Wall Street Won't Share the Wealth, But It Will Share the Code
Wall Street isn't the most magnanimous of places. In fact, several thousand people continue to Occupy Wall Street in protest of its inability to share what it has with others. But NYSE Technologies is happy to play against type.
Wall Street isn't the most magnanimous of places. In fact, several thousand people continue to Occupy Wall Street because it won't share what it has with others.
By abandoning the profit motive and moving to open source its code, NYSE Technologies aims to make even more moneyBut NYSE Technologies is happy to play against type.
NYSE Technologies is the IT division of NYSE Euronext, the company that operates the New York Stock Exchange and various other exchanges across the globe. In essence, it provides tech services to the financial outfits that use these exchanges — investment banks and hedge funds and other trading firms.
For years, it has charged these companies to stream market data through an online interface it calls MAMA (Middleware Agnostic Messaging API). MAMA has been in use since the middle of the last decade, letting banks and funds tap into an NYSE software platform that streams data from more than 200 global markets.
But on Monday NYSE Technologies abandoned the profit motive and open sourced MAMA. The idea is to create a standard interface for all market data services, so that even the smallest financial institutions can play the markets more easily. The open source incarnation is known as, yes, OpenMAMA, and the hope is that it will be adopted by other outfits streaming market data in much the same way, including Reuters, Bloomberg, Active Financial, and SR Labs.
"We want to create a community around open and common standards so that we can driving the cost and friction out of global trading," NYSE Technologies CEO Stanley Young told Wired. "At the moment, it's a very fragmented, very complex, very costly place to do business — especially if you're a fund manager sitting somewhere in the Midwest and you want to execute trades on 100 exchanges across the world."
It's a common message from Young and company, who seek to streamline the trading game in more ways than one. Yes, the company realizes that many will greet this message with a healthy amount of skepticism. To boost credibility it's linking up with the Linux Foundation, the nonprofit consortium that has backed Linus Torvalds' open source operating system since 2000.
But the larger point is that in open sourcing MAMA, the IT outfit plans to make even more money than before. If more firms are trading and trading more frequently, this can only benefit NYSE Technologies — and its parent company. "But we have a broader commercial strategy" says Tony McManus, NYSE's global engineer of enterprise software. "We see this as an opportunity to drive more of our products to more customers."
Though Wall Street isn't known for open sourcing its own software, it has been using existing open source software — most notably Linux — for years. "This misconception about Wall Street is that it's conservative, that it would be the last industry to do this kind of thing — but it's really the opposite when it comes to technology," says Linux Foundation Executive Director Jim Zemlin. "Wall Street finds ways to innovate — and fast."
Tony McManus tells us that NYSE is already in discussions with some competitors, but he declined to say who. The open source effort is already backed by such names as JP Morgan and Bank of America Merrill Lynch, and McManus envisions such institutions building their applications based on the API (application programming interface).
"If we open source, it gives our customers, our partners, and other vendors an entry point into our platform, but it's also an entry point into their platforms as well," he says. "That removes a huge amount of friction and a huge amount of cost on the customer side, because it lets them to plug into a single API that accesses contents from multiple sources."
It's an idealistic pitch. But Jim Zemlin says it makes perfect sense, comparing the NYSE Technologies to the IBM of a decade ago. "When IBM entered the Linux business, people asked why. IBM had spent a lot of money on — and charged a lot for — operating system software," he says. "But IBM realized it could innovate at a higher level. At a certain point, you realize it's in your best interest to share a certain amount of your technical stack with your peers."
And you realize it even if you're on Wall Street.
Photo: Bryan Derballa/Wired.com
TopicsapisEnterpriseLinux