London Stock Exchange platform acquisition ignites open source war of words

The London Stock Exchange in deciding to acquire Millennium IT, as its next platform technology supplier, has sparked a war of words about open source versus proprietary software in high demand environments.

The LSEis currently using a platform that runs on Microsoft .Net and SQL Server 2000 systems, on HP ProLiant servers and within a Cisco network architecture.

But that system, known as TradElect and built by Accenture, will be replaced by an open source-based system. Details remain unclear about the exact configuration of the LSE planned environment, but it is set to implement the MillenniumIT plaform by the end of next year.

The core MillenniumIT product, Millennium Exchange, runs on Linux and Unix environments with an Oracle database, rather than within a Microsoft architecture.

Last year the London Stock Exchange experienced a seven hour outage owing to a network software problem. Details of what went wrong remain unclear but CIO sister title Computerworld UK readers questioned the Microsoft software in place at the exchange.

“Designing a system of this magnitude to be run on Windows platform is, in my honest opinion, architectural idiocy,” one wrote as a comment. “That’s what you call ‘Experiencing the Wow!’”, joked another.

As news emerged of the LSE acquisition, IBM also waded into the fray. A spokesperson said there was a general “move to Linux” among stock exchanges, claiming that the LSE was one of the last large exchanges to use Microsoft .Net. But he declined to talk more specifically on the suitability of Microsoft systems in such environments.

“It’s a technology arms race, based around having the fastest reliable systems that can handle the biggest trading volumes,” he said. “A lot of the traditional players have built their own capacity and kept upgrading, but then a lot of those systems have now hit the buffers.”

Just three weeks ago, German stock exchange Deutsche Borse moved to Linux environments with IBM messaging. IBM was quick to point out that specialist electronic exchange Chi-X, one of the fastest exchanges in Europe, runs on Linux and is also adding IBM messaging under a deal announced today.

But Microsoft has defended its position, and immediately spoke out to detail its strengths as a supplier to exchanges with complex, high load environments.

“Microsoft continues to support some of the most demanding, mission-critical environments in the world and is constantly raising the performance bar with new solutions,” a spokesperson said.

“Most recently, Microsoft completed three different proof-of-concept projects for a major international stock exchange that demonstrate Windows Server 2008 and Microsoft .NET can successfully support very low latency trading activities, in the 100 microsecond range using standard 1 Gigabit Ethernet. With the addition of Microsoft Network Direct, that latency is further reduced by 50 percent, which is industry leading performance.”

Accenture declined to comment on the systems in place at the LSE, other than to say it continues “to have a relationship” with the exchange. Until TradElect is switched off at the end of 2010, the LSE will make £31 million worth of investments in the Microsoft-based system.