Arguing that it's time to drive down the cost of adopting FIX-messaging technology to make the electronic standard affordable to small buy-side firms, Sun Microsystems and B2Bits--a London based software house--are testing a pre-loaded FIX hardware and software with buy and sell-side customers for a monthly rental fee.
The concept is about providing a single utility that meets the needs of the most demanding customers from a performance perspective to the smallest fund managers while minimizing the barrier to entry for electronic trading via FIX.
It is predicated on the view that sending and receiving FIX messages should be priced like a commodity, contends Robert Woodmansey, chief executive officer of B2Bits, who spoke at last week's Wall Street On Java Conference in New York City, on a session titled: "Enabling Automated Standards-based Financial Market Connectivity.
"These FIX messaging tools should be like washing machines and tea kettles," says Woodmansey, who blasts rival FIX-engine vendors for selling software licenses that cost hundreds of thousands of dollars.The service--dubbed FIX RAQ Bundle -- is based a flat-fee, subscription-based model and works with all current (4.0 to 4.3) and future versions (4.4 and higher) of the FIX protocol.
Users do no pay a software license fee and "there is no upfront money to be paid," says Woodmansey. "The objective is to bring the price down to a level where everyone can afford to be FIX-enabled. Woodmansey tells WST in a subsequent interview.
Sun is charging $2,500 a month for the bundle including 24 by seven telephone support, software support and financing options, according to Sun's Nigel Woodward, worldwide manager, capital markets and securities. In addition, the flat fee comes with automated testing and regression testing, so that firms can test connections or decide if they want to make a change in their order-management system or message handling. This usually costs a lot of money when FIX vendors sell the testing separately, says Woodmansey, who notes there's also a discount for firms that need additional servers.
In B2Bit's case, the FIX bundle software resides on two LX/50 boxes--Sun's entry-level server with Linux as the operating system. Sun provides the appliance and the support as part of its Customer Ready Systems (CRS) program, announced in October, where the FIX-solution is preloaded at the factory. "It's a move by Sun to add value to its partners and therefore to make the market FIX-capable," says Woodward.
Sun is working with both B2Bits and Financial Fusion on bringing FIX solutions to market with Sun servers. Financial Fusion is still testing its software in the lab, whereas B2Bits is further ahead in testing with customers "on both sides of the pond," says Woodmansey. Woodward says, "The two bundles will come to market at the same price and they will differentiate on functionality." For example, B2Bits' bundle is fault tolerant because it comes with two servers for fail-over, whereas Financial Fusion's bundle runs on one server.
"The competition is not between the two vendors, but rather around the dynamics of the pricing structure for FIX engines which are charging hundreds of thousands of dollars in licensing fees," says a source close to the rental-program. Benchmarked at 14,000 messages per second, Woodmansey contends the Sun/B2Bits FIX-appliance, incorporating his firm's flagship product called FIX Antenna, will match the performance of any of his competitors.
Woodward says the performance will handle anybody's needs--buy side or even an exchange or ECN. "But the strategic drive is to make things affordable on the buy side, right out through to the hedge funds,"explains Woodward. "FIX has become quite widespread. The goal is to facilitate external STP by getting the market FIX capable. Our contribution to that is putting our global reach and putting out commodity pricing to the market," he says.
The next step for FIX Raq is to support SWIFT, FPML and Oasys messaging and ISO 15022 XML when the document data types are available. "From a single bundle you'll be able to support the most common industry-standard-messaging protocols," says Woodmansey. For that reason, B2Bits is also working with Century 24 Solutions to integrate support for SWIFT, FPML and Oasys protocols. Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio