Move from Solaris to RHEL boosts performance for the Chicago Mercantile Exchange

By Pam Derringer, News Writer 15 Apr 2008 | SearchEnterpriseLinux.com

CME won its gamble. And in so doing, it proved that an open source platform, a relative newcomer to the data center scene in general and the financial world in particular, had the power and speed to handle high-volume, real-time, mission-critical applications.

Another factor in the conversion was latency. The technological bar is continually rising on how fast a transaction must be completed to be considered "real time," but Kutty defines it, futuristically, as a single millisecond. At the time of CME's conversion, the Sun Sparc servers were averaging 200 milliseconds per transaction, about twice what was considered real time in 2003, he said. Today 15 to 20 milliseconds is the benchmark, he said.

We have historically noticed that when we improve the performance of the trading engines, traders will trade more often. Vinod Kutty, associate director and head of distributed R&D computing,, the Chicago Mercantile Exchange

Although people can't physically react any faster to trades that occur in a tiny fraction of a second, it's still important to come as close as possible to real-time transactions because it affects the perceptions of traders, Kutty said.

"We have historically noticed that when we improve the performance of the trading engines, traders will trade more often," he said. "The faster they trade, the more they can trade, and the faster their orders are filled." Therefore, in 2003, CME began a gradual migration to X86s running Red Hat Enterprise Linux (RHEL) 2.1, starting with less critical applications, then progressing to order-entry programs and, finally, to the mission-critical trading applications, he said. At each stage, the system was fully tested before progressing to another application, he said. The transition was completed in 18 months at the end of 2004. The operating systems have been continually updated as well, with the servers now running a mix of RHEL 3 and 4 and certification of RHEL 5 currently in process.

The timing of the transition proved fortuitous. Two years later, CME would acquire yet another boost in transaction volume from its merger with the Chicago Board of Trade, hence the name change to CME Group.

In addition, the new RHEL-based servers run much faster, chopping transaction speed from 200 milliseconds to 15 to 20 milliseconds and are still heading downward, Kutty said. In two ways, CME helped to accelerate transaction speeds: first, by optimizing the TCP (Transfer Control Protocol) and second, by creating a Super HOP (Host Output Process), that routes trade orders and confirmations through a group of fast, high-powered Linux servers, he said.

An ongoing issue is the need for a broader mix of open source diagnostic tools that would provide visibility into the factors impeding real-time performance without disrupting ongoing operations, he said. In addition to more diagnostic tools, CME also would benefit from a lightweight version of the operating system that could be simulated in a lab for troubleshooting purposes, Kutty said.

The migration to Linux has paid off in improved performance, lower cost and greater stability, Kutty said. In addition, CME has gained better leverage with vendors, which translates into more price leverage for support services, he said.

Although CME has been an industry early adopter in moving to open source, its success has yet to create a stampede of followers. One reason, Kutty speculated, is that OEMs aren't designing servers specifically to run Linux; if they were, the hardware would be easier to use innovatively and easier to manage, he said.