New York, June 23, 1998 — By linking islands of information throughout an enterprise and bringing firms closer to their customers via the Web, Microsoft and its industry software partners are helping to revolutionize the way investment firms do business.
Wall Street firms, whose businesses depend on up-to-the-minute information and rock-solid operating environments, are rapidly adopting Microsoft technologies, platforms and tools. Data from The Tower Group indicates that the growth of Microsoft Windows NT Server in the securities industry during 1998 will increase a phenomenal 94 percent over 1997. Tower also estimates that Windows NT Workstation will become common on Wall Street desktops, with 1998 sales increasing by 123 percent over 1997.
Today, at the Securities Industry Association Information Management Technology Conference in New York, Microsoft, Hewlett Packard and MarketNet Group today unveiled a program designed to allow brokerage houses to migrate their trading floors to Microsoft Windows NT Server. The companies will open a Y2K test center in New York at Market Net Group’s headquarters featuring HP NetServer systems, MarketNet Group consultants and Microsoft software.
“We recognize that the Year 2000 problem is the most significant technology problem facing the securities industry, and we are committed to helping our mutual customers with this massive issue,” said Matt Conners, worldwide securities industry manager at Microsoft. “We’re very excited to be working with HP and MarketNet to help trading firms with their Year 2000 efforts.”
Microsoft and its partners are jointly developing an industry framework, Windows Distributed interNet Applications architecture for Financial Services (Windows DNA FS), that will help speed straight through processing and allow firms’ existing systems to interoperate with new technology. For example, Merrill Lynch, with $1.2 trillion in assets and annual revenues of more than $1.9 billion, is using Microsoft’s Component Object Model and Microsoft Transaction Server to allow brokers access to data stored in legacy systems. The data can be viewed via a Web browser from 25,000 positions worldwide – information delivered better, faster and cheaper using Microsoft-based technologies.
“The ability of COM to help us integrate our legacy systems into this new environment is allowing us to deliver our functionality faster than ever before,” says David Yeger, a vice president at Merrill Lynch. “This is the most flexible environment that we have seen to date.”
And it’s an environment that’s growing fast. International Data Corp. recently predicted that, in the year 2000, more than 49 percent of the 5.4 million new server software sales would be Windows NT Server. Many of those servers will, of course, have to interoperate with existing systems, a reason for the Windows DNA FS framework and a series of recent Microsoft announcements designed to help COM and MTS “talk” to other platforms. That also will help Windows-based systems communicate and exchange data with mainframes or Unix systems.
On the desktop, Windows also means an end to brokers being forced to use two workstations, one for trading, analysis and heavy number crunching, and a second for e-mail and word processing. In fact, International Data Corporation reported that NT Workstation outsold Unix 2:1 in 1997, selling 1.3 million copies compared with 660,000 for Unix – an increase of 80 percent over 1996 sales. And thousands of those workstations have landed on the desks of brokers at investment firms, including Paine Webber, Merrill Lynch, Smith Barney, Dean Witter, Paine Webber, Prudential, Charles Schwab, Fidelity Investments, Wheat First Butcher Singer and Piper Jaffray.
And that’s not all. Microsoft-based technology is being adopted by a wide variety of major financial services industry firms. For example:
First Union Capital Markets is moving to Windows NT Server Enterprise Edition for its trading floor. A 100-workstation project was rolled out in the past year and currently 80 NT Servers – for around 3,000 employees, including traders – will be installed by the end of the second quarter of 1998. The gradual implementation process is designed to ensure trading is not disrupted — and it’s working. First Union experienced a server hardware failure on one occasion-and none of the users on the system even noticed. First Union manages billions of dollars worth of bonds, securities and commercial loans every day, so up time is key. That’s why First Union chose Windows NT infrastructure with clustering capability. “Windows NT Server, Enterprise Edition, gives us the robust availability we need, it’s easy to manage, and it will scale as our business grows internally or through acquisitions,” says Sushil Vyas, assistant vice president in charge of First Union Capital Market’s Windows NT Server infrastructure.
Charles Schwab & Company, with $236 billion in assets and 3.6 million investors, has equipped its cost-center managers with an NT-based intranet system called FinanceNOW!, which enables employees to extract corporate financial data, massage and analyze it, and create reports for its 240 offices. The application has eliminated dozens of hours of manual data collection and hundreds of thousands of pages of printed reports that can now be viewed electronically by Schwab’s 10,000 employees. The system has already eliminated a time-consuming monthly report process and even allowed one manager to quickly find that $80,000 in expenses had erroneously been debited to his cost center. The system was installed for less than $100,000 in five months.
Reuters is using NT and its built-in Web server, Internet Information Server, to provide customizable feeds of news, quotes and financial information to various online brokerage sites in the U.S., including Citibank’s U.S. Investments Area, Quick & Reilly and Paine Webber. The system allows a brokerage firm to project its own brand to clients and use the data, news and transaction services supplied by Reuters. During the market turmoil of last October, Reuters NT Web servers powering the service got 1.4 million page views per day and around 7 million hits – which required about 60 percent of their overall capacity.
Prudential Investments, which manages $212 billion in retirement funds, annuities and mutual funds, has implemented a Windows NT-based Common Front End system that has led to savings of around $14 million per year in its customer call center – and cut average response times by up to 55 percent. The CFE system ties together information stored in a variety of back-end systems and presents a total picture of a customer’s portfolio either direct to the customer or to a call-center representative in a single desktop. Previously, staff had to check multiple screens to get the right data, and customers often had to dial a variety of 1-800 numbers to obtain correct information – a process that drained time and resources.
The Chicago Stock Exchange (CHX), the second largest in the U.S., uses an NT-based system. During the market turmoil last October – just one month after standardizing on NT – CHX set a volume record, processing more than 1,000 traders per minute, a crush that the NeTpower Sparta NT servers handled with ease. In fact, the CHX hasn’t had a trading system failure in a year, whereas 3-4 per year wasn’t uncommon on the old system.
TIBCO, a leading provider to the 400 largest Wall Street firms, announced in January that its server applications and middleware would be available on NT.