August 2016

BSE Bags Red Hat Innovation Award

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Ashish Kumar Chauhan, Managing Director & CEO, BSE (centre) receives “2016 Red Hat Innovation Award”, instituted by Red Hat, the world’s leading provider of open source solutions.

Riding the Red Hat solutions, the Bombay Stock Exchange has been recognised for its “notable flexibility, scalability, cost effectiveness, performance and security within an infrastructure”. A report

The Bombay Stock Exchange (BSE) has been recognised as “2016 Red Hat Innovation Award” winner by Red Hat, the world’s leading provider of open source solutions.

The Asia’s first stock exchange has been honoured in the Infrastructure category, recognising its notable flexibility, scalability, cost effectiveness, performance, and security within an infrastructure.

Congratulating the BSE on winning a Red Hat Innovation Award, Rajesh Rege, Managing Director, India, Red Hat, said: “The BSE has effectively implemented open source solutions to build their new BOLT Plus trading infrastructure and break free from vendor lock-in.”

“Today, the BSE has been recognised as the fastest stock exchange in the world, with speeds reported to be 10 times faster than the next fastest exchange. The Exchange is one of Asia’s most reputed stock exchanges and their openness to innovate and change is admirable,” Rege added.

There are over 5,500 companies listed on the BSE, making it the world’s largest exchange in terms of listed members.

Feeling “honoured to receive the a 2016 Red Hat Innovation Award”, Ashish Kumar Chauhan, Managing Director & CEO, BSE, said: “Our switch-to-open source has been exemplary and the results have proven Red Hat to be a reliable and critical technology partner.”

Chauhan further said: “With Red Hat’s open source technology, we have been able to achieve flexibility, agility, and scalability needed to meet our changing market demands. Red Hat has always been there to support us in our day-to-day operations and such trust helps us simplify our business. Today, Red Hat is our backbone and an intrinsic part of our business transformation story.”

For two decades, the BSE struggled under the weight of its proprietary technologies. The old infrastructure limited innovation, and the high cost of upgrades ultimately made its system economically unfeasible.

bseThe BSE later collaborated with Red Hat to build an entirely new trading system on open source technology, powered by Red Hat Enterprise Linux. Since implementation of the new trading system, BOLT Plus, the BSE has increased its volumes from 10 million orders a day to 400 million, cut hardware costs by 66 per cent and increased trading speed from 10 milliseconds to six microseconds.

Since 2007, Red Hat has recognised the achievements of customers and partners worldwide, who demonstrate creative thinking, determined problem solving, and innovative uses of Red Hat technology with the Red Hat Innovation Awards.

The Award winners from the previous decade represent leaders from around the world and across industries, who are using open source solutions to transform their organisations and enable faster innovation.

For the 2016 awards, over 60 nominations were received, with judges selecting one winning project in six categories that exemplified the most innovative achievements used to answer complex IT challenges with Red Hat solutions.

TROUNCING LEGACY TRADING BARRIERS
Established in 1875, the BSE is Asia’s first stock exchange. When BSE shifted from floor-based trading to an electronic trading system in 1995, it used proprietary hardware and software. For the next two decades, BSE was locked into using and investing in those technologies.

“We were more or less stuck,” said Kersi Tavadia, Chief Information Officer of BSE. “We could not break free. We could not innovate.”

The proprietary solution created many challenges for the BSE. The system’s agility reached its limits just when the rapidly growing exchange needed it most, such as while enacting regulatory updates.

“There was a point when investing further in the system did not make any sense, because it wasn’t helping us achieve the goals we wanted,” he said. “So we needed to cut down the technology and use a totally fresh approach, rather than upgrade the same things again and again.”

BUILDING OPEN SOURCE INFRA WITH RED HAT
So, Tavadia and his team decided to take a bold step: discard BSE’s entire IT infrastructure and build a completely new trading system with open source technology.

“Google is using open source. Facebook is using it. Everyone else is using it, and that’s why they’re profitable,” said Tavadia. “They’re not spending resources on proprietary software and hardware. We knew we needed to go in that direction as well.”

 BENEFITS
  • Reduced trade transaction time from 10 milliseconds to 6 microseconds – faster than any stock exchange in the world
  • Increased trading volume from 10 million to 400 million orders per day
  • Reduced TCO by 90%
  • Eliminated manual tasks, resulting in increased operational efficiency and reduced staffing requirements-from 15 to just 2 employees

The BSE knew of Red Hat’s reputation as a leader in the open source technology. The exchange conducted a cost-benefit analysis and quickly determined that Red Hat’s products and services were extremely competitive options.

Following implementation of the new trading system, BOLT Plus, from Red Hat, the BSE has increased its volumes from 10 million orders a day to 400 million, cut hardware costs by 66 per cent and increased trading speed from 10 milliseconds to six microseconds

BSE was also impressed with Red Hat’s extensive partner ecosystem – particularly its strong relationships with a large number of hardware vendors.

To achieve the flexibility, agility and scalability needed to meet business needs, BSE used Red Hat technology to implement a new trading system called BOLT Plus. This system is powered by Red Hat Enterprise MRG Realtime, a replacement kernel for Red Hat Enterprise Linux. Red Hat Enterprise Linux provides a modular design that divides the trading system into several independent, isolated components in different service domains. As a result, the BSE can implement, maintain and run these components independently, leading to improved flexibility, throughput, and capacity.

In addition, each component is designed with redundancy for real-time failover, reducing system downtime due to errors or other issues.

As part of the new system, the BSE also implemented Red Hat Satellite for system management, such as patching and configuration management, as well as regular system updates.

Additionally, Red Hat JBoss Enterprise Application Platform offers the BSE a fully certified JavaTM EE platform for quickly developing and deploying applications.

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