Open Source Slowly Gains Momentum on Wall Street
A growing number of financial services firms are embarking on open-source projects, but they are moving cautiously when it comes to mission-critical applications.
That was the consensus at this week's Linux/Open Source on Wall Street conference in New York. While it’s no secret that open source is here to stay, Linux proponents recognize enterprises' reluctance to fully embrace the platform, and are working to make it more scalable for applications that require sub-millisecond response times.
Support and legal indemnification also remain key barriers to wide-scale deployment of open-source applications, observers said.
Customers may be comfortable using Linux for infrastructure-type systems but less so for business software, said Monica Kumar, senior director of product manager for Linux and open-source software at Oracle. "Do customers have the same comfort level when it comes to applications, [such as] CRM [and] ERP? We don’t think so," Kumar said during a panel session at the open-source conference.
Venu Pemmaraju, senior investment manager at Intel Capital, which runs a venture fund that invests in open-source companies, agreed with Kumar. Pemmaraju, who sat on the panel with Kumar, said on the applications side, even ISVs are building applications that are mostly targeted at the Web and small and medium businesses.
"In order to get to the Wall Street level of acceptance, they need to have much more mature products, they need to have many more features that Wall Street wants," Pemmaraju said. "[For] large enterprises, I don’t think they’ve adopted open-source applications, but they are getting there."
The investment banking arm of New York-based Jefferies & Company Inc., is among organizations that have enacted open-source efforts but are doing so cautiously. Omer Soykan, senior vice president and director of investment banking technology at Jefferies, says less than 15 percent of his business unit’s software is open source. Those assets are primarily infrastructure-centric, such as Apache-based Web servers and Java-based applications developed with Eclipse. By comparison, 70 percent to 80 percent of the firm's software overall is based on the Windows platform.
"It's not an either-or decision," Soykan said. "At the end of the day, we are solving some business problem." Still, there's a reluctance to move heavily into open source, he added. For one thing, the organization must work to mollify its legal team's worries over potential liabilities of using open-source code. Also, support is still a concern: "We don't have an anti-open-source argument, we just are more cautious than with other [software]," Sokyan said.
The trading systems remain Sun Microsystems Solaris-based and are most suited for mission-critical applications, he pointed out.
Unisys, a large global provider of systems integration services, is finding that financial services firms are more aggressive than most in their acceptance of open source, notably Red Hat's JBoss middleware platform. Anthony Gold, vice president and general manager of Unisys' open-source business, sees a hybrid approach tying together both the Windows and open-source worlds.
From his perspective, Gold sees estimates that 50 percent of Unisys clients' JBoss engagements are on Windows and the other half are on Linux. His clients are using Linux and JBoss, with an equal amount gravitating toward the Windows/.NET platform. Typically, organizations are moving applications off Unix and other host-based systems.
"There are so many siloed environments inside a large organization, and the Linux stuff and the open-source stuff is easier to bring in," Gold said. "But there is a lot of Windows that people have had there, and so those environments are going to continue."
Meanwhile, the argument that open source isn’t suitable for mission-critical systems won't hold forever. For one thing, the Linux community is developing hooks into the kernel of the operating system that will give it real-time extensions.
Also, a consortium led by JPMorgan Chase and Red Hat are championing a middleware specification called the "advanced message queuing protocol," or AMQP. In development for over three years, it went public last June. AMQP has been implemented by the Apache project and will be released in a future Red Hat messaging middleware product.
The Apache solution, called Qpid, has support for Java and C++ brokers, with client support in C++, Java Message Service (JMS), Ruby, Python and C# for .NET.
"There are people actively developing the C# client over Apache," said John O'Hara, a vice president at JPMorgan Chase, leading the bank's effort in the AMQP effort.
At least for now, AMQP is a fragmented effort. While some key players are on board, including Cisco Systems and Credit Suisse, Novell, Microsoft and others are not. For its part, Novell has a licensing agreement with Concurrent Computer Corp., which provides the infrastructure for the SuSE Linux Enterprise Real Time stack.
Jeffrey Schwartz is editor of ADTmag.com and news editor of Visual Studio Magazine.