April 16, 2012

CEP is booming. While we have been writing about the technology and its growing popularity for several years, the rise of complex event processing shows no signs of slowing down, according to a new report from Celent.

The advisory firm expects the market for CEP solutions in the financial industry to grow to $276 million in 2013, up from the current $115 million.

One of the major drivers behind CEP’s growing popularity was the 2008 financial crisis, which caused firms to pay much closer attention to enterprise risk management and monitoring functions which CEP is specifically suited for since it can detect and act on real time data patterns and triggers.

Another reason for the increasing demand for CEP solutions is rising interest from buy-side players who want to balance high-speed technologies on the execution side with similar high-speed technologies for pre-trade analytics, says Muralidhar Dasar, author of the report titled ‘Complex Event Processing, Looking Beyond Algorithmic Trading.’

CEP applications that are of value to high-frequency traders include pre-trade intelligence, market data cleansing, spotting arbitrage opportunities, and pricing.

The report notes that CEP implementations are almost evenly split between pre-trade and post-trade applications, while currently around 75% of CEP deployments are in sell side institutions who in particular have boosted their risk monitoring capabilities.

Moving forward, CEP will be increasingly used for multiple applications within a single firm, Dasar suggests. “Enterprise architects will need to rethink architecture and mold it in ways such that it becomes amenable to multiple instances of data being consumed and published by various modules in real time,” he says.

Meanwhile, the CEP vendor landscape has also seen some significant change. Once the domain of niche players, the market has now consolidated and has also seen the entry of large corporations such as IBM, Oracle, Microsoft and SAP, Celent notes.

“The entry of large IT players in this space also indicates growing revenue opportunities in the CEP market,” Dasar says.

ABOUT THE AUTHOR
Melanie Rodier has worked as a print and broadcast journalist for over 10 years, covering business and finance, general news, and film trade news. Prior to joining Wall Street & Technology in ...