Andy Wachs awachsus.ibm.com

1
Where Will Linux (and Open Source) Live in the
Wall Street Enterprise?
Getting Down to Real Business in Financial
Services with Linux
Andy Wachs (awachs_at_us.ibm.com)
Linux Strategy IBM Corporation Somers, NY
2
Financial Companies Fertile Ground for Linux
Value?
Market Dynamics...

• Globalization
• Convergence
• eEconomy
• Regulation

...Not Just Any OS
IT Priorities...

• Efficiency
• Operational Resilience
• Simplicity
• Timely New Services

3
What is Linux

• UNIX-like operating system developed by Linus
  Torvalds
• Version 2.4 available
• Developed / tested by the Open Source community
• Highly disciplined / structured
• High quality
• Secure
• Stable
• Packaged and shipped by distributors
• Caldera (The SCO Group)
• Conectiva
• SuSE
• Turbolinux
• Red Hat
• Sun Linux
• Other regional distributors
• (Red Flag, Mandrake, etc...)

4
Linux Momentum

Linux will become the dominant server operating
system in the United States by 2005. Linux will
have a "breakout year" in 2002. Now it seems
clear that Linux has become a viable alternative
for enterprise use. By 2006, Linux will be a key
foundation for a strategic, cross-development-plat
form environment, accelerating Unix server
consolidation, while creating a powerful
alternative to Windows .Net
Linux CAGR 35
Stacey Quandt, Giga, Business 2.0, June 17, 2002
IDC, January 2002
2003 Linux surpasses Unix in server shipments
Gartner, May 2002
5
Linux Server Mix Projections

• Linux is moving to higher capacity systems!
• 4 and 6 way SMP systems are scheduled to outpace
  one-way systems by 2003.

• Rack-optimized and Linux-based Blade Servers are
  forecast to comprise a major part of the Linux
  mix.

Source IDC Server Market Quarterly Forecaster,
June 2002
6
Linux and the Customer

Linux Value Factors
Cost Effective
Reliability
Performance
Open Standards
Frequency
0
20
40
60
80
100
Customer Activity Evolution
Source IBM Market Research 2001
2000
2002
2001

• Firewall
• Print/File
• Web Server
• e-mail
• Network

• STC Clusters
• Infrastructure consolidation
• e-commerce
• Replicated
• (e.g Kiosks, in-store)
• Embedded devices
• Client in emerging mkts

• Commercial clusters
• Application consolidation
• General business applications
• Expanding client
• embedded apps
• (e.g. Telco network)

Source IBM Secondary Research
7
Linux in Financial Services

Workload Consolidation
Infrastructure Solutions
Linux Clusters
Application Server
8
Infrastructure Solutions
Optimized Servers for Specific Tasks

• Functions
• File/Print
• Web/Application
• Application dev.
• Content/Caching
• Security

• Advantages
• Low cost
• Highly reliable
• Turnkey
• Rapid setup
• Innovative packaging

• Infrastructure Software
• Open Source applications
• Application server middleware
• Database middleware
• Systems management middleware
• Collaboration middleware
• Eclipse Open Source ADE

9
Infrastructure Solution For Large European Bank


System availability check via WAP / Linux for
zSeries

• Linux based system management that combines
  WebSphere and Pervasive Computing integrated on
  the IBM eServer zSeries
• Through constant surveillance alerts system
  availability has improved resulting in improved
  customer satisfaction

Data- server
Mainframe
Web- server
App- server
D1/D2
WAP
WAP
PDA
Gateway
http
MP3000 (Linux on zSeries)
Laptop
Laptop
Linux on zSeries with WebSphere and WebSphere
Portal Server (App-Server, HTTP-Server) -
Portlet, Servlet - HVBInfo WebSite
Intranet Web- Server
Firewall
Laptop
10
Consolidate Workloads Across the Organization
Simplified Infrastructure with Linux

• Workload Consolidation
• Replace many with few
• Optimize assets
• Advantages
• Reduce costs
• Enhance reliability
• Use resources more efficiently
• Improve scalability
• Speed deployment
• Dramatically improve TCO
• Dynamically manage workloads
• Enabled across all IBM eServer series

11
Workload Consolidation in Finance

• Benefits
• Extreme Scalability via LPAR z/VM
  virtualization technologies
• No reboot required
• Remove network latency
• Significant floor space and labor savings
• Manage growing cost of s/w licenses
• Higher availability
• Administration savings

Gateways
DB2 Connect
Linux
Bank n
Web
WebSphere
CICS
Linux
Java Portal
Infrastructure
Hipersockets
User n
FP
Mail
DB2
Linux
Broker n
IFL z/VM virtualization
LPAR
z/OS
zSeries
12
Linux Clusters
Scale to Handle Complex Workloads Affordably

• Clusters with Linux
• Computationally intensive workloads
• High performance computing
• Horizontal scalability
• Linux-enabled cluster software
• Advantages
• Supercomputing performance at
• "mass market" prices
• Choice of eServer architecture
• IA 32, IA 64, or PowerPC
• Factory installed and delivered
• Pre-built/ tested/integrated configurations
• Services for rapid setup and install

Rack- optimized
Blades
13
Linux Clusters in Finance



2-256 Dual Processor Computing Nodes
32 Dual Processors Storage Nodes

• Benefits
• Increased price performance over incumbent Sun
  6800 servers
• Manage multiple parallel quantitative analysis
  with faster response time

Switch
Gigabit Ethernet
Master Node
14
Application Server
Affordable Integrated Solutions for Linux

• Solution Value-Net Vendor, ISV, Business Partner
• Extend e-business initiatives
• Vertical applications
• Address industry priorities
• Advantages
• High reliability and stability
• Open platform/foundation
• Speed implementation
• Maximize flexibility

15
Application Server in Finance - Example
Static Data Repository (UPM BIX)
Books Records
Downstream Systems
Movement System
Claims Processing
UPM Corporate Actions from Wilco International
Corporate Events, Parties, Securities, Tax, etc.
Positions Transactions
Movements, Claims Settlement Statuses

• Mission-critical application providing
• Proactive workflow for corporate actions
• Increased efficiency
• Minimized exposure to unnecessary costs and risks
• Flexible task driven processing
• Real-time STP automation
• Open interfacing capabilities
• Linux benefits
• Reduced costs
• High performance
• Ability to process on a variety of hardware
  options

UPM Corporate Actions
Client Notification, Confirmation Status
Update
Election Notification Reconciliation Data
Client Elections
Client Communicator Systems (e.g. Email, Fax,
etc.)
Agent Communicator System (e.g. DTC, SWIFT, etc.)
External User Interface (e.g. Web)
Key - Wilco Based Systems
- Client Based Systems
Please Visit Wilco in the IBM booth.
16
Application Server in Finance - Example

• Access Global Product Suite (GPS) consolidated
  security master is an enterprise mission critical
  application delivered on Linux
• WebSphere application server based
• DB/2 UDB database
• Consolidated security master is considered a
  foundation for straight through processing
• Automating global processing requires accurate,
  and reliable financial instrument data
• Centrally controlled data reduces transaction
  errors and excessive maintenance costs
• Linux implementation provides
• Scalability across a number of processing
  platforms
• Reduced operating costs

Please Visit Access in the IBM booth.
17
Is Linux Ready for Finance?

IBM Yes!

• Infrastructure
• a) Consolidation
• b) TCO
• Network infrastructure
• Trader/teller WS
• On-line brokerage
• Web banking
• Market data infrastructure
• Emerging operational resilience

• Linux Clusters
• for
• Computational
• Finance
• Risk management
• Portfolio management
• Institutional trading real-time analysis
• Emerging Customer value management (CRM
  application)

• Application
• Servers
• Back-office
• - Database
• - Account masters
• - Settlement
• - Securities
• processing
• - Core banking
• Institutional trading - Trade capture

• Branch Server
• (primary - Bank)
  
• Branch transformation
• Branch Bank applications

High-end transactional
e-infrastructure
Quantitative
Low-end transactional
Linux Technical Maturity
Mature
Improving
Becoming Competitive
Source IBM analysis
18
Is Linux Ready for Finance?
Fact Linux Scales

• Database - world record TPC-H benchmark
• DB2 v7.2 4 Intel 900MHz PIII Xeon processors
• 74 faster than the best Windows-based result
• File Serving
• PC Mag's file servers performance tests ... Linux
  with Samba
• significantly outperformed Windows 2000, 11/01
• Linux's throughput was 78 faster
• xSeries - record ECperf Linux performance
• WebSphere v4.03 9 node xSeries 330 cluster with
  2 x 1.266 GHz PIII processors
• Near linear scalability from 1 to 9 servers
• 86 of the performance 29 of cost of top
  HP-UX/BEA benchmark
• zSeries 12-way Server running WebSphere - Linux
  vs Solaris
• 12-way zSeries Linux partition 36-way (9 X 4
  CPU) Sun 420R servers at 100 utilization
• Linear scalability for multiple Linux instances
  and users

"We chose DB2 running on Linux based on its
stability, scalability and performance. There's
almost no end to DB2's advantages, which include
high efficiency, fast querying and search speed,
and the ability to store very large amounts of
data."
Dr. Napthali Rishe
Director, Florida International University High
Performance Database Research Center
19
Is Linux Ready for Finance?
Fact Porting to Linux is Easy

• Porting Solaris applications to Linux
• 80 of APIs are identical
• Less than 15 require simple translations or
  masks
• Less than 5 of APIs may require rework
• D.H. Brown
• Migrating UNIX web servers to Linux is one of the
  easiest migration scenarios in the industry.
• Some users and deployment specialists report one
  day or less time to migrate small installations.

"Several large projects of moving Unix-based
applications from 100 KLOC to 600 KLOC have been
completed. Most were completed in about two
months and only required a small percentage (1
or so) of the code to be modified in any way."
SoundView Technology Group
"Linux Momentum in Europe Appears to be Strong",
June 13, 2002
Source IBM Canada "Migrating Mail and Web
Servers to Linux", D.H. Brown
20
Is Linux Ready for Finance?
Fact ISVs Adopting Linux

21
Summary Linux in Finance
g

• Expense
• Increase operational efficiency by reducing
• cost from Internet infrastructure (e.g.. web
• server, Firewall, print/file....)
• Increase vendor flexibility and skills reuse
• Reduce operations support staff requirements
• Risk Management, Products
• Enable applications/analyses that were
• previously unaffordable (e.g. complex
• portfolio and risk analysis)
• Lower the price point for existing
• applications
• Organization, MA
• Provides a flexible base for rapid scaling,
• workload consolidation and integration
• Technology
• Linux Virtual Serving can provide a more
• manageable infrastructure than Microsoft
• Windows or Sun Solaris Server farms

• Implementation Scenarios
• Infrastructure Functions
• TCO
• Consolidation
• Linux Cluster for Computational Finance
• Application Server