Investment research and trading
Discussion of how data management and analytic technologies are used in trading and investment research. (As opposed to a discussion of the services we ourselves provide to investors.) Related subjects include:
- CEP (Complex Event Processing)
- (in Text Technologies) The use of text analytics in trading and investment research
Vertica customer notes
Dave Menninger of Vertica called to discuss NDA product futures, as vendors tend to do in the weeks before a TDWI conference. So we also talked a bit about the Vertica customer base. That’s listed as 86 at the end of Q2, up from 74 in Q1. That’s pretty small growth compared with Q1, which Dave didn’t fully explain. But then, off the top of his head, he was recalling Q1 numbers as being lower than that 74, so maybe there’s a reporting glitch in the loop somewhere.
Vertica’s two biggest customer segments are telecommunications and financial services, and Dave drew an interesting distinction between what the two groups care about. Telecom companies care about data warehouses that are big and 24/7 reliable, but don’t do particularly complex analytics. Financial services — by which he presumably means mainly proprietary traders — are most focused on complex and competitively innovative analytics.
Also mentioned in various contexts were web-based outfits such as data mart outsourcers, social networkers, and open-source software providers.
Vertica also offers customer win stories in other segments, but most actual discussion about what Vertica does revolves around the application areas mentioned above, just as it has been in the past.
Similar (not necessarily identical) generalizations would be true of many other analytic DBMS vendors.
Netezza Q1 earning call transcript
I finally read the Netezza Q1 earnings call transcript, put out by Seeking Alpha. Highlights included:
- Netezza got 14 new-name accounts and 21 follow-on deals. Average sale in both groups was right around $1 million.
- The economy is tough, deals are slipping, and nobody knows for sure what will happen.
- Netezza’s main head-to-head competitors are Oracle and Teradata. Netezza claims good but not perfect win rates against each, but concedes that those vendors (especially Oracle) of course get other deals Netezza never sees.
- Netezza characterizes Teradata as offering its multiple product lines, trying to upsell many customers from cheaper to more expensive product lines, and being selectively aggressive about pricing. None of this is surprising to me.
- 80% of Netezza’s Q1 revenue, and perhaps even a higher fraction of new-name accounts, was in four vertical markets: “Digital media,” telecom, government, and financial services.
- Some time over the next few months, Netezza will give at least some more clarity about future products.
One tip for the Netezza folks, by the way, from this former stock analyst — you should never use the word “certainly” about a deal you haven’t closed yet. “Almost surely” could be OK, but “certainly” — well, it certainly was not the thing to say.
Followup on IBM System S/InfoSphere Streams
After posting about IBM’s System S/InfoSphere Streams CEP offering, I sent three followup questions over to Jeff Jones. It seems simplest to just post the Q&A verbatim.
1. Just how many processors or cores does it take to get those 5 million messages/sec through? A little birdie says 4,000 cores. Read more
| Categories: Analytic technologies, IBM and DB2, Investment research and trading, Streaming and complex event processing (CEP) | 7 Comments |
IBM System S Streams, aka InfoSphere Streams, aka stream processing, aka “please don’t call it CEP”
IBM has hastily announced System S Streams, a product that was supposed to be called InfoSphere Streams and introduced only in 2010. Apparently, the rush is because senior management wanted to talk about it later this week, and perhaps also because it was implicitly baked into some of IBM’s advertising already. Scrambling ensued. Even so, Jeff Jones and team got to me fast, and briefed me — fairly non-technically, unfortunately, but otherwise how I like it, namely on a harmless embargo and without any NDAs. That’s more than can be said for my clients at Microsoft, who also introduced CEP this week, but I digress …
*Indeed, as I draft this post-Celtics-game, the embargo is already expired.
Marketing aside, IBM System S/InfoSphere Streams is indeed a CEP/stream processing engine + language (with an Eclipse-based development environment). Apparently, IBM’s thinks InfoSphere Streams (if that’s what it winds up being renamed to) is or will be differentiated from other CEP packages in:
- Scale-out. (That’s the one that appears to be real today. In fact, there’s a prototype running on Blue Gene.)
- Support for complex datatypes such as XML, text, voice, video, etc.
- Security and general industrial-strengthness.
| Categories: Analytic technologies, Application areas, IBM and DB2, Investment research and trading, Scientific research, Streaming and complex event processing (CEP) | 3 Comments |
Aleri update
My skeptical remarks on the Aleri/Coral8 merger generated some pushback. Today I actually got around to talking with John Morell, who was marketing chief at Coral8 and has remained with the combined company. First, some quick metrics:
- The combined Aleri has around 100 employees, 60-40 from Aleri vs. Coral8.
- The combined Aleri has around 80 customers. All of Aleri’s, with one sort-of exception at Banks.com, were in financial services. A large minority of Coral8’s were in financial services too.
- However, half of Aleri’s marketing spend going forward is budgeted outside the financial services markets. Not unreasonably, John presents this as a proof point Aleri is serious about selling to other markets.
- Aleri had 12-14 people in the UK pre-merger. Coral8 had none in Europe.
- Coral8 had 15 OEMs pre-merger, some actually generating revenue. Aleri had substantially none.
- Coral8 had been closing a “couple” of customers/quarter in online commerce. But recently, that rate ramped up to a “few.”
- Aleri’s engine is used to handle “many” hundreds of thousands of messages per second. Coral8’s highest-throughput user processes 100-150,000 messages/second.
John is sticking by the company line that there will be an integrated Aleri/Coral8 engine in around 12 months, with all the performance optimization of Aleri and flexibility of Coral8, that compiles and runs code from any of the development tools either Aleri or Coral8 now has. While this is a lot faster than, say, the Informix/Illustra or Oracle/IRI Express integrations, John insists that integrating CEP engines is a lot easier. We’ll see.
I focused most of the conversation on Aleri’s forthcoming efforts outside the financial services market. John sees these as being focused around Coral8’s old “Continuous (Business) Intelligence” message, enhanced by Aleri’s Live OLAP. Aleri Live OLAP is an in-memory OLAP engine, real-time/event-driven, fed by CEP. Queries can be submitted via ODBO/MDX today. XMLA is coming. John reports that quite a few Coral8 customers are interested in Live OLAP, and positions the capability as one Coral8 would have had to develop had the company remained independent. Read more
Data warehouse load speeds in the spotlight
Syncsort and Vertica combined to devise and run a benchmark in which a data warehouse got loaded at 5 ½ terabytes per hour, which is several times faster than the figures used in any other vendors’ similar press releases in the past. Takeaways include:
- Syncsort isn’t just a mainframe sort utility company, but also does data integration. Who knew?
- Vertica’s design to overcome the traditional slow load speed of columnar DBMS works.
The latter is unsurprising. Back in February, I wrote at length about how Vertica makes rapid columnar updates. I don’t have a lot of subsequent new detail, but it made sense then and now. Read more
Coral8 proposes CEP as a BI data platform
It used to be that Coral8 and StreamBase were the two complex event/stream processing (CEP) vendors most committed to branching out beyond the super-low-latency algorithmic trading marketing. But StreamBase seems to have pulled in its horns after a management change, focusing much more on the financial market (and perhaps the defense/intelligence market as well). Aleri, Truviso, and Progress Apama, while each showing signs of branching out, don’t seem to have gone as far as Coral8 yet. And so, though it’s a small company with not all that many dozens of customers, my client Coral8 seems to be the one to look at when seeing whether CEP really is relevant to a broad range of mainstream – no pun intended – applications.
Coral8 today unveiled a new product release – the not-so-concisely named “Coral8 Engine and Portal Release 5.5” – and a new buzzphrase — “Continuous Intelligence.” The interesting part boils down to this:
Coral8 is proposing CEP — excuse me, “Continuous Intelligence” — as a data-store-equivalent for business intelligence.
This includes both operational BI (the current sweet spot) and dashboards (the part with cool, real-time-visualization demos). Read more
Outsourced data marts
Call me slow on the uptake if you like, but it’s finally dawned on me that outsourced data marts are a nontrivial segment of the analytics business. For example:
- I was just briefed by Vertica, and got the impression that data mart outsourcers may be Vertica’s #3 vertical market, after financial services and telecom. Certainly it seems like they are Vertica’s #3 market if you bundle together data mart outsourcers and more conventional OEMs.
- When Netezza started out, a bunch of its early customers were credit data-based analytics outsourcers like Acxiom.
- After nagging DATAllegro for a production reference, I finally got a good one — TEOCO. TEOCO specializes in figuring out whether inter-carrier telcom bills are correct. While there’s certainly a transactional invoice-processing aspect to this, the business seems to hinge mainly around doing calculations to figure out correct charges.
- I was talking with Pervasive about Pervasive Datarush, a beta product that lets you do super-fast analytics on data even if you never load it into a DBMS in the first place. I challenged them for use cases. One user turns out to be an insurance claims rule-checking outsourcer.
- One of Infobright’s references is a French CRM analytics outsourcer, 1024 Degres.
- 1010data has built up a client base of 50-60, including a number of financial and retail blue-chippers, with a soup-to-nuts BI/analysis/columnar database stack.
- I haven’t heard much about Verix in a while, but their niche was combining internal sales figures with external point-of-sale/prescription data to assess retail (especially pharma) microtrends.
To a first approximation, here’s what I think is going on. Read more
Vertica update
I chatted with Andy Ellicott and Mike Stonebraker of Vertica today. Some of the content is embargoed until February 19 (for TDWI), but here are some highlights of the rest.
- Vertica now is “approaching” 50 paid customers, up from 15 or so in early November. (Compared to most of Vertica’s fellow data warehouse specialists, that’s a lot.) Many — perhaps most — of these customers are hedge funds or telcos.
- Vertica’s typical lag from sale to deployment is about one quarter.
- Vertica’s typical initial selling price is $250K. Or maybe it’s $100-150K. The Vertica guys are generally pretty forthcoming, but pricing is an exception. Whatever they charge, it’s strictly per terabyte of user data. They think they are competitive with other software vendors, and cheaper, all-in, than appliance vendors.
- One subject on which they’re totally non-forthcoming (lawyers’ orders) is the recent patent lawsuit filed by Sybase. They wouldn’t even say whether they thought it was bogus because they didn’t infringe, or whether they thought it was bogus because the patent shouldn’t have been granted.
- Average Vertica database size is a little under 10 terabytes of user data, with many examples in the 15-20 Tb range. Lots of customers plan to expand to 50-100 Tb.
- Vertica claims sustainable load speeds of 3-5 megabytes/sec/node, irrespective of database size. Data is sucked into RAM uncompressed, then written out a gig/node at a time, compressed. Gigabyte chunks are then merged on disk, which is superfast as it doesn’t involve sorting. (30 megabytes/second.) Mike insists this doesn’t compromise compression.
We also addressed the subject of Vertica’s schema assumptions, but I’ll leave that to another post.
| Categories: Analytic technologies, Data warehousing, Database compression, Investment research and trading, Michael Stonebraker, Sybase, Theory and architecture, Vertica Systems | 6 Comments |
Applications for super-low-latency CEP
Complex event/stream processing vendors compete fiercely on the basis of low latency, down to the single-digit number of milliseconds, or even sub-millisecond levels. A question naturally springs to mind: When does this extreme low latency matter?
I think I’ve come up with a concise yet fairly accurate answer: Super-low latency matters when the application includes direct competition against a similarly fast opponent. The best example is automated stock trading – if you can exploit a market inefficiency 1 millisecond before your competition, you make money.
Other examples might arise in network security or battlefield systems, but I don’t know of any specific real-life cases. Instead, other applications for complex event/stream processing tend to be content with latencies that are easier to achieve. E.g., 100 milliseconds (1/10 of second) is likely to be plenty fast enough.