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December 2009

Tuesday, December 22, 2009

My Baby Has Grown Up

Posted by John Bates

20090625_7172 copy_2 I was proud to recently be appointed CTO and head Corporate Development here at Progress Software http://web.progress.com/en/inthenews/progress-software-ap-12102009.html. But I don’t want anyone to take that as an indication that I won’t still be involved with event processing – au contrair. Event processing (whether you call it CEP or BEP) is now a critical part of enterprise software systems – I couldn’t avoid it if I tried!!

But taking a broader role does give me cause to reflect upon the last few years and look back at the growth of event processing and the Progress Apama business. Here are some observations:

  • It’s incredibly rare to have the pioneer in a space also be the leader when the space matures. I’m really proud that Progress Apama achieved that. Our former CEO Joe Alsop has a saying that “you don’t want to be a pioneer; they’re the ones with the arrows in their backs!” Usually he’s right on that one – but in the case of Progress Apama, the first is still the best! Independent analysts, including Forrester and IDC, all agree on it. Our customers agree on it too.
  • It’s tough at the top! I had no idea that when you are the leader in a space, many other firms’ technology and marketing strategies are based completely around you. I have met ex-employees of major software companies that have told me that there are Apama screenshots posted on the walls of their ex firms’ development centers – the goal being to try to replicate them or even improve on them. Other firms’ marketing has often been based on trying to criticize Apama and say why they are better – so their company name gets picked up by search engines when people search for Apama.
  • Event processing has matured and evolved. Yes it is certainly used to power the world’s trading systems. But it’s also used to intelligently track and respond to millions of moving objects, like trucks, ships, planes, packages and people. It’s used to detect fraud in casinos and insider trading. It’s used to detect revenue leakage in telecommunications and continually respond to opportunities and threats in supply chain, logistics, power generation and manufacturing. It enables firms to optimize their businesses for what’s happening now and is about to happen – instead of running solely in the rear view mirror.
  • Despite all the new application areas, Capital Markets remains a very important area for event processing. Critical trading operations in London, New York and around the world are architected on event processing platforms. The world’s economy is continually becoming more real-time, needs to support rapid change and now needs to support the real-time views of risk and compliance. We recognize the importance of Capital Market. My congratulations to Richard Bentley who takes on the mantle of General Manager of Capital Markets to carry on Progress Apama’s industry-leading work in this space. With his deep knowledge and experience with both Apama and Capital Markets, Richard is uniquely placed to carry on the solutions-oriented focus that has been the foundation to Progress Apama’s success.
  • Even in a terrible economy, the value of event processing has been proven – to manage costs, prevent revenue leakage and increase revenue.  Progress announced our fourth quarter results today http://web.progress.com/en/inthenews/progress-software-an-12222009.html which saw a double digit increase for Apama and triple digit for Actional. Apama and Actional are used, increasingly together, to gain visibility of business processes without modifying applications, to turn business process activity into events and to respond to opportunities and threats represented by event patterns – enabling the dynamic optimization of business performance.
  • But one thing I do believe: that soon there will be no such thing as a pure-play CEP vendor. CEP is part of something bigger. We’ve achieved the first mission, which is to raise the profile of event processing as a new technique that can solve hitherto unsolvable problems. Now the follow on mission is to ensure event processing finds its way into every solution and business empowerment platform. It is one of a set of key technologies that together will change the world.

I wish everyone Happy Holidays and a successful and profitable 2010 !!!

Monday, December 14, 2009

Predictions for 2010

Posted by Giles Nelson

Last week we published some predictions for capital markets would evolve in 2010. I’d like to say a bit more about them.

Firstly, we predict there will be a big uptake of the use of technology for regulatory compliance and enforcement. Whilst the turmoil of the last 18 months was primarily caused by the over-the-counter, credit derivatives market, the effects of increased regulatory scrutiny are being felt throughout the trading industry. The power and authority of regulators has been bolstered, exchanges and alternative trading venues understand there is a greater need to monitor trading activity, and brokers and buy-side firms want to monitor and control their own and their clients’ trading activities better. There has been a significant debate in the media in the last few months on the merits of high frequency trading and variants of. This started in the specialist trade media, then made it to mainstream news outlets such as the BBC and it has been a topic deemed sufficiently important to be discussed by members of the US Congress and the British government. This has resulted in pressure on market participants to really up their game as far as trade monitoring is concerned. So how will technology be used to better enforce regulation and control over trading activity? Let’s start with the liquidty venues – the exchanges, the MTFs, the ECNs and the dark pools. Regulated exchanges in advanced markets generally do real-time monitoring of trading activity already to spot patterns of market abusive behaviour. They will need to continue to invest to ensure that they have the technology that can scale and be flexible enough to evolve with  changing patterns of trading behaviour. In contrast, exchanges in emerging markets do not often have adequate monitoring systems. This will change – we’re seeing substantial interest in Apama for exchange surveillance in less developed markets.  At the other end of the liquidity spectrum, the regulation around dark pools will change. It is likely that there will be limits imposed on the proportion of stock that can be traded through dark pools and operators will need to to disclose more information. Furthermore, regulators will insist that dark pool operators prove they have adequate monitoring systems in place. It won’t be just a paper exercise – they’ll have to prove it. Brokers will be in a similar position. Each participant in the trading cycle in the UK, for example, has a responsibility to ensure that the market is working fairly. The UK regulator, the FSA, is putting pressure on brokers to show that they have proper trade monitoring technology in place so customer and internal flow can be understood better.

Let’s move on to hosted services. “Cloud computing” is certainly a term du jour. What does it mean for capital markets? The first thing to say is that cloud computing, as in the provision of hosted software and computing resources, is a very familiar technology concept in capital markets, even though until recently people may not have used the term “cloud computing”. Anyone using a Reuters market data feed, or passing over orders over FIX to a broker, or accessing a single bank foreign exchange portal, is accessing services in the cloud. In fact electronic trading relies to a great extent upon cloud services. In 2010 however, more hosted services of a richer functional nature are going to become available. Instead of just building blocks – the market data, the DMA access etc. – more services will become available for algorithmic trading and risk management. Brokers do offer hosted algo services already, but they are broker specific. An example of a hosted algo service is one we launched with CQG recently. These will mature and broaden their scope. These types of services are invaluable to mid-sized trading organisations who can’t, or don’t want to, build a whole range of systems themselves.

Lastly, our prediction about emerging markets. We’re seen significant growth this year in demand for Apama in Brazil, India and China. Brazil particularly, because of continued economic growth and market liberalisation, has led the way (for example, Progress has 15 customers using Apama in Brazil now). India and China are getting there. They have further to go in market liberalisation to fuel the demand for algorithmic trading, but to attract extra investment and liquidity to their domestic markets they’ll be left with little choice. Hong Kong is an exception – algorithmic trading is used extensively both by global and regional players and it provides a window onto developed markets that mainland China can learn from.

Capital markets will evolve quickly in 2010, as in every year. That's what makes it such an interesting area to work in.

Wednesday, December 02, 2009

How to Build an Algorithm

Posted by Chris Martins

Colleague Dan Hubscher, who is also a frequent contributor to this blog, can be found illustrating some of the capabilities of the Apama development environment's Apama Event Modeler in this Reuters video.   With our recent 4.2 release, we significantly enhanced the Apama development capabilities overall, as we have discussed in the blog previously. But Event Modeler's ability to empower the business user (e.g. business analyst) to create event processing applications like algorithmic trading represents a longstanding feature of the Apama platform.   Those interesting in seeing it "live", are encouraged to contact us for a demonstration The picture refers to a metaphor that Dan used in the video.