Manhattan, January 30-Blocks and moods away from the Jacob Javits Convention Center's LinuxWorld, there is a party going on in New York City's latte & aromatherapy West 20s, where, beneath a chic awning, the sidewalk sports a V-ray of night light that reads Dresdner Kleinwort Wasserstein. Those in the investment world know that the name does not belong to an avant-garde theatre group who yell at balloons. No, the party hosts are a global banking crowd and what they are celebrating is rather linked to the fates of those crowding into the Javits Center-developers, vendors now playing within the Linux/Open Source channels for profit, and investors staking out newbies who are likely to be next year's success stories.
Reason for celebrating: DrKW has gone Open Source. By the time we arrive at the party, the Financial Times has already picked up the story: "DrKW turns to open source code developers," and that announcement is promptly headlining news globally over the Web.
Dramatic news it is. In releasing something called openadaptor, DrKW this year became the first investment bank to turn to the Open Source code community for mission-critical software for the financial-services industry. The software itself has been used internally by DrKW since 1998. DrKW used it to deploy its equities derivative trading system. In this interview with Open magazine, Jonathan Lindsell, director of Dresdner Kleinwort Wasserstein, explains why the bank has seen Open Source in the light of real business opportunity, to be leveraged on a number of internal and external fronts: software excellence, name-branding as customer guardians, and as an added attraction for world-class developers to join its staff.
Q: How much of this is reality? Say I'm a DrKW customer seeking to access the code tomorrow. Where do I go and what do I get?
LINDSELL: Let's start with what you get, which is an adaptor that will deliver the information you need, such as trade confirmation, from our internal systems. This is provided, using traditional Internet-based protocols and security. Openadaptor allows the customer to then decide how to process that information. Openadaptor provides the standard building blocks to route the information to relational databases, messaging middleware (Tibco, JMS, MQSeries), or proprietary-system APIs. Openadaptor provides standard components for data translation, filtering, and exception processing. Anyone can download the openadaptor software and documentation from www.openadaptor.org.
Q: Many CIOs hesitate to have any spotlights on their banks' use of Linux, leave alone open sourcing code. Why did you take this step?
LINDSELL: We believe Open Source development improves the quality of software. Besides, we expect to see the gains much more quickly than what we could have achieved internally.
Q: What's your argument, then, for those who question the impact of Open Source on global banking?
LINDSELL: Given that all investment banks share clients and almost all worry about supplier lock-in, Open Source is crucial. It will allow us eventually to reduce the vast duplication of effort that takes place in each investment bank, which struggles to keep up with the technology needed.
Q: What has the feedback been like since your January announcement?
LINDSELL: Within two hours of the site's launch, we had our first commitment to contribute to openadaptor, which is somewhat of a record. Traffic's building nicely on the mailing lists, on openadaptor.org. We've had valuable feedback. We've had some people who found bugs and some contributions-a developer, for example, contributing an Ant build file. We've also received some interesting proposals.
Q: What are the licensing restrictions?
LINDSELL: We decided to make the availability of the source code as wide as possible from the outset. The license agreement is very broad. Commercial organizations are allowed to take the openadaptor and build products for sale. Organizations or individuals who enhance the product don't need to publish their enhancements.
Q: How is it being used internally?
LINDSELL: Over 70 applications use openadaptor. Right across the investment bank, in every line and across most operational areas. It happened naturally. We never forced anyone to use it.
Q: What kind of impact will "going Open Source" have on your internal staff?
LINDSELL: Many of the world's top developers see open sourcing as the future of software development. By releasing openadaptor, we think we're in a position to attract some of these developers to our organization.
Q: Does open sourcing help competitive ranking?
LINDSELL: We are one of the top investment banks in the world, but we have significantly fewer staff than, say, a Goldman Sachs, let alone Merrill Lynch. That means we see technology and speed of response as vital in our constant battle to get to the top. We must use technology to automate the whole supply chain.
Q: Does your Open Source launch start and stop with openadaptor?
LINDSELL: No. We're planning to release other parts of our technology into Open Source.
| BANKING ON LINUX AND OPEN SOURCE |
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Who's afraid of the big, bad bleeding edge?
The TowerGroup research firm's banking observers see IT spending on a new wave toward front-office technologies directed toward customers. TowerGroup's director of commercial banking, Rajeev Agarwal, has watched the banking industry go through technology cycles: the mainframe, online availability of information for client transactions, client/server computing, and now, on what he calls the "fourth wave," thin clients and everything stored on networks.
According to Agarwal, the key challenge
facing banks today is how to leverage the tremendous connectivity offered by the Internet and how to deliver products and
services using the Web. Meanwhile, computing operating systems will shake out where they may according to a bank's business goals:
"Banks have invested their money in applications. That's what important to them, not the platforms," asserts Agarwal. "Their first worry is the application. From there, they evaluate the platform."
Agarwal sees a platform environment in banking dominated by IBM and Sun. As for Linux? Linux is seen as ideal for specialized functions. Agarwal sees no use, though, in bemoaning an absence of Linux in core functions. "I really don't know why people are so hung up on the fact that Linux isn't there in core processing solutions."
Linux has made headway in the Net infrastructure/service level, in its use for printer and e-mail servers. That story could broaden, he adds, once more Linux applications come on board. When the financial-services sector spends its billions on technology, says Agarwal, it's important to see that the money goes toward tried-and-true applications, "but they are always willing to experiment."
Some players see Linux beyond the starting gates. Banking is talking Linux. On the operations side, says a software executive from Tibco Software, Linux is gathering steam. Tibco's technology enables the real-time distribution of information. Fred Myer, Tibco's chief marketing officer, says "Banks are not afraid of bleeding edge. Linux is better, faster, cheaper, than a lot of Unix systems out there today." The rumble has begun: "Banks intend to get way past proprietary systems that no longer provide high value,and they are open to looking at Linux as a way to do better, faster, cheaper computing than available from a lot of Unix systems." Case in point: "I was talking to a Web guy who wanted to buy two Web servers. He had a P.O. for two Linux boxes. Cost: $18,000. Similar hardware from a major Unix vendor: $45,000."
Tibco last year went beyond talking about Linux in a move toward Open Source. "You're talking to the company that digitized Wall Street," crows Myer. His pride is founded on fact: Tibco's TIB technology (its patented software that enables real-time information distribution) is a fixture in the financial-services industry. Lehman Brothers, for example, last year bought a data-delivery service from Reuters, and it is Tibco's software infrastructure that delivers information to Lehman's Reuters applications. Last February, Tibco decided to Open Source its Pragmatic General Multicast (PGM) software. Cisco Systems and Tibco codesigned PGM, which is software designed to multicast information over the Internet. The selling pitch is that PGM offers good performance and reliability in delivering data, voice, and video content. Open-sourcing PGM means programmers and content providers will modify and use it freely to develop a new class of apps combining data, voice, and video.
Of all industries, banking needs real-time, event-driven information. "The thing is, you need event-driven messaging across the Internet. Having this stuff is really
fundamental," says Myer. "We found it's a value-add to Open Source this kind of technology. What if you expect Ford to build a car, only to be told you have to buy the chassis from Chrysler and the latter goes bankrupt. Time and flexibility are at stake."
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| OPENADAPTOR AT A GLANCE |
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WHAT IS OPENADAPTOR?
It may be classified as EAI software; basically, an application linking different types of computer systems. The adaptor allows for code-free integration of one system to another.
WHO BENEFITS?
Bank customers who need to use a number of investment banks and who stand to gain from better market transparency and liquidity.
FEATURES
- 100% Java/XML-based software platform
- XML, JMS, XML, JDBC, RMI standards support
- Interfaces with Tibco and IBM MQ Series
TARGETED LINKAGE
Other financial service companies and large corporations. CollabNet becomes a coordination point for developing and testing the software via discussion forums, releases, and bug tracking.
SOURCE-CODE LICENSE
Modeled after MIT X license.
GETTING THERE
http://www.openadaptor.org
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