Dell/Kove Webinar 12.4.2012


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Dell/Kove Webinar 12.4.2012

  2. 2. Agenda• Quick Overview of Trends with Adam Sussman• Intro to Kove• Conversation with John Overton of Kove and Mark King of Dell• Q&A 2
  3. 3. Featured Speakers Mark King John Overton Adam Sussman Global Strategy Director, CEO and Founder Partner, Head of Research Banking and Securities Kove TABB Group Dell Inc John founded Kove in Adam oversees TABB Group’s Mark’s role is to develop next 2004. Before that, John was global research business, spanning generation solutions in the founder and CTO of a company equities, fixed income and listed Banking & Securities vertical as that built the fastest network- derivatives, and the supporting well as manage Dell’s strategic optimized database in the world. technology infrastructure. partners in this space 3
  4. 4. Data management is the most initiative with the greatestintensity and continues to trends Top Business Drivers of Capital Markets Technology High Data Management I n t Lower Risk TCO e n s Regs i Latency t y Security Disaster Recovery Mobility Low Trending HighSource: TABB Group 4
  5. 5. Message rates have uncoupled from volumes Aggregated One Minute Peak MPS Rates Arca, CTS, CQS, OPRA, NQDS 6,617 (in thousands) 5,500 5,210 4,092 3,410 1,562 2,562 907 1,925 701 573 180 120 150 5 7 10 13 26 80 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 US equity ADV (in Bs shares) 9,747 9,382 6,831 8,146 8,682 7,464 6,783 7,274 6,371 5,760 5,038 6,134 5,896 4,133 4,205 4,360 2,821 3,115 3,219 3,110 0 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11Source: SIAC, OPRA, NASDAQ, FTF, TABB Group Est 5
  6. 6. Increasingly trading world is one of massive data and analytics HFT Estimates % Share Volume (US Equities) 52% 61% 56% 55% 51% 35% 14.0% 27.0% 32.0% 31.0% 31.5% 31.0% 16.0% 17.0% 12.5% 21.0% 18.0% 14.5% 22.0% 5.5% 6.5% 5.0% 14.0% 7.0% 5.0% 9.0% 7.5% 8.0% 7.0% 15.0% 7.0% 14.0% 15.5% 12.0% 11.0% 13.0% 1 12.5% 20.0% 13.0% 12.0% 12.0% 6 13.0% % 10.0% 10.0% 11.0% 13.0% 13.5% 14.5% 2007 2008 2009 2010 2011 2012 HFT Total Retail Long Only Hedge Fund HFT Hedge Bank Flow/Specialists Ind Prop Market Makers FX Turnover by Entity (Avg Daily Turnover in $USb)13% $4,500 $4,000 $3,500 13% $3,000 18% $2,500 48% $2,000 14% 40% $1,500 17% 19% 17% 33% $1,000 20% 18% 28% 20% $500 13% $- 70% 64% 63% 58% 53% 42% 39% 1992 1995 1998 2001 2004 2007 2010 Reporting Dealers Other Financial Inst Non-Financial Customers 6 6
  7. 7. High frequency latency curve makes investmentsin lower latency infrastructures challenging +++ Initially, to reduce the level Latency (L) by X amount, you require y resources Lx x L A However, as you advance along the Latency T Maturity Curve, to achieve the same level of latency improvement, it requires 4x as many resources (y) E xl l N C ++ Y La ten y c L C u y Ma V rve tu rity L s 4y + $ $$ $$$ RESOURCESSource: TABB Group 7
  8. 8. In Front Office, feature rankings are clear… Front office data challenges  Data management is the leadingEnhanced Data pain point for quants 3.7 Management  Enhanced data management means not having to move the data around as much Greater  Computational speed is just asComputational 3.5 much a function of how fast data Speed can be moved as the engine itself  While most firms need better collaboration, this does not Enhanced necessarily translate into a need Collaboration 3.1 for - or an awareness of - better Tools collaboration tools (3.1 out of 5) Spreadsheet- Like Modeling 2.7 PlatformSource: TABB Group 8
  9. 9. Conclusions Data will only become more important Latencies will only decrease as competition drives demand to be first For others, increasingly it will be about analytics as deeper analytics provides differentiated alpha A renewed interest in stability will lead to greater focus on system integrity Regulation is driving risk and compliance  Demand will remain high for at least five years Required  Handle data faster  Calculate impact on pre-trade basis  Test against even more data under more scenarios  Recovery time will need to be faster 9
  10. 10. i/o landscape disk flash xpd™ (dram) • Read 6 ms • Read Claim 68 µs • Read 5 µs – Base – Ratio 88:1 – Ratio 1200:1 • Walking • Bullet Train • X15 Rocket Plane • ~ 3 mph • ~ 264 mph • > 3,600 mphSource: 1.2 TB MLC 10
  11. 11. as NAND density increases… … lifespan shortens & errors increase 3x * 6 vendor products testedSource: “The Bleak Future of NAND Flash Memory”, Dept. of Computer Science and Engineering, U. California San Diego and Microsoft Research, Mountain View, 11
  12. 12. but DRAM just gets better… … as density increases 90% …... and power decreases 70% ……… bandwidth increases 1,500%Source: “”, IBM (Armonk NY) and Micron (Boise, ID) 12
  13. 13. STAC-M3 Dell-Kove v. 2nd Best Dell-Kove beats% as fast competition in 94% of all tests 13
  14. 14. Moore’s law benefits DRAM and CPUs • 512 Core NVIDIA “Fermi” 14
  15. 15. tomorrow or today?fastest available storage  iops (world record)  latency (world record)  bandwidth (world record)  instant copy (world record)  STAC-M3 tests (world record)i/o that doesn’t wear down or wear out … easy adoption pathdebate the possible, or act & win now? 15
  16. 16. How do you guarantee that you can get the quote that isdriving your trade decision? Low latency Data Instantaneous Risk analysis trading back-testing cloning / restore Securities firms and hedge funds are looking for the fastest possible trade execution. Solution • Dell and Kove ran the STAC-M3 benchmarks and delivered the The high performance best performance ever in 94% of database solution provides the all tests. lowest latency, highest performance tick capture and • For instance, one improvement is market data analysis in the >33x the speed of the previous world best Theoretical P & L benchmark 16
  17. 17. The first step is to minimize latency in your existing infrastructure. Typical Mixed Feed Data Consumption with Deployment Framework and Multiple Internal Components Aggregated Market Execution Venues Data Feeds Direct Market Data Feeds Market Data Servers Routing & Execution Servers Feed Ticker Feed Handlers Data Cache Handlers Plant Time Series Analysis Complex Event Stream Framework Processing Framework Data Prediction Strategy Cache Engine(s) Engine(s) Historical Application Servers And Risk Compliance EMS / OMS / / OMS / EMS Data Cache Data Cache Reference Analytics Systems PMS PMS Data High Speed Physical Low-Latency Messaging Bus Network Connectivity Distribution Platform External Systems Servers and/or Server Grid Real Time Data Logical Component Processing Systems Distributed Data Cache Historical Data Store 17Source: TABB Group
  18. 18. How do I lower my time-to-market for new strategies while making sure thetesting is robust? Low latency Data Instantaneous Risk analysis trading back-testing cloning / restore Financial firms need real time access to historical data (i.e. 5 to 10 yrs on average) while running Quant analytics much faster to remain competitive Solution • An investment firm that takes Utilizing the high performance hours per Quant can reduce database solution, financial this interval to minutes while trading firms can execute also analyzing additional data back-testing of data in a reference points. fraction of the time it took in the past • Payback potentially in less than a few months. 18
  19. 19. Unified infrastructure helps vastly improve inter- andintra-enterprise communications and product innovation Primary Data Channels Market Fundamental News / Commentary Pricing / Reference VWAP / TWAP Yield Ratios Sentiment Indicators Complex Evaluation Derived Data Examples Volatility / Greeks Analyst Indicators Keyword Indicators Entity Relations Price Earnings Newswires Terms / Conditions Raw Data Examples Volume Balance Sheet Press Releases Corporate Actions Trades / Quotes Economic Web Content Entity Data FRONT OFFICE BACK OFFICE
  20. 20. The efficient use of limited risk funds is going to separate thewinners from the losers in the new era Low latency Data Instantaneous Risk analysis trading back-testing cloning / restore Securities firms and hedge funds are looking to make better informed trades that will greatly reduce credit, market and operational risk Solution • Dell and Kove ran the STAC-M3 and The high performance delivered the best performance ever database solution allows in 16 of 17 tests financial firms to run risk/compliance calculations • The market snapshot test was run in against a common pool with no just 184 milliseconds while taking performance penalty to other over 3.8 seconds for the nearest users competitor (nearly 21x improvement) 20
  21. 21. The requirements for calculating risk are becoming more complex at the same time as the update frequency is increasing Every order must pass pre-trade risk Credit and capital thresholds checks monitored Order Size Notional Value Credit Limit Committed Cap Client Orders Restricted Stock Executing Venues Executing Venues Executing Pass Venues Orders entered using Executing Prop Desk Broker’s MPID Exchanges Venues Orders Reject & ATSs Sponsored Access Orders Immediate execution reports to to surveillance personnel 21Source: TABB Group
  22. 22. Operational intelligence will be a trading tech buzzwords in a post-Knighttrading environments Low latency Data Instantaneous Risk analysis trading back-testing cloning / restore Financial firms need real time access capture of data that can be instantaneously backed up and restored, Solution • Dell, Kove & ParAccel recently Utilizing the high performance tested instantaneous back up and database solution, financial restore of fully cloned data trading firms can greatly • Results included a 6.7 PB/sec improve trade execution while snapshot, cloning the database in assessing counter party risk, microseconds with complete fraud and trading in real time. database spin up in <30 seconds 22
  23. 23. Proof of Concepts  remote  no equipment required test in remote lab via ssh login  on-site try-and-buy  use your own equipment xpd™ shipped to you test in your own environment 23
  24. 24. Q&APlease submit your questions via the GoToMeeting interfaceIf your question is not answered, please send to xxx and we will follow up.For more information: please contact Mark King at: Work phone: 203-840-1631 Mobile: 203-722-7919 John Overton Kove Mark King Dell Adam Sussman TABB Group 24