Handheld Computers Powered by Windows CE Increase Efficiency, Profits for Largest U.S. Investment Bank

NEW YORK, December 8, 1998 — More than 20 Goldman Sachs brokers on the sometimes frantic floor of the New York Stock Exchange (NYSE) are now doing more with less due to the small Windows-CE based computers, tucked into the pockets of their pale blue jackets, that allow them to be approximately three times more productive.

The small computers run Windows CE 2.0 and have Symbol Spread Spectrum24 wireless network cards that allow the brokers to instantly send information – called a floor picture or “look” – to the Goldman Sachs computer system. Traders then use the information to decide what stocks to buy or sell on behalf of the company’s numerous individual and institutional investors. It’s a volume business, and the Windows CE-based units are increasing production. In short, these computers are tripling the number of “looks” each floor broker can perform each day from around 150 to more than 450 by cutting the time for each look from minutes to milliseconds.

“Previously, state of the art technology for capturing this information was pencil and paper,” said John Hewitt, vice president at Goldman Sachs, the largest investment bank in the U.S. “But the handhelds allow our floor brokers to not only capture the information but send it instantly. If we want to buy 500,000 shares of a particular stock it’s important that we know who else is buying and at what price; these units help us do that in a much more efficient way.”

Until the Windows CE-based system went live in September, the brokers had to write the information on small pink slips of paper, which were then taken by runners back to a Goldman Sachs booth on the NYSE floor and scanned into its computer system. In a business where seconds matter, the time saved from the smart use of technology can add up to millions of dollars.

Now, the floor brokers are using Casio PA 2400 units measuring 8 inches by 4 inches and weighing one pound – and they are getting envious looks from other floor brokers. A team of Microsoft consultants worked with Goldman Sachs to write the specialized code that allows floor brokers to enter the information into Goldman’s computer infrastructure. Information is entered using a stylus. Frequently used stocks can be accessed via an on-screen, pull-down menu. A few taps of the stylus capture the information. Another tap sends the information instantly to those who need it.

“The operating system inside these units is off-the-shelf technology – the same OS that’s used in our Auto PC and many handheld PCs,” said Mitch Prince, a managing consultant for Microsoft’s banking and brokerage team in New York who helped lead the Goldman implementation. “And that means it’s relatively easy to add on to the system and increase what it can do.”

The next step for Goldman Sachs will be full electronic trading, meaning the floor brokers will capture information electronically, but also take orders to buy stocks from the Goldman traders and confirm those purchases wirelessly using the Windows CE units.

“Right now there are waist-high piles of paper on the floor of the NYSE every afternoon, each of which could contain a trade worth several million dollars,” Prince said. “But if Goldman and other firms switch to handhelds, that paper will eventually disappear. Even without the paper, the firms and the NYSE will still have a clear electronic paper trail for stock trades, and that means fewer mistakes and better efficiencies. Ultimately, trading systems will be paperless because handheld PCs like these Windows CE units will eventually become the technology centerpiece for the way brokerage firms do business.” The Windows CE units plug into the NYSE’s wireless trading infrastructure. This infrastructure includes a network of 17 antennae across the 35,000-square-foot trading floor that make up a kind of mini cellular network, allowing any type of handheld PC to plug into the network.

“We want to ensure that brokers can trade wirelessly from any spot on the floor because the handheld units allow trades to be processed quickly, reliably and accurately,” said William Bautz, the Big Board’s chief technology officer. “Another advantage to capturing information electronically with these handhelds is that it provides a trail for analysis and audits of stock trades, something we call systemic order capture.”

Prince said the key to the project’s success was the early and frequent involvement of floor brokers in the process. The brokers even accompanied the Goldman team to the Microsoft campus while the code was being developed.

“We spent a lot of time studying the human factors and the business processes that are involved,” Prince said. “And this system is designed to work the way Goldman’s floor brokers work, so they look at it as something that makes their lives easier. Another key thing is that it’s very easy to build software on the Windows CE platform, meaning the result is a unit that’s small, drops into a coat pocket and lasts all day.”

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