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Cloud Event Processing - Analyze, Sense, Respond

Colin Clark

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First off, the names: Cloud Event Processing & DarkStar.  Not your typical Wall Street technology naming convention.  Add to that the chance to team up again with Colin Clark on his decades’ long quest to make sense out of massive volumes of “big data” – in real time.  But “What,” I was asked, “Does that have to do with Wall Street?”  My answer, after 20 years in Wall Street technology, was a short one:  “Plenty”.

When you say “Wall Street”, most of the world, think of Art Cashin, Ted Weisberg and the floor traders of the NYSE.  But as anyone in Capital Markets knows – that’s not where the real action is.  It’s one of the first lessons I learned in the 1980’s when I went to work for AutEx in Boston.   Founded in the late 1960’s to automate trading (Automated Exchange = AutEx) it instead became the de facto “indication of interest” matching system that allowed institutional traders to find the other side of huge block trades.

As a near monopoly, AutEx was the must-have system if you wanted to play in the lucrative and prestigious game of US equity block trading. The screen told you which brokers to call for what stocks, you picked up a phone, and the trade was on.  It was a WAN before there were WAN’s.  Before email.  Before the FAX, and “ax-lists”.

While almost all trading was still done by telephone, systems like AutEx and Instinet were pioneering the transmission of hundreds of thousands of messages to many hundreds of brokers and institutional trading desks.  The messages had to be targeted, and delivery guaranteed.   No small feat at the time.

Unbeknownst to us, we were all in the midst of an STP revolution.  STP (straight through processing) was the goal of automating all the disparate conveyer belts that made up the trading process – from trade idea, to order, execution and through to settlement.  In reality, this took a full 15 years to achieve across the industry.  And along the way my career, and the careers of many others, followed this evolution of electronic trading and messaging on Wall Street.

All was not always smooth.  At AutEx we created the first hub-based order routing network based on the FIX protocol in the mid 1990’s.  Shortly thereafter I helped entrepreneur George Kledaras launch the first commercially successful FIX engine so that firms could actually trade using FIX – the very protocol they were touting.  Progress was not always linear, but it was happening.

In time, the conveyor belts came together, one by one.  And since then we have seen a literal explosion of trade related data on Wall Street.  Driven by automation, algorithmic trading, penny spreads and black-boxes co-located in data centers, the results has been billions of shares traded a day – and the pace is not slowing.

So why did I join Cloud Event Processing?  Because to me, the trend is clear.  The evolution of STP is still ongoing – and will not stop at the boundary of any one data center, in any one city, or country, or asset class.  The ability to collect, process and intelligently analyze “big data” in Capital Markets is both a challenge and a necessity.

In full disclosure, I had previously worked with Colin in 2004 with his company IBSN, based in Denver.  As I’ve since learned, Colin was ahead of his time, offering what in effect was outsourced FIX connectivity services.  While sensible sounding today, the idea of a Wall Street firm outsourcing this was totally counterintuitive in 2004.  In addition to the FIX service was his data engine – the forerunner of DarkStar.  The future was there.  All that was missing was the future.

Fast forward six years to 2011.  In just a few years we witnessed stunning advances in technology, networks, processing power and algorithms.  Skyrocketing exchange volumes have resulted in an explosion of market data.  Colin and his team have worked on numerous facets of this revolution for over a decade, resulting in the latest and best iteration of their vision – DarkStar.  They are genuinely inspired by the challenge and importance of finding real, contextual meaning in these ever growing data streams.  Their work will create immediate benefits today in traditional environments.  But even more exciting, and important, is their vision of bringing this technology to the cloud – on Wall Street and elsewhere.

In many ways the nature of trading has not changed.  The workflow and the players are often the same as they were in the 1980’s.  But technology has radically changed the pace and scale of that workflow, and will continue to do so.  I have been lucky enough to work with some visionaries who understood how to harness those moments in time.  This is one of those moments.  I believe for Cloud Event Processing the future has finally arrived.

 

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Colin Clark is the CTO for Cloud Event Processing, Inc. and is widely regarded as a thought leader and pioneer in both Complex Event Processing and its application within Capital Markets.

Follow Colin on Twitter at http:\\twitter.com\EventCloudPro to learn more about cloud based event processing using map/reduce, complex event processing, and event driven pattern matching agents. You can also send topic suggestions or questions to colin@cloudeventprocessing.com