True Cost of Latency

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This presentation demonstrates how the combination of Push Technologies 'Diffusion' and GemStone's 'GemFire' can reduce the cost of latency.

This presentation demonstrates how the combination of Push Technologies 'Diffusion' and GemStone's 'GemFire' can reduce the cost of latency.

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Transcript

  • 1. The true cost of latency Christian James Product Manager Push Technology Ltd Mike Stolz VP of Architecture GemStone Systems Inc.
  • 2. Agenda
    • What is latency
    • The cost of latency
    • Combating latency and its hidden barriers
    • GemFire/Diffusion alternative
    • Q&A
  • 3. Latency is everywhere What is latency?
  • 4. Derivation of latent, a noun
    • The Concise Oxford Dictionary
      • Latent adj. & n.
        • 1) concealed, dormant
        • 2) existing but not yet developed
        • [][] Latency n.
    • Wikipedia
      • The time delay between the moment something is initialized and the moment its first effects begin. The word derives from the fact that during the period of latency the effects of an action are latent, meaning "potential" or "not yet observed".
  • 5. It is not just the network
    • Infrastructure Latency
      • Low Level
        • OS/Kernel
        • Processors/CPU’s
        • Storage I/O
      • High Level
        • DNS and Routers etc.
    • Software processing Latency
    • Transmission Latency
    • Service Dependency Latency
    • Propagation Latency
    • Front End/End-User Latency (80-90%)
  • 6. Total latency equals
    • Disk access
    • +
    • Sender overhead
    • +
    • Time of flight
    • +
    • Message size/Bandwidth **
    • +
    • Receiver overhead
    ** Potentially misleading
  • 7. In the context of an ‘e-trade’ Hardware And Software T0 = Price Generation T1 = Spread T2 = Distribution T0 = Price Generation T1 = Spread T2 = Distribution T6 = Hedge? T1 = Spread T2 = Distribution T1 = Spread T5 = Calculate bank’s position T4 = Book trade T3 = Pre-trade credit check T2 = Distribution T1 = Spread T6 = Hedge? T2 = Distribution T1 = Spread T5 = Calculate bank’s position T6 = Hedge? T2 = Distribution T1 = Spread T4 = Book trade T5 = Calculate bank’s position T6 = Hedge? T2 = Distribution T1 = Spread T3 = Pre-trade credit check T4 = Book trade T5 = Calculate bank’s position T6 = Hedge? T2 = Distribution T1 = Spread Transmission Propagation Service End-user processing
  • 8. Why worry about it
    • It Costs!
  • 9. The cost of ignoring it is high, and its not just trading systems
    • Amazon – every 100ms of latency cost them 1% in sales
    • Google – an extra 0.5 seconds in search page generation time dropped traffic by 20%
    • Financial – “If a broker’s electronic trading platform is 5 ms behind the competition it could loose them at least 1% of their flow – that’s $4 million in revenues per ms” (TABB Group)
  • 10. In the context of an ‘e-trade’ Difference in price at T0 and T6 X Amount traded is the Cost of Connectivity (COC) – or Cost of Latency T3 = Pre-trade credit check T4 = Book trade T5 = Calculate bank’s position T6 = Hedge? T2 = Distribution T0 = Price Generation T1 = Spread End-user processing
  • 11. Every pip difference between T0-T6 reduces your profit £10,000,000 @ 1.6489 T0, make a price of 1.6489/1.6490 T6, hedge the trade, market price now 1.6484/1.6485 £10,000,000 @ 1.6485 Negative P&L of £4,000 versus Positive P&L of £1,000 Doesn’t sound a lot until you consider the trillions traded in a day and the speed that prices can be changing (8+ times a second)
  • 12. “ Latency Exists, Cope!” (Dan Pritchett) Combating it, and its hidden barriers Hardware or software?
  • 13. Moore’s law makes hardware seem like the logical option?
  • 14. The same can’t be said for corresponding speed gains, they are slowing CPU Clock Speed, Moore’s law still exists (for how long) but for different reasons – plus Memory/RAM Wall broken Ram Speed (limited to distance from CPU) Desk I/O PS Network Speed of light Speed Date
  • 15. Economic cost isn’t the only challenge, supply is running out
    • 60-70% of IT budgets spent on operational costs (CIO Magazine)
    • 5% of IT budgets spend on energy (BBC)
    • 1996-2006 no. of servers in London increased from 6  28m.
    • Avg. power consumption of each increased from 150  400 watts.
    • In 2007 it was predicted London would run out of power in 2009
  • 16. Still, doesn’t matter I am in financial services I can afford it – what about society!
    • 19 Data centres in Eastern Region use 6 X the power of Ipswich (BBC)
    • Financial Services (Inside Market Data):
      • FS accounts for 8% of global GDP (or did)
      • ICT accounts for 4% total energy consumption
      • Hence, FS carbon emissions accounts for between 0.32-0.5% of total carbon emissions – and growing
    “ Morgan Stanley is committed to the environment. This is true in all aspects of our business, including how we evaluate companies, transactions and risk; how we collaborate with and serve our clients, financing partners and employees; how we conduct our own operations; and how we promote and develop new market opportunities, " affirmed John Mack, Chairman and CEO of Morgan Stanley.
  • 17. Data centres aren’t the only element in the mix where supply is under strain
    • “ Net bombs” are gobbling up the internet
      • YouTube = using the same amount of traffic as the entire internet in 2000
      • iPlayer 5% of UK internet usage.
    • Monthly internet traffic is running at 8 exabytes (million trillion) – one exabyte is equivalent of 50,000 years of DVDs
    • 2007 traffic grew by 75%, capacity by 45%
    • Brownouts/jitters are due to start in 2010
    • What is the alternative?
  • 18. How we tackle it Get smarter with less "Hardware can give you a generic 20 percent improvement in performance, but there is only so far you can go with hardware. “ Rob Wallos, global head of market data Citi
  • 19. In the context of an ‘e-trade’ Transmission Propagation Service T3 = Pre-trade credit check T4 = Book trade T5 = Calculate bank’s position T6 = Hedge? T2 = Distribution T0 = Price Generation T1 = Spread End-user processing
  • 20. Demanding business requirements and drivers
    • Speed, Stability, Scalability
    • Increase the number of markets offered
    • The ability to offer more volatile markets
    • Deliver to more channels
    • Improved marketing/advertising capabilities
    • Minimize unmatched orders/bets
    • Global distribution and real-time replication
    • Localized Data creating better user experience
    • Cost effective
  • 21. Connecting your clients in the most latent efficient manner Load Balancer Diffusion Internet Message Broker Application Layer Load Balancer Europe Asia Diffusion Internet Message Broker Diffusion Internet Message Broker Application Layer Diffusion Internet Message Broker DB GemFire DB GemFire
  • 22. The enterprise data fabric
    • GemFire, by GemStone Inc
  • 23. In essence, a suite of low latency communication products
    • GemFire allows you to create a highly resilient, elastic, enterprise data fabric to improve performance while simplifying your architecture.
    • GemFire enables you to safe-store and receive data and events to and from any back-end data source and pass notifications off to Diffusion.
    GemFire – Enterprise Data Fabric
  • 24. Performance, efficiency and message ‘byting’
    • Diffusion, by Push Technology Ltd
  • 25. In essence, a suite of low latency communication products
    • Diffusion allows you to create a two-way secure real-time online channel between an organisation and its audience.
    • Diffusion enables you to push and receive data and events to and from any current, or future, “net” connected device including the web browser.
    Diffusion – the power behind the Net
  • 26. Smaller messages optimally delivered, reducing latency and foot print
    • Best Message Delivery (BDM)
      • Conflation
      • High/Low Water Marks
      • Throttling (could be used to level the ‘playing field’)
    • Compression
    • Your own message format avoids unnecessary transformation/serialization
    • Only send deltas - reduces size/amount of data sent
    • Hierarchical topics - reduces size/amount sent to finest grain
    • Implemented sites have seen up to an 80% reduction in bandwidth consumption and hardware infrastructure
  • 27. Hierarchical topics, in context of FX
  • 28. Strong focus on performance & efficiency, driven from the server
    • NIO technology ensures data moves through Diffusion as quickly as possible
    • Zero Copy
    • Zero Fan-out
    • Bi-directional, no need to open another socket when sending information (executing a trade) back to the server as you would with a web request
    • Implementing sites have seen up to 75% reduction in hardware requirements
  • 29. For More Information Please Contact Us at :
    • [email_address]