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How to do financial trading IT right: Behind the scenes at Liquidnet

Matthew Heusser | July 3, 2013
With massive amounts of data, low latency, hundreds of connection points and no margin for error, financial trading is grown-up IT. Liquidnet does it in more than 40 markets with a staff of just 300. Here's how the company makes it work.

It's time to meet Phil Pactor, head of Enterprise Technology Services, which covers the IT department from support to operations and server setup.

Phil Pactor sees the advantages in cloud computing as decreasing time to add capacity and new features.

Pactor agrees that traditional software pushes to clients are increasingly problematic. That's why his team is moving toward a remote model, where clients use remote desktop to access software running on a terminal server. Liquidnet controls and administers that single machine; if a patch is needed, Liquidnet can do it without ever touching the clients' machine.

The idea is fairly new, and some clients still want the desktop app, but that kind of thinking is improving the company's ability to push new versions of the software with less risk.

Another question on my mind concerns the spikes in demand that Liquidnet must see. The company is constantly opening new markets, with new customers, and the stock market isn't exactly known for being predictable. Is Liquidnet considering cloud technologies?

"When we start to [talk] about the cloud we need to be a little more specific because people think of different things," Pactor says. "The first thing that springs to mind for many people is the public cloud, the Amazons. That might be in our future, but right now, the main project is the private cloud. How can we scale as the amount of transactions and trading partners continues to grow over time? We want the flexibility to expand or contract horizontally without the delays of new hardware."

To do that, Pactor continues, Liquidnet needs to maintain some excess capacity-up to 2.5 times expected trading volume-while quickly growing using commodity hardware. "We try to build out that headroom. The time from a project being announced to the need is about one-quarter of what it was five years ago. Today we can slot in CPU and memory very quickly with generic hardware. It's days, not weeks. Provisioning servers still requires some human intervention, but we can get a lot done with scripting tools like Python."

Pactor doesn't rule out the idea of using public cloud services, but he points to the sheer amount of scrutiny around access control, intrusion detection, audits and physical security as reasons to look at the public but not plan for just yet. His main pushes for an internal cloud, meanwhile, are less to prepare for a public future and more to speed up the software teams while decreasing time to add extra capacity.

After talking to Pactor, I discuss leadership theory with Moss over lunch-he's for small teams and loose standards built by coalition-and for the day. I return to Liquidnet for WOPR but expect that my time talking to folks at the company is up.


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