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Turning Your Business Inside Out ... Safely


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Turning Your Business Inside Out ... Safely

  1. 1. Turning your business inside out… safely. Gregor Bailar CIO & EVP of Operations Nasdaq Stock Market, Inc. May 2001
  2. 2. <ul><li>Built on Technology </li></ul><ul><li>Competing Daily for Business </li></ul><ul><li>Riding Incredible Growth </li></ul><ul><li>Continually re-inventing our self </li></ul><ul><li>Creating a Global Brand </li></ul>A Perpetual Start-up
  3. 3. <ul><li>Opened in 1971 </li></ul><ul><li>World’s First Electronic Stock Market </li></ul><ul><li>Largest Stock Market in the USA </li></ul><ul><li>Over $20 Trillion traded in 2000 </li></ul><ul><li>$70 to 115 Billion traded daily </li></ul><ul><li>Lists 4,829 Companies and 5210 Issues </li></ul><ul><li>Over 600 Companies over $1 Billion </li></ul><ul><li>Regularly Handles 2 Billion Shares </li></ul>The Nasdaq Stock Market, Inc.
  4. 4. World’s Leading Stock Markets Nasdaq’s Dollar Volume Ranks #1 in the World. Values in Billions YTD for 2000 as of Sept. 2000 $15.5 Trillion
  5. 5. Dollar Volume Growth Percentage Change in Dollar Volume of the Major Markets, 1990 - 1999 515% 475% 171% NYSE Nasdaq London Tokyo Deutsche 14% Source: International Federation of Stock Exchanges (FIBV) As of 11/30/99 1876%
  6. 6. Total Number of IPOs Source: CommScan LLC and Securities Data Company. As of 12/31/99, excludes closed-end funds. 1998 1999 Nasdaq NYSE Amex 2000
  7. 7. A little history… 1998 1999 2000 2001 700 MSD 2.881 BSD April 4 1760 MSD 2001 2000 1997 1.34 BSD Oct 28 500 MSD 1998 1054 MSD 2300 MSD 3.18 BSD Jan 3 3.19 BSD April 18
  8. 8. Nasdaq Operating Statistics <ul><li>World’s Largest Real-time Network 7,500+ Screens </li></ul><ul><li>Retail & Commercial Data Subscribers 500,000+ Subscribers </li></ul><ul><li>Peak Daily Share Volume 3.19 Billion </li></ul><ul><li>Average Daily Share Volume (YTD) 2.0 Billion </li></ul><ul><li>Simultaneous Price Discovery <180 msec </li></ul><ul><li>Peak Transaction Rate 4000+ TPS </li></ul><ul><li>Peak Daily Page Views 12+ Million </li></ul><ul><li>Annual Technology Spend (2001) $500+ Million </li></ul><ul><li>Production System Upgrades 232+ Releases </li></ul>
  9. 9. Trading Network Topography Connectivity Points of Presence Canada Rockville Trumbull
  10. 10. Nasdaq Domestic Technology Centers Backup site for market systems Primary site for post-trade, Web-site systems 30,000 sq ft Data Center 300 technologists Primary site for market systems Backup site for post-trade, Web-site systems 75,000 sq ft Data Center 550 technologists 3 buildings Nasdaq Market Site operations Tier III SWAT Team 2500 sq ft Data Center 15 technologists 2 locations (Wall Street and Times Square) Rockville Maryland Trumbull Connecticut New York
  11. 11. Nasdaq Market Systems Quotation Execution Trade Reporting Computer to Computer Links Quote and Trade Data Vendors Orders Trade Market Surveillance Quote Data Trade Data Quote Broker Dealers Trade Confirmation Reports Updates Clearing and Settlement Locked-In Trades Nasdaq Workstation
  12. 12. Historic Quote Volumes 26.9% 1994 1995 1996 1997 1998 1999 2000 1993 500 1000 1500 2000 2500 3000 3500 4000 4500 Annualized Growth Additional 40% Growth During Q1 ‘00 133% 136%
  13. 13. April 18, 2001 – 3.19 Billion Shares
  14. 14. <ul><li>Engineered for Scale </li></ul><ul><li>>12 million page views </li></ul><ul><li>25% International </li></ul><ul><li>Windows 2000 </li></ul><ul><li>Intel-based Servers </li></ul><ul><li>Multiple Incoming Real-Time Feeds </li></ul>
  15. 15. Nasdaq Market Site <ul><ul><li>Eight story tower displays the largest video display screen in the world </li></ul></ul><ul><ul><ul><li>90 feet by 120 feet (10,736 sf, or ¼ acre) </li></ul></ul></ul><ul><ul><ul><li>18,677,760 LEDs </li></ul></ul></ul><ul><ul><li>Broadcast Facility with over 150 broadcasts per day to over 25 different networks from all over the world </li></ul></ul><ul><ul><li>More than 5000 visitors monthly </li></ul></ul><ul><ul><li>Went live December 1999 in Times Square </li></ul></ul><ul><ul><li> </li></ul></ul>
  16. 16. Nasdaq Global Plans Nasdaq Japan Nasdaq Europe Nasdaq USA SEHK Latin America Middle East Nasdaq Canada
  17. 17. The world comes full circle ARPA Internet .edu .org .com DARPA .gov Targeted research General research General commerce
  18. 18. The Internet Promise <ul><li>Access </li></ul><ul><ul><li>Open </li></ul></ul><ul><ul><li>24 x 7 </li></ul></ul><ul><ul><li>Global </li></ul></ul><ul><li>Customization </li></ul><ul><ul><li>Personalization </li></ul></ul><ul><ul><li>Supply chain integration </li></ul></ul><ul><ul><li>Product Innovation </li></ul></ul><ul><li>Transparency </li></ul><ul><ul><li>Self Service </li></ul></ul><ul><ul><li>Expose internal data </li></ul></ul><ul><li>Efficiency </li></ul>
  19. 19. The Internet Tension <ul><li>Access </li></ul><ul><ul><li>Open </li></ul></ul><ul><ul><li>24 x 7 </li></ul></ul><ul><ul><li>Global </li></ul></ul><ul><li>Customization </li></ul><ul><ul><li>Personalization </li></ul></ul><ul><ul><li>Supply chain integration </li></ul></ul><ul><ul><li>Product Innovation </li></ul></ul><ul><li>Transparency </li></ul><ul><ul><li>Self Service </li></ul></ul><ul><ul><li>Expose internal data </li></ul></ul><ul><li>Efficiency </li></ul><ul><ul><li>How deep? </li></ul></ul><ul><ul><li>Do you have 24x7 capability? </li></ul></ul><ul><ul><li>What are the Global implications? </li></ul></ul><ul><ul><li>How? For whom? How interactive? </li></ul></ul><ul><ul><li>For whom? What level of openness? </li></ul></ul><ul><ul><li>Who will innovate? </li></ul></ul><ul><ul><li>What is your customer looking for? </li></ul></ul><ul><ul><li>How deep? At what risk? </li></ul></ul><ul><ul><li>What will go away…? </li></ul></ul>
  20. 20. Pitfalls <ul><li>Quality of Service </li></ul><ul><ul><li>Reliability </li></ul></ul><ul><ul><li>Predictability: The Monica effect </li></ul></ul><ul><li>Performance </li></ul><ul><ul><li>World Wide Wait </li></ul></ul><ul><ul><li>“ BusyTone” </li></ul></ul><ul><li>Security - Entitlement/Trust </li></ul><ul><li>Regulatory Constraints </li></ul><ul><li>Control shifts appears to shift to users… but more is actually centralized </li></ul>
  21. 21. Role of the CIO in securing e-commerce <ul><li>FACT 1: The Internet cannot be centrally governed – period… </li></ul><ul><li>FACT 2: Customers demand an Internet venue for commerce </li></ul><ul><li>Conclusion: Each participant must bear his/her weight and create a dome of compliance through its commercial associations </li></ul><ul><li>Build resilient infrastructures </li></ul><ul><li>NEVER underestimate the power (needs) of self-service </li></ul><ul><li>Actively support industry information sharing vehicles </li></ul><ul><ul><li>NIPC, ISACs, CERT, etc… </li></ul></ul><ul><li>Certify your suppliers for the same standards </li></ul><ul><li>Proactively plan for Forensic Readiness </li></ul>
  22. 22. In the early 90’s 1 out of every 6 new US jobs was created by a Nasdaq Company. In the new Millenium, perhaps a quarter of new jobs where Nasdaq operates will be created by Nasdaq companies…
  23. 23. Several “moon shots” underway <ul><li>Several simultaneous high visibility projects: </li></ul><ul><ul><li>Doubling volume every 14 months </li></ul></ul><ul><ul><li>Re-architecting the entire underbelly of the company </li></ul></ul><ul><ul><li>3 rd year of $100 million new delivery projects </li></ul></ul><ul><ul><ul><li>Y2k, Decimals, Supermontage… </li></ul></ul></ul><ul><li>Required on-site executive presence </li></ul><ul><ul><li>Accept hand-off from prior site executive </li></ul></ul><ul><ul><li>Spearhead customer-focused cultural re-alignment </li></ul></ul><ul><li>Demutualizing/Privatizing the company </li></ul><ul><li>Expanding both globally and into new products </li></ul>
  24. 24. SuperMontage <ul><li>Nasdaq’s Next Generation Trading System </li></ul><ul><li>Shows sum of all orders and quotes at various price levels </li></ul><ul><li>Acts as a voluntary central repository for all Nasdaq activity </li></ul><ul><li>Provides competitive services to all participants equally </li></ul><ul><li>Shows investors many price levels beyond the current best </li></ul><ul><li>Replaces Nasdaq’s Current Transaction Systems </li></ul><ul><li>Provides for Increased Volume and Flexibility </li></ul><ul><li>Allows backward compatibility for all participants </li></ul>
  25. 25. Nasdaq Japan <ul><li>First international subsidiary of a market </li></ul><ul><li>Targeting Nasdaq hybrid market structure </li></ul><ul><li>Initially operating through Osaka Securities Exchange </li></ul><ul><li>June 19, 2000 launch: over 40 new IPOs since 2000 </li></ul><ul><li>Connectivity to all major participants in Japan </li></ul><ul><li>Fully independent and operational corporation </li></ul><ul><li>Recently completed a round of private funding </li></ul><ul><li>Will launch Super Montage structure at end of 2001 </li></ul>
  26. 26. Nasdaq Europe <ul><li>Nasdaq is launching a native European Nasdaq market </li></ul><ul><li>Nasdaq Europe has three initial phases of trading: </li></ul><ul><ul><li>Easdaq systems (started March, 2001] </li></ul></ul><ul><ul><li>New Nasdaq European Trading System (May, 2001] </li></ul></ul><ul><ul><li>Nasdaq European Supermontage System [Q4 2001] </li></ul></ul><ul><li>Nasdaq Europe will trade all applicable European stocks </li></ul><ul><li>Nasdaq Europe will be the IPO market of choice in Europe </li></ul><ul><li>Nasdaq Europe will offer other global Nasdaq products as well </li></ul>
  27. 27. Global Trading Platform Nasdaq Web Services Nasdaq Trading Network Nasdaq Japan Nasdaq US Nasdaq Europe Global Linkage Professional Traders Internet Services Other Markets