Some of the busiest stock exchanges in the region have shown a preference for open source software as indicated by the number of installations of Red Hat, one of the companies providing open source solutions.
Red Hat said 10 of the stock exchanges in the region, including the Hong Kong Stock Exchange and the Tokyo Stock Exchange (TSE), join the NYSE Euronext and the Deutsche Boerse in using Red Hat for their mission-critical applications.
Other regional stock exchanges on Red Hat are the Singapore Exchange (SGX), The Philippine Stock Exchange (PSE), Lahore Stock Exchange (LSE) in Pakistan, and National Commodities & Derivatives Exchange (NCDEX) in India.
The North Carolina-based company claims that "over 50 per cent of the world's trading volume is powered by Red Hat."
"Red Hat's advanced and innovative open source solutions have become the trusted platform to power mission-critical trading applications. Stock exchanges in 22 countries across the globe, 10 of which are from Asia Pacific, are powered by Red Hat," said Dirk-Peter van Leeuwen, vice president, Red Hat Asia Pacific.
Mission-critical
Red Hat cited an independent industry report which explains why mission-critical systems, such as high-volume stock exchanges, can depend on an open source solution.
A 2011 Gartner report predicts that by 2016, open source software will be used in mission-critical software portfolios within 99 per cent of the Global 2000 enterprises. This is an increase from 75 per cent in 2010. Also by 2016, Gartner predicts that 50 per cent of leading non-IT organisations will use open source "as a business strategy to gain competitive advantage."
Singapore's SGX said it needed the open source Red Hat Enterprise Linux to power up its trading engine, SGX Reach, to be able to handle one million order book changes per second per partition, a capacity that is a hundred times that of the existing engine.
The SGX, which has almost 800 listed companies with a market capitalisation of S$901 billion (US$738.8 billion), has a trading volume of about 21.6 billion shares.
Improved results
In the Philippines, Red Hat is helping the PSE double its transaction volume with sacrificing system performance.
"Red Hat is easy to deploy, install and manage. We are really impressed with the performance of the solutions. Our transaction volume has doubled since the partnership started. The solutions offered have directly impacted on our ability to increase customer satisfaction. This augurs well for us as we foresee strong growth in online trading," said Tristan Gillego, officer-in=charge of the technology division, PSE.
The TSE, on the other hand, is not new to Red Hat. The TSE's derivatives trading system is running on Red Hat Enterprise Linux. The TSE is now also using Red Hat for its "arrowhead" next-generation trading system used for the auction trading of all of TSE's cash products, including stocks and convertible bonds.
"With our new 'arrowhead' trading platform and its millisecond distribution speeds, we have achieved a new level of technology innovation for Tokyo Stock Exchange," said Yoshinori Suzuki, senior managing director and CIO, TSE.
"The high performance, scalability and reliability offered by Red Hat Enterprise Linux, combined with Fujitsu's solid system construction and the services on its server platforms, have provided the technology advances necessary to meet our mission-critical system demands."
