Archipelago moves to Sun to power electronic stock exchange

By Linda Rosencrance, Computerworld
28 February 2003

Archipelago LLC is migrating its Nasdaq-listed stocks from its current electronic communications network (ECN) to a new platform that runs on hardware from Sun Microsystems Inc.

Archipelago’s current ECN runs on “a pretty highly distributed Microsoft/Intel platform” with Windows 2000, said Steve Rubinow, chief technology officer at Chicago-based Archipelago.

Rubinow said Archipelago decided to move to Sun because the electronic exchange has been growing at a pretty healthy clip. “We needed things like scalability, reliability and high performance,” he said. “So as we were taking a look at our options, we felt we were more likely to get what we needed from a Unix platform than we would from the platform we were currently running on.”

He said Archipelago wanted a system capable of handling a 300% increase in trading volume. Archipelago’s daily volume has increased from 30 million shares in 1999 to 400 million shares today, according to a statement about the project from Sun.

Rubinow said that after looking at several vendors, the company decided Sun would meet its needs better than IBM or Hewlett-Packard Co.

The Archipelago Exchange’s new platform, which runs on hardware located in New York and Chicago, is based on a “handful” of Sun Fire servers, including Sun Fire V880, V480 and 4800 servers running on Solaris. Archipelago declined to say exactly how many Sun Fire servers are in use.

Although he declined to discuss the financial details of the migration, Rubinow said it was “relatively inexpensive.” Archipelago began moving its Nasdaq-listed stocks from its ECN on Feb. 14, and the migration is expected to be completed later this year, he said.

Sun spokesman Aaron Cohen said that while companies such as Archipelago often choose Sun as their technology partners, they prefer not to give up any competitive advantages by publicizing their decisions.

“Because the CTO or the CEO considers Sun a competitive advantage, they don’t want to let competitors know [what they’re doing],” Cohen said. “This is especially true in the financial services sector, where technology plays such a key role in the success of [those companies].”

Archipelago, however, realized that the deployment would prepare it for its next competitive play and thus was not reluctant to talk about its plans, Cohen said. He cited another reason Archipelago decided to migrate to Sun: the possibility of future virus attacks. “They were getting hit from all over the place, including [the] Slammer [worm], and Slammer can’t touch Unix. Slammer can’t touch Solaris,” he said.

Larry Tabb, an analyst at Needham, Mass.-based TowerGroup, said Archipelago’s decision seemed to go against conventional wisdom, which is good news for Sun. “We hear about people moving away from Sun. The significance of Archipelago moving toward Sun is that not everyone is abandoning Sun, because there are advantages to their high-end technology.”

In general, Tabb said, the core processing infrastructure of most firms is either on mainframes or Sun equipment. “Firms have found they’ve been successful with the reliability and scalability of Sun and Unix platforms,” he said.