoring solutions that only monitor Windows technology do not offer the customizability that is needed to manage the multi-platform finance infrastructure so prevalent today. Linux alternatives, however, are flexible, and offer sysadmins a depth of coverage and visibility into the finance infrastructure of tomorrow.
As we explain in our new ebook, “Stay Bullish: How Finance Sysadmins Bridge New and OId IT,” IT monitoring enables finance sysadmins to integrate new technology into their IT estate without upsetting the current flow of operations.
Download our eBook for free and learn:
- How to balance your time and cost with firm security and high reliability
- How the biggest exchanges such as NASDAQ are moving forward with their new IT systems and datacenters and
- How Heartland Systems processes and monitors nearly 11 million transactions in one day with Windows, and Linux
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