Volume 8, Number 20 -- May 22, 2008

NYSE Euronext Trades Mainframes and Unix for Linux and X64

Published: May 22, 2008

by Timothy Prickett Morgan

As many a company has found out in recent years, merging with competitors in adjacent markets is a great way to build out the revenue stream and, if they execute well, even moreso for the profit stream if cost synergies can be identified and cuts made. When the very brick-and-mortar yet heavily computerized New York Stock Exchange bought the Archipelago online stock exchange in 2006, it was positioning itself for a more electronic future. And in 2007, the merger of the NYSE and Euronext exchanges brought together the two largest exchanges in America and Europe. It also created a mess in the data centers.

And the job of sorting through and straightening out the three different IT approaches and legacy environments used by NYSE, Archipelago, and Euronext has fallen on the desk of Steve Rubinow, chief information officer at the merged companies. It is a big job, and last week, Rubinow, at the coaxing of strategic partner Red Hat, gave the world a small looksee into what NYSE is doing in its data centers. To cut to the chase scene, NYSE Euronext is standardizing its platforms, and for the most part, that means moving applications to Red Hat Enterprise Linux.

The five exchanges operated by NYSE Euronext--including those two in the name plus NYSE Arca Options (formerly Archipelago), Liffe, Alternext--have operations on six continents, and span just about every platform you can imagine. The NYSE Euronext exchanges trade the stocks for over 4,000 public companies, which have a combined value of over $27 trillion. On an average day, the NYSE Euronext exchanges do a trading volume of about $141 billion, which is about a third of the world's trading volume and which is driven by the processing of billions and billions of messages each day--and milliseconds matter.

NYSE has used a mix of IBM mainframes and Tandem NonStop fault tolerant machines for decades, as well as a collection of AIX and HP-UX Unix gear from IBM and Hewlett-Packard. Archepelago was a poster child for the big data center build out that was targeted by Sun Microsystems, while Euronext had a collection of Unix and Linux gear. And according to Rubinow, NYSE Euronext is moving to a Linux platform as quickly and as completely as it can.

"We have had an interesting collection of hardware platforms," says Rubinow with a laugh, confirming that NYSE Euronext is indeed in the process of replacing its mainframe and NonStop machines with Linux, "not because these are not fine machines," but because the company sees its IT future looking a lot more like the infrastructure used by Web 2.0-style companies like Google than like its own past with mainframe and NonStop clusters.

Contrary to many reports last week, NYSE Euronext has not yet unplugged its last mainframe, and it is by no means through with its revamping of and building out of its IT platform in the wake of the merger of the three companies, which Rubinow says is a key part of the couple of hundred million dollars in savings that NYSE Euronext hopes to squeeze out of the mergers. (IT is but one factor in those savings, and Rubinow was not at liberty to say how much would come from consolidated and standardized IT platforms.) What he did say is that the trading systems that used to run on mainframes and NonStops as well as on a collection of HP-UX servers are being moved to a set of rack and blade servers using X64 processors and running RHEL and smaller number of IBM's Power-based servers running AIX.

Rather than use HP's Itanium-based and very scalable Integrity SMP servers to support its Linux workloads, NYSE has gone with clustered BladeSystem blade servers wherever it can and is using rack-style ProLiant servers whenever it needs more CPU, memory, disk or I/O capacity in a server node. (Red Hat said that one set of the NYSE Euronext workload was supported on 200 of HP's ProLiant DL585 rack servers and 400 of its ProLiant BL685c blades, both of which are four-socket machines that in this case are using dual-core Opteron processors from Advanced Micro Devices.) In terms of databases, NYSE used a lot of IMS and DB2 on the mainframe, and has a mix of databases on its new systems, with Oracle being the dominant supplier.

The company does not use server virtualization because of the "not insubstantial overhead" it imposes, according to Rubinow, but does use VMware products in its test and development environments because of the flexibility it allows for developers in terms of testing many configurations. The Archipelago systems are still predominantly Sun iron and Solaris, but some HP X64 machines and Linux have been moved in here, and long term, Solaris is probably out for this workload, too.

With IBM making so much noise about mainframe-based Linux, and presumably so much money from selling Linux for mainframes, the obvious question is why NYSE Euronext didn't standardize on mainframes running RHEL instead of X64 iron.

"That's not a bad question, and as you might imagine, IBM has been trying to encourage us to move in that direction." But Rubinow says that while the vertical scaling and on-demand features of the mainframe are appealing, just contrast this approach and its economics to the 1 million servers that support Google today. When a server at Google fails, it doesn't affect the uptime of the applications and Google tosses the machine in the garbage and brings a new one online. (Well, hopefully, they recycle whatever parts work and dispose of defective parts responsibly.) "There is a certain kind of appeal to this kind of flexibility," says Rubinow.

The economics also weigh in favor of the horizontal scaling, too, so long as the applications can be made to scale that way, too. The reason the mainframe persists--and will continue to persist--is that companies can't always spend the dough necessary to rework their legacy applications so they can scale in this manner.

For its part, Red Hat was positioned to benefit because its Linux runs on mainframes, Itanium servers, and X64 machinery. If a mainframe was used to consolidate X64 server platforms, a mainframe support contract costs many times more than an X64 server license, so Red Hat would make its money no matter which way NYSE Euronext went. And if it decides to keep some mainframes around--IBM still has some clout in the data center, after all--Red Hat will still be making money on its support while HP and Sun will be losing out.


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Editor: Timothy Prickett Morgan
Contributing Editors: Dan Burger, Joe Hertvik,
Shannon O'Donnell, Timothy Prickett Morgan
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