IBM Snares InfoDyne in Financial Transactions Push
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IBM beefed up its financial transactions portfolio with today's announcement that it's purchased privately-held InfoDyne. Terms of the deal were not disclosed. Park Ridge, Illinois-based InfoDyne will now be part of IBM's WebSphere division with its 14 employees, including founder and CEO Guy Tagliavia, reporting to Tom Rosamilia, general manager of WebSphere.
InfoDyne provides high-speed software platforms and connectors designed to provide faster data delivery in the highly competitive and time-sensitive world of stock trading. IBM (NYSE:IBM) said the acquisition supports its strategy of offering a comprehensive portfolio of industry-focused software for real-time needs.
A recent example, was IBM's January purchase of AptSoft, which offers software used to identify and alert businesses to emerging trends and events. Aptsoft uses information culled from real-time queries of data stored on all of a company's disparate software applications.
With InfoDyne in tow, IBM said it will be better able to offer solutions for electronic trading, an industry that's seen exponential growth in transactions and data volumes the past several years.
Today, an estimated four billion shares per day trade on the New York Stock Exchange, NASDAQ and regional exchanges, according to the TABB Group, which estimates the figures are six times the volume on those same exchanges five years ago.
"InfoDyne's software enables microseconds' response for highly competitive trading firms," said IBM's Rosamilia, in a conference call announcing the deal. "This is a big play for us in the low latency field."
InfoDyne is a bit more bullish on its performance. A statement on the company's Website said the firm is "committed to maintaining system performance, including sub-millisecond latency, despite an ever-increasing volume of data."
Among the ways InfoDyne said it achieves such high performance is its efficiency in software design and leveraging of multi-threaded multi-processor environments. The company also said it uses a modular architecture that allows it to increase data capacity by adding additional hardware, network and software components.
Asked to name InfoDyne's competitors, Tagliavia hedged a bit, while Rosamilia named Tibco. But he said in a lot of cases, large trading companies have developed solutions in house.
"We believe we can do it for less money than they can" in house, Rosamilia said. "This is plumbing, this is what we do well." He said companies that start off trying to develop faster ways to data acquisition end up writing their own middleware and that IBM's solutions, such as a combination of InfoDyne and Websphere, IBM's middleware, would be more cost-effective.
Analyst Charles King said the addition of InfoDyne gives IBM another weapon in its competition with Sun and HP for financial customers. "These kind of businesses buy servers by the gross," King, analyst with Pund-IT, told InternetNews.com. "So having this kind of edge can make a really big difference.
"Also, the fact that InfoDyne will integrate with WebSphere is a major differentiator even though WebSphere connects to many different systems. To have it really tightly integrated can be a real value proposition in the financial services space."
IBM said InfoDyne is the 69th acquisition it's made since the beginning of 2003.