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London Stock Exchange dumps Windows for Linux

When it comes to business computer systems, nothing is more mission-critical than the massive trading software systems that underlie stock markets. A failure of an hour here can mean billions of dollars of lost trades. The LSE (London Stock Exchange) learned that the hard way when their .NET/Windows Server 2003 trading platform died like a dog early last September. The new LSE management is not going make that mistake again. This October, the LSE purchased MillenniumIT and will be switching its stock exchange programs to the company's Linux-based Millennium Exchange software.

I saw this move coming. While the LSE never officially announced that its Windows and .NET stock trade software TradElect was the root of its September failure and perpetually slow performance, it was an open secret in the City -- London's equivalent to America's Wall Street -- that that was the case. Indeed, it was this technology flop that lead to the LSE CEO Clara Furse leaving the Exchange in July. The new CEO, Xavier Rolet, immediately decided to get rid of TradElect and started shopping for other platforms.

Friends of mine in the City tell me that the LSE immediately started considering a Linux-based solution. It doesn't take a genius to see why. The world's fastest stock exchanges, like New York's International Security Exchange, run on Linux. In a world of high-frequency trading where a millisecond really can mean the difference between profit and loss, stock exchanges can't afford to be slow, never mind actually going off-line.

The platform itself is built primarily on Linux, but Solaris and Cisco networking also play important roles. The back-end database engine is based on Oracle. The LSE expects to see transaction speeds drop from a claimed best speed of 2.7 milliseconds -- which was rarely, if ever, seen under TradElect -- to the Linux solution's claimed 0.4 millisecond speed.

It wasn't just raw speed though that brought the LSE to Linux. Linux is cheaper, a lot cheaper, for high-end servers.

According to an IBSJ report, David Lester, director of information and technology at LSE, said that compared to the annual bill of $65 million for TradElect, MillenniumIT was a bargain at a purchase price of $30 million. The LSE predicts that moving to Linux will give the company an annual cost savings of at least £10 million ($14.7 million) from 2011-12. In addition, "The new technology is a lot lighter, nimbler and easier to install" and will also enable faster releases.

The LSE hopes to close the deal this month. The transition from TradElect to the MillenniumIT is expected to take up to 18 months. Lester hopes to get it completed faster than that.

In the end, the LSE and its traders will profit from this move. As Steve George, director of corporate services at Canonical (the company behindUbuntu) told me when we talked about the deal. "When performance and stability matters, as they do in business, Linux is the positive choice. This move will be good both for the LSE and its customers and to the wider family of Linux."

What People Are Saying

Real-time questions

1. Any real-time systems based on Solaris and HP ZLE? If so, how are they doing?

2. Anyone have experience with Sun's Java Real-Time System? Does it work?
http://java.sun.com/javase/technologies/realtime/index.jsp

No real time java used

In stock exchanges, no real time java is used. Instead you make sure that garbage collection is never triggered. You allocate lots of objects in the beginning and reuse them. Never create new nor dispose old.

India to repeat the mistakes committed by London Stock.

India to repeat the mistakes committed by London Stock Exchange.

India is going to issue id-card to all citizens (more than 1 billion) will require HPC, much more computing power & reliability than required by LSE. The platform that will be used is the same used for London Stock Exchange. LSE learned it the hard way and correcting the mistake by migrating to Linux.

This Indian project is given to to Infosys, effectively the project will be Microsoft + Infosys like LSE's Microsoft + Accenture.

Infosys Like Accenture uses only MS technology (non open standard)

Attributes of this Project should be:

HPC OS Platform :
Linux, Linux, Linux...

Application :
Custom designed application following all open standards (w3, HTML-5, ODF, .pdf, .png, .ogg ...). (no vendor lock in).
(all the source code will under control of India).

Hardware :
High performance cluster Hardware.

Vendors:
Any company(s) that is expert in the above deployments, Like IBM, SUN, Redhat, Oracle... etc.
(None of Microsoft proxies.)

If the India does not learn London Stock exchange example, this Indian project is Doomed to be a failure for its choice of platform.

Vinod Raghavan

Trend Spread

First NY and now London - those are the two "biggies".Wouldn't be surprised to see this trend spread? and if the big money groups are going Linux, plus many of the big companies, what does that say for Microsoft's future? I'd say it's looking kinda bleak right now.

Clara Furse

One poster here commented:

"I guess the saying "Nobody got fired for buying Microsoft" doesn't apply to the critical computer systems at the London Stock Exchange."

I thought that was cool, and was going to refer to it on Groklaw. I am assuming the poster was refering to your comment:

"it was this technology flop that lead to the LSE CEO Clara Furse leaving the Exchange in July."

refering to the failure of TradeElect.

I traced back your post, then to the post on the Guardian you refer to. However reading the Guardian announcement we only see:

"An LSE spokesman insisted that the decision to replace Furse as chief executive was "completely mutual" and an "entirely planned succession process"."

Also we see:

"What Lady Furse didn't do was to take London to the world and to bring the world back to London."

While it seems logical that the failure of TradeElect was something that caused the London Stock Exchange to replace Clara, there does not appear to be a hard link between the two. If there is any report that clearly links the two, it seems that it is only fair to clarify that it is your opinion that the failure of TradeElect lead the London Stock Exchange to let Clara go.

Respectfully,

Sam

Article has a lot of

Article has a lot of personal thoughts, misinterpretation of the facts and also ignorant comments... like: Furse resigning because of an outage (all exchanges have outages, they are just not as exploited by the media, presumably because others haven't chosen such a heretic platform); 2.7ms which was "rarely seen under tradelect" (probably a comment the guy heard in a pub from some trader based in Frankfurt - just round trip time to Europe would eat milliseconds, that's not the exchange's fault); exchanges quote latency firewall-to-firewall, you only get this number if you are in close proximity to their datacenters.

I am not sure Microsoft would have been such a bad choice today; it certainly was 5 years ago, but .Net or Java are bad choices for this domain regardless, as ultimately you would not be able to sustain microsecond latency unless you take control of all stacks -- including memory management and network drivers, and this implies using C and C++; linux buys you time as you can tweak things as and when you please.

The biggest lesson out of this monumental screw up is that one should never outsource the development, support and operations of one's core systems. The LSE chose MS, but let's not forget who sold the solution.

I agree there are from time

I agree there are from time to time outages in various components, but as the systems are designed in a high available way, these outages have, or should have, no impact.
If they do have impact, which also happens, they can be resolved in a very short time.

With the Microsoft system, there were some single point of failures in the design, so it was not completely HA, and this is what happened earlier.
Because of the architecture, these SPOFs could not be resolved.

Sub millisecond delays are perfectly achievable, and is actually a requirement for brokers, as it is a huge disadvantage to have delays.

There is a reason why your 20Mb/s broadband connection at home is sometimes 100x cheaper than a "professional" 1Mb/s connection: delay.
Adding speed is very easy, removing delay isn't.

Offcourse, a Microsoft TCP stack, is quite notorious for introducing a huge delay. Other platforms, like Linux, can actually work much faster, i.e.: Real-time (Not the default kernel, but there are patches for a real-time kernel.)

Because Linux and all of its components are open-source, it means you actually DO have control of all stacks and memory management, not just "buying some time" as you say.

Further more, the system was actually implemented by Microsoft themselves, and even they couldn't get it to work as designed/required. So it would be very stupid NOT to move away from it.

I think you are a Microsoft fanboy with no real life experience and enjoy spreading FUD when other people have good reasons for avoiding Microsoft software.

Not sure where things got

Not sure where things got mixed up, but "buys you time" refers to the fact you can tweak anything you want without having to wait for MS to send you a patch. As for the other comments on SPOF, Microsoft TCP stack, who developed the system etc, that just shows your ignorance. If their design/code was flawed, that has nothing to do with the OS; the same outage would most likely have happened on any OS (a "life experienced" person such as yourself would know that the same code running active-active would probably crash at the same time on both sites depending on the nature of the bug or environment config.) Accenture designed, built, and implemented the system, not Microsoft. Whether the TCP/IP stack on Windows is or was notoriusly bad is irrelevant, as today you wouldn't use it for low latency apps anyway. In any case, for this type of system you can't beat linux in the back-end simply because you need to extract as much juice as possible from the hardware, and that implies complete control of the whole stack.

I'm nervous

My 401K provider uses .aspx technology :-(

Will this case study be updated now?

I wonder if Microsoft will update their web page and case study?
Web page:
http://www.microsoft.com/uk/getthefacts/lse.mspx

Case study:
http://switch.atdmt.com/action/FY07_Linux_LSE_Download

(Somehow I imagine this will fade from existence...)

Dan