Latency Testers Take Magnifying Glass to End-to-End Performance
June 23, 2008
With trading firms dwelling on the tiniest delays in their systems, a growing number of technology companies are making a name for themselves by offering tools that test, monitor and rate end-to-end latency in real time.
Testing service providers such as Corvil, Correlix and Trading Metrics argue that firms can't effectively address latency issues unless they can examine their performance at the most granular level. Older or homegrown solutions, say the companies, can't drill down to that level or take a system- or network-wide view.
"Performance and latency testing is nothing new," said Adam Honore, senior analyst at Boston-based Aite Group, "but these new services make it far easier for people to do it. While testing across the board for latency levels has been lacking, now firms have new products that can provide global oversight."
A slew of next-generation latency testers had their products on display at the Securities Industry & Financial Markets Association's (Sifma) recent technology conference in New York. Some tout their ability to identify a trading system's speed bumps and bottlenecks, while others point to their ability to detect microbursts on a network--5 to 10 millisecond periods of intense traffic. Though older testing platforms cannot easily recognize microbursts, they often produce variance in messaging speeds, or jitter, and a slowdown in executions.
Dublin-based Corvil has found that "the dominant factor in determining whether or not a high-speed network had a latency problem was how burst-y the traffic was," according to CEO Donal Byrne. "In a gigabit local area network environment, for example, we saw that microbursts could result in large spikes of traffic that could induce upward of 500 milliseconds of delays."
Corvil, founded in 2000 by four mathematicians from the Dublin Institute of Advanced Study, emphasizes its expertise watching microburst activity for telecommunications companies and trading firms and has obtained seven patents for algorithms that analyze, monitor and measure performance on a sub-millisecond level. Since the microburst problem became more apparent two years ago, said Byrne, the vendor has signed on the London Stock Exchange and Deutsche Borse. At the Sifma conference, Corvil announced that Credit Suisse was its latest client.
James Walker, managing director of Credit Suisse's global communications network, says that about seven months ago his firm began looking for a latency testing and management system that could cope with 10 gigabit speeds and provide microsecond granularity, along with data analysis and reporting tools. Infrastructure provider BT Global Financial Services suggested CorvilNet.
"The level of granularity we have to monitor keeps getting finer and finer," said Walker, adding that Credit Suisse wanted "continual monitoring of real-time performance so that we have appropriate headroom capacity in our networks, can absorb significantly larger traffic peaks, can upgrade when necessary and can move to alternative platforms when required."
CorvilNet version 5.0, expected to roll out next month, will allow network administrators to set their performance objectives and receive alerts when they aren't met. It also provides individual packet views to diagnose network activity and offers recommendations to reach acceptable performance levels.
Tracking Trades
On June 9, Trading Metrics introduced Trading Latency Metrics, which tracks in microseconds the speed with which orders are received, routed and executed by exchanges. The offering complements Market Latency Metrics, a product the New York-based company launched in February to continuously measure market data latency, the throughput of trading systems and whether there are delays or bottlenecks related to exchange-derived data.
