Javelin, Iona Team Up for FIX-Based Web Services

By Maria Trombly | Securities Industry News | June 10, 2002

Two leading technology vendors have hopped on the Web services bandwagon and announced last week that they have joined forces to offer a FIX engine over a Web services connection. Web services promise to smooth the way to straight-through-processing and T+1 by allowing any application to communicate with any other using open XML standards.

Javelin Technologies, which was recently acquired by Stamford, Conn.-based NYFIX, will add the Web services connection to the 11 others it already has. Javelin CEO George Kledaras said Javelin will continue to support the other middleware standards for the foreseeable future.

"We support Tibco and Talarian, IBM's MQ series and some of the Java middlewares," he said. "But we think Web services is a big positive step in our industry."

Javelin, based in New York City, currently has 50 percent of the FIX market, Kledaras said, and Web services is a hot topic with his clients.

"They've all been talking to us about it," he said. "We're really excited about this."

The advantage to switching over to Web services from one of the proprietary middlewares, he said, is that Web services are inherently cheaper, easier, and more scalable. "We think that this is the next wave," he said. "It is much easier to architect straight-through processing this way. It's very powerful."

While Javelin is supplying the FIX engine, the Web services part is being provided by Iona Technologies, headquartered in Dublin, Ireland.

The first uses of the Web services FIX connection will probably be for lower-volume transaction flows, said Gary Maier, Iona's managing director of global financial services. The reason is that XML-on which both Web Services and FIXML are based-is a verbose language.

In older protocols, there is a high emphasis on compactness-the same way that programmers used to leave the first two digits off of the year to save space, existing communication protocols use codes, abbreviations, and other methods to squeeze as much information into as little space as possible. XML, so to speak, not only spells the year out, but describes which calendar is being used and whether daylight savings time applies.

"There's no question that Moore's Law is going to apply-your bandwidth and your computing capabilities are increasing at an exponential rate and distributing even thicker messages over the wire isn't going to have the cost it did before," Maier said.

The first area in which FIXML over Web services is going to take off is with the smaller buy-side firms, he said.

"Most of them are unlikely to own infrastructure in their own right," he said. "They're not necessarily going to have a FIX engine sitting inside of their shop and you'll see more of is the service bureau model-and their ability to migrate to XML is nothing more than a function of those solutions being available. They're getting something they don't have today."

Meanwhile, he said, sell-side firms are likely to actually subsidize Web services connections for their customers.

"With the move toward more straight-through-processing, the expense of actually maintaining dedicated resources-faxes, phones, and so on-are too high. What we've heard from talking with a number of firms, is that they're actually willing to soft-dollar the buy side's ability to connect because the net cost is less than having to process the trades the old way."

In addition, the big players are already starting to use Web Services inside the enterprise to help lower the cost of integration-though not yet for high volume external connectivity. "Where you need incredibly high through-put, it's probably not the way to go right now."