Looks like banks, brokers and financial companies are some of the largest CSCO customers: CCI, Chase, TV, Montgomery, ... Taking into account what has happened to their profits and stock prices lately, are they likely to continue spending $ billions $ on hardware? Perhaps they just scale down a little?
>> from CSCO webpage:
STRATEGIC SWITCHING
A trading floor with 2,000 trading and non-trading positions supported by at least two high-end routers, several low-end routers and many switches can cost more than $9 million, with a per port cost of $150, Zafrin estimates. "The more strategically placed the switches, the less routing you need," Zafrin says.
To meet networking challenges, many on Wall Street have taken the same route Fuji Capital Markets has and turned to Cisco, which dominates the market. Industry analysts say Cisco has an 80 per cent of the market, including financial services.
CISCO IN THE BIG ROOMS
Not surprisingly, Cisco has won some of the largest rooms on Wall Street. Some of the major financial firms are in Cisco's corner, one source says, including Salomon Smith Barney, Chase, Citibank and ING Barings, which is planning to use Cisco routers to support 450 traders at its new trading room in New York.
Bay Networks is Cisco's closest, though distant, competitor for local networking infrastructure. Reuters is a major Bay customer, deploying Bay switches in its High Performance Shared network (HPSN). The Securities Industry Automation Corp. (SIAC) has Bay routers, and SBC Warburg Dillon Read is also a Bay customer. Even devoted Cisco customers like Chase are hedging their bets by using Bay equipment as well.
Another vendor that's kept its hat in the ring: 3Com. But it's a very distant third with little penetration among major financial firms. Two firms that have voted 3Com: Salomon Smith Barney and Herzog Heine Geduld. Herzog recently purchased 3Com switches, hubs and bridge/routers for its 200 traders and salespeople. 3Com has also won contracts at Reuters and Bloomberg, both of whom use its products to deliver market data services.
One thing's sure, everybody's learning lessons the hard way. Wall Street CIOs and networking chiefs who told traders a few years ago that their networks would have a billion share volume capability have "certainly been called on the carpet now that the magic number has been reached," says Tony D'Ambrosi, director of integrated solutions for the MarketNet Group. The bottlenecks caused by the trade volumes have put trading system networks under great scrutiny.
To get themselves off the carpet, these officials are eyeing switched network solutions--especially those incorporating Layer 3 switches.
"There are switches with routing capabilities and routers with switching capabilities--they all do the same thing," explains Nick DeTore, a consulting engineering manager for Cisco's global operations division in New York. Most sites that have been using Layer 2 switches for the internal LAN and routers for Layer 3 transport will be keeping
an eye on the hybrid products to come, DeTore says.
CHANGING THE GAME
Users might be well advised to keep an eye on Layer 3 switch/routers, says Rick Bozzuto, chief information officer for IPC Information Systems, a New York-based turret and networking services provider. He says, "Layer 3 switching, which is routing at wire speeds, will have the ability to change the game." Adds MarketNet's D'Ambrosi: "The vendors that are providing Layer 3 switches are attacking the traditional cost per port of a router."
Whether users move to Layer 2 or Layer 3 switches, migration is a fairly smooth one, says D'Ambrosi. Users will be able to leverage the existing cable infrastructures and existing IP management strategies, such as Simple Network Management Protocol. "It's not nearly as disruptive as moving from a point-to-point [IBM] SNA network
to an open TCP/IP network. This is an evolutionary step," D'Ambrosi says.
But linking the new switches to older equipment, and the backbone of the infrastructure, is more complex, says Martone.
"You start looking at how to scale the network up, and get a lot of data up and down through the network from the core backbone, the market data backbone, the application backbone, out to the desktops," he says. "That's where it's not as straightforward. And there are a lot of options. You can look at 100Base-T uplinks, Gigabit
Ethernet or ATM (Asynchronous Transfer Mode) in order to really look at scalability and expandability."
BACKBONE CHOICES
The key is to make wise choices about the backbone, cautions Martone. "If you make a bad decision about your backbone infrastructure, in two or three years, you're going to be investing in new technology--more money to upscale your backbone," he says.
One way to avoid costly mistakes: test it internally. "Whenever you can, test it," says Andrew Bach, managing director for planning and development at SIAC--which supports trading at the NYSE, Amex, the National Securities Clearing Corp. (NSCC) and its affiliates as well as the National Market System. "The independent labs[used by vendors to benchmark their equipment] don't test exactly as it is in your environment," Bach says.
SIAC knows of what it speaks. It watched the volume on the National Market System triple and its network requirements rise from 290 kilobits/second to a minimumrequirement of 750 kilobits/second.
"We've done extensive performance testing of products, and extensive failure tests," Bach says. In fact, SIAC has tested all the 400 routers, 500 shared hubs and 50 switches that constitute SIAC's infrastructure. And not just for functionality, but for advanced interfaces, router protocol support and stability, as well. "We've spent a lot of time breaking equipment," he says.
Although he prefers not to give advice, Bach says SIAC will be taking a conservative approach when it comes to Layer 3 switches. The conventional approach of "switch when you can, route when you must" is "not something that we necessarily agree with," he says. In addition, SIAC has a hierarchy for redundancy, failover and security that is better suited to routing than the flattening that occurs with switches.
RAW BANDWIDTH
But other financial services firms are attacking the problem differently. Nationsbanc Montgomery Securities in San Francisco is moving much more aggressively, says Christopher Ranch, a senior communications engineer there. Ranch says the firm has seen huge increases in demand for bandwidth.
"Without knowing what applications are coming or their behavior, all I can do is throw raw bandwidth and switches at it," Ranch says. And that means throwing a lot of cash Cisco's way: "I just signed a major contract with Cisco Systems for Catalyst 5500 [LAN] switches," he says. That decision came after a nine-month review of products that came down to a short list of Cisco, 3Com, Fore Systems and Ipsilon, which was recently acquired by Nokia.
Ranch is wasting no time ripping out the firm's Cisco and Chipcom Fiber Distributed Data Interface (FDDI) routers. "I'm removing all of it," he says. "We've had some issues on the FDDI rings." |
