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November 2008

Wednesday, November 26, 2008

Adaptive CEP - A Prerequisite for CEP Success

Posted by Chris Martins

Further affirmation that low latency execution is not the only motivator for decisions to deploy the Apama CEP platform is found in a recent quote from Yann L'Huillier, the CTO of TurquoiseTurquoise is the London-based alternative trading venue that is using Apama for real-time market surveillance in a project that was managed by Progress Apama partner, Detica. 

In a quite interesting interview in InformationAge that speaks to the role of technology in jumpstarting the Turquoise effort to challenge the incumbents, L'Huillier explains "With regard to Apama and Detica, our thinking is that using a streaming engine with complex-event processing gives us a competitive edge, because we can change the way we read the market and adapt to the always-changing market conditions."

That has proven to be a common - and key - reason why organizations chose the Apama CEP platform.  CEP systems generally respond to conditions that they don't control, as the events are generated by external sources and the CEP system is monitoring what is happening via the events.  A successful CEP system must be adaptive, as the conditions that spawn the events are assuredly going to change.

The word "agility" has become hackneyed in the technology lexicon, but that really does describe the requirement.  As the Turquoise article suggests, it can be fundamental to competitive differentiation.  As a colleague recently noted to me, accuracy is as important as speed because without accuracy, technology merely accelerates the speed with which you get the wrong answer.  With the world changing as fast as it is, accuracy will be quite fleeting unless you can adapt quickly.

Friday, November 14, 2008

FX: A CEP Success Story

Posted by Richard Bentley

One of the questions that sometimes comes up in our meetings with prospective clients is "Why should I buy your whizz-bang CEP platform to do <insert use case here> and then build on top of it when I can go get a shrink-wrap app that does most what I want straight off?". Of course, this is a very easy question to answer: "If you can get an app that does what you want now, and you're confident it will meet your requirements as they evolve going forward, play nice with your existing systems, and the price is right, then why are you wasting time talking to us?". Marc Adler said as much recently with his comments on Risk Management systems, which were right on the money.

Of course, this answer is really an open incitement to the audience to start a discussion about what they really need - now and in the future - and often (more often than not in my experience) it is soon apparent that there is no app out there which will do all, or even most, of what they need - and extending a shrink wrap app to do that is often more work and pain, if it's possible at all, than building it themselves.

So here the salesperson will introduce the core value proposition of an open CEP platform; the ability to support existing and future requirements, to meet the underpinning performance requirements, the necessary resilience, to provide the connectivity, and - vitally - the tooling to allow the same vendor-supported and maintained technology to be applied to the client's constantly evolving needs, with rapid time-to-market. In short, the salesperson emphasizes the benefits of a more "strategic", platform-based approach to solving the client's short and longer-term requirements and - if the salesperson has done his homework and read his audience right - that one-size-fits-all shrink wrap approach is often consigned to the trash.

The nice thing about this approach is that there's no sleight of hand here; every word of the pitch is true.

Let's look at the use of Apama within Foreign Exchange (FX). We've blogged previously about how Apama is being used extensively for real-time FX rate Aggregation and algorithmic execution; just last week our latest client to go live - Standard Chartered - talked publically about their deployment of Apama for their FX spot dealing. We've built a Solution Accelerator to offer relevant but customizable connectivity, algorithms, monitoring and dealing GUIs out of the box. We've even won awards (ok, enough already!). However, although we're (clearly) not shy about trumpeting the power of our offering in this area, the more telling aspect of our deployments - and the aspect of relevance for this article - is not what clients do with our Aggregator; it's what they do *next*.

I was visiting one of our large Tier 1 banking clients in New York a couple of weeks back. They've been using Apama for FX Aggregation for nearly a year now. I walked through the door on to the trading floor and first thing I saw was 3 screens with - unfamiliar - Apama Dashboards on them. "That looks nice" said I (somewhat gormlessly). "Yes, it's our new auto-hedger - it uses the aggregated book feed from your Solution Accelerator and lays off our risk positions over your ECN connections according to a new algo we've built". All developed and running in Apama, extending our Solution Accelerator with new algos and screens - and all unbeknown to me!

I was somewhat more in the loop concerning the work of our friends at one of the world's largest Banks, who have been using Apama for FX Aggregation for well over a year, connecting to multiple liquidity pools to improve their execution. That bank has have recently launched a new FX pricing engine - built with Apama - connecting to their Apama FX Aggregator for real-time pricing, running analytics to derive per-client spreads for market making (similar to how I describe [here]). An auto-hedger is in the works - again extending the initial FX Aggregation deployment and based on the Apama CEP platform. And at least 3 other FX clients have either rolled out or are in the process of rolling out market making solutions as extensions of Apama FX Aggregation deployments (and those are the ones I actually know about!).

Moving beyond auto-hedging and market making, we have a growing number of examples of the benefits of a more strategic "platform" approach, such as Apama clients like ING in Europe taking FX feeds into their Equities Algo systems (also built on Apama) for cross-border spreads (locking in an FX rate as the third leg of the trade), prop shops engaged in currency forward / spot arbitrage, and clients like Louis Capital FX extending their Apama-based FX agency hedging their FX options trading. (As an aside, one the hottest topics for us right now in FX is the area of real-time Forward FX price streaming to large corporates - once the province of the very biggest banks - utilizing real-time volatility and depth of book analytics ...)

The power of the more strategic approach enabled by CEP platforms like Apama, armed with the out-of-the-box connectivity, performance, resilience and tooling, to meet client's current and future needs, is nowhere more ably demonstrated by our experiences in FX.

Wednesday, November 12, 2008

Apama & CQG - Partnering for Low Latency Futures Execution

Posted by Chris Martins

The 24th Annual FIA Futures & Options Expo took place in Chicago this week in and we used that venue to announce an Apama partnership with CQG.  A quite significant player in the Futures trading market, CQG offers real time quotation, charting and technical analysis tools. Via this new partnership, CQG users can now automatically execute trades that have been signaled from within CQG's technical analysis models, leveraging algorithms that are offered via the Apama CEP platform.

A key element in the partnership is the deployment model.  Apama is being hosted in the CQG infrastructure such that their users do not have to install Apama locally in order to access the benefits of the integrated offering.  They can select and parameterize the execution algorithms via Apama dashboards and gain very low latency execution through CQG’s co-located facilities at major global exchanges.

Deals like this signal the growing interest in Apama. Part of the appeal is the flexibility of the underlying Apama CEP platform (and its supporting tools).  That flexibility encompasses different asset classes, the different application use cases that are needed to support those asset classes and, as is evidenced here, different deployment models. 

Shown below is a CQG screen, with the Apama dashboard component highlighted.

Cqg_screen

Monday, November 10, 2008

Apama Capital Markets Framework

Posted by Chris Martins

There can be a tendency to presume that CEP’s early adoption in Capital Markets has been predicated solely on the performance characteristics of CEP engines. Though performance is clearly a key attribute for these systems, it is far from the only determinant of success. Apama’s success has been equally attributable to having a strong understanding of how to apply CEP to specific Capital Markets requirements.  That is backed up by a reservoir of experience – within both the Apama engineering team and the field organization – that knows how to apply that experience within deployments.

The Apama commitment to this approach is exemplified by our recent announcement of the Apama Capital Markets Framework. Over the year, we have announced a series of Solution Accelerators that focus on specific Capital Markets application areas and extend Apama with features that “accelerate” the speed with which our clients can deploy applications in those areas. This approach belies the “feeds and speeds” myopia that often dominates discussions about CEP, both within Capital Markets and without. Yes, Apama is fast – certainly the equal, if not the superior, to other products in the market. But all the speed in the world is of little use if your application is still under development. The speed of developing the application is equally important and it is a mistake to consider the effort to bridge the gap between the power of the underlying engine and a solution to the customer as just a “simple matter of programming”. Thus, Apama devotes considerable time and energy on both development tools, as well as our solution accelerators, to faciliate the speed with which our customers get to that end solution.

And while we note that others are beginning to follow our path with their own "solutions", the new Capital Markets Framework takes this approach further. Apama is effectively providing a solution-focused framework for the ongoing enhancement to our existing Accelerators and the creation of new ones. This is more than just marketing lip-service - not that we ever do that anyway :-)  There is a substantive engineering commitment to the CMF and its Accelerators that truly capitalizes on the Apama experience with the use of our technology to address real world use cases.

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Ii_logo As a bit of further evidence that Apama’s presence in Capital Markets is substantial, let this blog posting also briefly acknowledge that Apama co-founder, Dr. John Bates, was recently recognized by Institutional Investor as one of thirty financial technology providers that are critical to the success of the financial markets.  The publication describes CEP as a "critical component in algorithmic trading systems for analyzing and acting upon vast quantities of market information."    While that statement is true, the potential for CEP in Capital Markets extends far beyond algorithmic trading.   And that is why the Capital Markets Framework will be a key component of Apama's efforts going forward.