IBM, NYSE Set for Major Software Pact

In an example of how high-tech vendors are shoring up deals in the financial
services industry, IBM will announce a major technology
pact with the New York Stock Exchange (NYSE) next Thursday, has learned.

Steve Mills, senior vice president and group executive of IBM Software, and
Roger Burkhardt, CTO of the New York Stock Exchange, will
host the briefing at the NYSE’s headquarters in New York City.

IBM refused to comment on the relationship, in which the NYSE will be a
customer. But a deal between IBM and NYSE, powerhouses in their respective
fields, would seem to be a perfect match.

IBM’s software division could provide any number of infrastructure pieces,
from Web services platforms supported by the company’s service-oriented
architecture (SOA) tools, to its latest WebSphere Application
Server 6.0. But IBM’s SOA momentum has been in overdrive lately.

The company Wednesday said it has refreshed
its CICS Transaction Server by making it possible for Web services
to run more efficiently on mainframes. Mainframes
happen to be the mainstays in many large, established equities firms, such
as the NYSE.

Wintergreen research analyst Susan Eustis broached
this likelihood.

“One would assume IBM is going to push their SOA architecture, and it will
be very close to the [CICS] announcement,” Eustis told “The SOA architecture is very powerful, because it
pulls together the app server, the portal, the integration suite, the
business processes — and so you’ll see IBM talking about a broad suite of
products that run on open systems.”

It is most likely a combination of software, supported by IBM’s vaunted
Global Services division (IGS), to ensure that the NYSE’s electronic
practice runs at a constant.

Reliable, always-on guarantees, believed to be fool’s gold by some experts,
are what high-tech vendors have been striving to provide financial services
companies with. Some equities firms process millions of transactions per day,
sometimes numbering in the billions of dollars.

Financial services outfits are attractive to high-tech vendors for many
reasons. In a cyclical theory, banks and equities firms are relied upon to
exchange a lot of money. Because of this, they often have plenty to spend to
ensure the technology backbone they have will ensure transactions with great

For example, the NYSE is the world’s largest stock exchange, with an average
of 1.6 billion shares traded daily and a market capitalization of more than
$17.8 trillion. This makes the firm a lucrative target at a time when
competition among systems vendors is fierce.

IBM, which competes with Sun Microsystems, HP and Dell in the space, has
made no secret about its intention to own the financial services space, as
company officials noted in the third-quarter earnings call.

While Eustis said the SOA ties the software together and makes business
processes accessible to people, she said SOAs used in concert with
mainframes and blade servers running more Linux software offer compelling
value propositions.

“Blades get rid of the wiring, which is half the cost of the server,” Eustis
explained. “Those are great for the financial community because they’re
cheap. You don’t replace the mainframe so that’s even cheaper.”

IGS helps ensure that the purchased technology works, Eustis said.

The event should help IBM hold serve on Wall St. over rival Sun , which swept into New York City in September with its quarterly
news release, vowing to “Take Back Wall Street.”

At that event, Sun President and COO Jonathan Schwartz unveiled new
migration programs to woo and wean customers off of Linux and Xeon
processors from Intel, currently offered by rivals such as IBM, HP and Dell.

Sun vowed to offer Solaris on several platforms, commodity hardware,
interoperability with other software and next-generation pricing models.

According to recent server figures from IDC, IBM maintains a
hefty lead in revenue share over Sun, garnering 31.7 percent of the market
in the third quarter compared to Sun’s 10.2 percent share.

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