Credit Crisis Driving Wall Street Shift Toward Risk Analysis and Use of High-Performance Computing Resources
According to Microsoft survey, performance is still critical purchase factor, but ease of deployment and ease of management are of greater importance year-over-year.
NEW YORK .— Driven by the credit crisis, Wall Street firms are increasingly conducting real-time and intra-day risk analysis and are leveraging high-performance computing (HPC) resources to assist with these tasks, according to a survey released today by Microsoft Corp. at the Securities Industry and Financial Markets Association (SIFMA) 2008 Technology Management Conference & Exhibit.
The Microsoft “High-Performance Computing Capital Markets Survey 2008,” conducted by Washington, D.C.-based KRC Research, found that capital markets firms in the last 12 months have faced increased demands to run real-time market risk analysis (25 percent), middle-office risk analytics (34 percent) and portfolio-related calculations, such as rebalancing and hedging strategies (42 percent). At the same time, Wall Street firms are turning to their growing HPC resources to assist with these activities, with companies reporting “a lot or some” demand for HPC to handle real-time market risk analysis (51 percent), middle-office risk analytics (50 percent) and portfolio-related calculations (54 percent).
The survey also found that while outright performance (27 percent) continues to be a primary purchase factor when selecting an HPC operating system, capital markets firms ranked ease of management (14 percent), ease of deployment (16 percent), and support of existing third-party applications (21 percent) of similar importance. By comparison, in a similar Microsoft HPC survey released last year, 37 percent of respondents reported performance as the most critical factor, with ease of management and other factors in the single digits.
“Impacted by the credit crisis, capital markets firms are aligning their HPC resources toward uncovering and managing risk,” said Craig Saint-Amour, U.S. capital markets industry solutions director at Microsoft. “At the same, it appears that companies are seeking more bang for their buck from their HPC vendors in terms of greater ease of deployment, manageability and support. In this tough economic environment, lowering operational costs and increasing overall productivity at all levels of a firm’s HPC value chain — from end users to developers to operations staff — is at the forefront of every manager’s mind.”
Recent hardware and software advances, such as powerful, low-cost processors and familiar, widely supported operating systems such as Windows HPC Server 2008, have made it easier for analysts, traders and portfolio managers to conduct HPC tasks. According to the survey, the most common lines of business using HPC environments today include equities (30 percent), fixed income (20 percent), commodities (13 percent), foreign exchange (13 percent), derivatives (23 percent) and algorithmic trading (18 percent).
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