Two years ago, the Pacific Exchange realized that it was beginning to run out of processing power in its data center. It had a contract for 85 MIPS on an outsourced mainframe for its clearing and billing system, and the fast-growing options business was pretty close to using up all that capacity.
Last year the Pacific Exchange, which traded only options, was acquired by Chicago-based Archipelago a few months before Archipelago was acquired by the New York Stock Exchange. A few years earlier, Archipelago had acquired the equities portion of the Pacific Exchange and now it is all part of NYSE Group. Today, the Pacific Exchange and the Archipelago Exchange both operate under the name NYSE Arca.
“We needed to bring the processing in-house to have better control of the environment and to save some costs,” said Steve Hirsch, vice president for technology support, who ran the year-long project to move the exchange’s clearing platform off the mainframe and onto HP computers running Microsoft Windows Server 2003.
The exchange looked at several vendors to help it make the move and settled on Micro Focus, a Gold Certified Microsoft partner and a member of the Mainframe Migration Alliance. Micro Focus had the most complete offering in a version of COBOL that runs on Windows, along with a JCL engine and strong transaction integrity in its file sharing. It was a good choice, he added.
“They have done a phenomenal job and the support they provided during the migration was unparalleled,” said Hirsch.
The exchange had already settled on a high availability active-passive cluster for fast failover if one server goes down. It went live with operations at the end of April, just a year after starting the migration project.
Reducing Migration Risk Through Planning
Companies confronting the value of moving from mainframe processing to a less expensive alternative are often deterred by the risks of moving to a new platform. The exchange sought to reduce its risk by careful planning and thorough testing of its new system. It ran the new application in parallel with the old one for several months, but there were some pieces of it that couldn’t be tested in parallel without forcing duplication of entry on the user interface, which was not a desirable option.
Data migration is one of the key concerns during a mainframe migration to Windows and Microsoft SQL Server, said Frayne Sunahara, senior advisor at Micro Focus.
“This can be a monumental task if you don’t plan and execute the conversion correctly. Micro Focus has included tools and utilities for data migration making it easier for the customer. But the customer still has to identify data that needs changing,” Sunahara said.
The executives at NYSE Arca also believed that they were running a somewhat higher operational risk on a Wintel platform than they did on a mainframe but decided that moving to the new platform made sense.
“That’s a business decision – is this added risk of downtime worth the benefit? In our case we might be losing one, or maybe two nines off the five nines reliability of a mainframe in return for the cost savings and performance improvement from moving off the mainframe,” said Hirsch. The new system hasn’t been operating long enough to generate any metrics on uptime.
Greater Speed and Flexibility
On four-processor HP computers, the real-time clearing application runs three times faster than it did on the mainframe and the overnight batch processing of the reports and daily billing routines are 15 times faster. Plus, they can expand capacity by adding processors or servers at a modest incremental cost.
Microsoft Windows Server 2003 provides much more flexibility than a mainframe, added Steve Rubinow, CTO of the NYSE Group, Inc.
“One of the problems with a mainframe is you can’t subdivide it easily and remove cost. You have to utilize the big footprint. It’s like having a factory running at 25 percent of capacity – you are wasting money if you don’t have full utilization,” he said.
The clearing and billing system sits in the middle of all the processing at the exchange. It takes the results of completed trades and settles them, so its traffic is only a fraction of the hits that the transaction system takes, and a few minutes of downtime in the course of a year won’t be a problem.
Both the exchange and Micro Focus have learned a lot through the migration, said Hirsch. The exchange spent a lot of time designing the architecture in a way that no previous Micro Focus clients had required.
“The project took a year end-to-end, but I think it could be done much more quickly now, given what we have learned,” Hirsch said. “The design and testing was a real large component of the effort, and now that we know how to do that, future migrations could be accomplished more easily.”
Sunahara agrees that the next migration will be faster. “We know how to deploy the tools and how to use them to their best capability,” he said. “Micro Focus is also working on several analysis tools for these sorts of financial services migrations.”
Some programming techniques on the mainframe also present challenges to a migration, Sunahara added. For example, some mainframe programs are not precise in the allocation of storage, therefore, these techniques may lead to storage violations.
As a result of his experience, Hirsch could be spending a lot more time in New York, where the NYSE has many mainframe applications that could be moved to the faster, more flexible, and less expensive Microsoft Windows Server 2003 platform and SQL Server 2005.
www.archipelago.com
www.nyse.com
www.microfocus.com