[SATLUG] London Stock Exchange Moves to Linux

Peter Cross pjcrux at gmail.com
Thu Oct 8 14:28:10 CDT 2009

My Apologies if this was sent out already.


By: Steven J. Vaughan-Nichols

When it comes to business computer systems, nothing is more mission-critical
than the massive trading software systems that underlie stock markets. A
failure of an hour here can mean billions of dollars of lost trades. The LSE
(London Stock Exchange) learned that the hard way when their .NET/Windows
Server 2003 trading platform
a dog early last September. The new LSE management is not going make
that mistake again. This October, the LSE purchased
will be switching its stock exchange programs to the company's
Millennium Exchange

I saw this move coming. While the LSE never officially announced that its
Windows and .NET stock trade software TradElect was the root of its
September failure and perpetually slow performance, it was an open secret in
the City -- London's equivalent to America's Wall Street -- that that was
the case. Indeed, it was this technology flop that lead to the LSE CEO Clara
Furse leaving the
July. The new CEO, Xavier Rolet, immediately decided to get rid of
TradElect and started shopping for other platforms.

Friends of mine in the City tell me that the LSE immediately started
considering a Linux-based solution. It doesn't take a genius to see why. The
world's fastest stock exchanges, like New York's International Security
Exchange, run on
In a world of high-frequency
a millisecond really can mean the difference between profit and loss,
stock exchanges can't afford to be slow, never mind actually going off-line.

The platform itself is built primarily on Linux, but Solaris and Cisco
networking also play important roles. The back-end database engine is based
on Oracle. The LSE expects to see transaction speeds drop from a claimed
best speed of 2.7 milliseconds -- which was rarely, if ever, seen under
TradElect -- to the Linux solution's claimed 0.4 millisecond speed.

It wasn't just raw speed though that brought the LSE to Linux. Linux is
a lot cheaper, for high-end servers.

According to an IBSJ report, David
director of information and technology at LSE, said that compared to the
annual bill of $65 million for TradElect, MillenniumIT was a bargain at a
purchase price of $30 million. The LSE predicts that moving to Linux will
give the company an annual cost savings of at least £10 million ($14.7
million) from 2011-12. In addition, "The new technology is a lot lighter,
nimbler and easier to install" and will also enable faster releases.

The LSE hopes to close the deal this month. The transition from TradElect to
the MillenniumIT is expected to take up to 18 months. Lester hopes to get it
completed faster than that.

In the end, the LSE and its traders will profit from this move. As Steve
George, director of corporate services at
Canonical<http://www.canonical.com/>(the company behind
Ubuntu <http://www.ubuntu.com/>) told me when we talked about the deal.
"When performance and stability matters, as they do in business, Linux is
the positive choice. This move will be good both for the LSE and its
customers and to the wider family of Linux."


Peter J. Cross
San Antonio, TX

"Experience has taught mankind the necessity of auxiliary precautions"
-James Madison, Federalist Paper No. 51

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