Microsoft Server Product Portfolio Customer Solution Case Study

Global Financial Firm Innovates with Highly Available and Scalable Exchange System

Overview “We have constructed an FX transaction system … by Country or Region: Japan combining Microsoft SQL Server 2005 and Windows Server Industry: Financial services—Capital markets and securities 2003. It succeeds in achieving high usability and a

Customer Profile processing capability of up to 35,000 transactions per Based in Tokyo, Japan, SBI Liquidity second.” Market was founded in 2008 by SBI Holdings to help ensure liquidity in Tatsuo Shigemitsu, Representative Director and President, SBI Liquidity Market foreign exchange trading and to provide market infrastructure for financial firms. SBI Liquidity Market Co., Ltd., a group company of SBI Holdings, Business Situation SBI Liquidity Market needed a scalable Inc. (Representative Director, Executive Director, and CEO: foreign currency exchange system to Yoshitaka Kitao), is a market provider that offers an environment support global companies. The mission- critical solution also needed to provide for Internet FX transactions (over-the-counter, foreign currency high availability and fast performance. exchange margin transactions) to financial corporations

Solution including SBI Securities and SBI Sumishin Net Bank. When SBI Using the Microsoft .NET Framework, the Liquidity Market was created in July 2008, it decided to greatly company developed an online trading system on the Microsoft platform. The strengthen its transaction-processing capabilities by introducing solution includes x64 server computers a new trading system based on Windows Server and Microsoft that run Windows Server 2003 and Microsoft SQL Server 2005. SQL Server. Along with achieving extremely advanced performance with reliable processing speeds of up to 35,000 Benefits Delivers around-the-clock availability transactions per second, the solution strongly supports the Provides flexibility and scalability mission-critical online FX trading system. It covers more than Speeds development Doubles transaction-processing 180,000 accounts and provides stability 24 hours per day. performance Decreases hardware costs by 10 percent Background and Goals of maximum performance,” says President Installation Shigemitsu. “The role of the manager is to SBI Liquidity Market made the decision to read the current business needs as quickly build an Internet-based, over-the-counter as possible and to introduce systems that foreign currency exchange (FX) system with match those needs. This kind of judgment unprecedented processing capabilities and was also used as the background for a view to future business expansion. “What choosing Microsoft for this project. Of I first thought was that we had to develop a course, when making our final judgment, system that was equivalent or superior to we carried out extensive studies based on monetary exchanges,” says Tatsuo opinions from numerous specialists.” Shigemitsu, Representative Director and President at SBI Liquidity Market. “That President Shigemitsu also said that, above level of performance is essential, all, when building this system, SBI Liquidity considering the number of transactions, the Market received much advice from Yukio number of customers, and the number of Kumazawa, Technology Fellow for Windows orders that we anticipated. In addition, as a Technology and Special Director at CSK result of taking future expansion into WinTechnology Corporation. Kumazawa consideration—at that point in time—we also works as a technology consultant for decided to continue building an the Application Platform Products infrastructure environment capable of Department of the Server Platform Business handling transactions on a scale that does Division of Microsoft Corporation, and is not yet exist.” known for his numerous practical accomplishments. Kumazawa played an The architecture of this new system important role as an advisor in the provides the agile foundation SBI Liquidity introduction of the present system, through Market needs to facilitate its business his extremely advanced technical skill and model. “In the financial world up until now, knowledge relating to performance-tuning waves have come from overseas,” explains of Microsoft SQL Server data management President Shigemitsu. “However, if we bring software. “At that time, SQL Server and this system into actual use, the possibility Windows Server did not have much of an of Japan starting to offer a variety of actual track record in the financial industry, worldwide services is born. As a part of the and there was confusion about how to SBI Group, a financial innovator, our think about financial system structures,” mission is to constantly bring new ideas explains President Shigemitsu. “However, into being. In this sense as well, our idea the outstanding architect Kumazawa was was to make this a revolutionary system.” there, and I believe that our engineers were It goes without saying that the field of FX is able to confidently meet the challenge with a world that demands extremely high the help of his advice relating to know-how system performance, even by the standards and usability.” of the financial industry. “In finance, safety, reliability, and usability are absolute History of Installation conditions, and it is considered a matter of SBI Liquidity Market selected a solution course for these to always be operating at built with the Windows Server 2003

26 operating system and the Microsoft .NET September 2008. Because the transition Framework for its reliability, cost savings, was more or less decided for the middle of and high development efficiency. November, work began immediately at a Regarding its choice of combining SQL rapid pace. “Of course, at that point, the Server and Windows Server for this system, program was nearly complete, and final Masayoshi Okano, IT Administration testing and tuning was a two-month job,” Department System Operations Section Okano says. “Still, it was tough to make it Manager at SBI Liquidity Market, says, through all the tests in such a short period.” “Well, it was Microsoft’s reliability and cost savings. In particular, when carrying out the Nakamura recalls, “We made full use of initial study, we sensed that the license the .NET Framework. Since Windows Server system matched our company’s size and 2003 provided redundancy technology with our requirements for license allocation for network clusters and failover clusters as a development. At that time, the company function from the start, it had the had just been established, and how we additional advantage of eliminating the would be able to introduce a system with need for load balancers. This allowed us to outstanding cost performance was an provide an architecture with a sense of extremely important issue. In addition, at speed.” the time SQL Server 2005 was introduced, the evaluation version of SQL Server 2008 System Outline had already come out as well, and we had The new system delivers surprisingly fast great expectations for the continuity of performance even with prices that are an future technical advances.” order of magnitude lower than the competition—exhibiting a processing IT Administration Assistant Department capability of 35,000 transactions per Manager at SBI Liquidity Market Hidehiro second. According to Kumazawa, the Nakamura spoke about the company’s primary feature of this new trading system focus from the standpoint of development is its overwhelming processing capabilities. efficiency. “Shortening development time He explains, “At peak times, the system was also a major issue,” says Nakamura. achieves 35,000 transactions per second. “We considered using the .NET Framework, The application coordinators in the IT but that would have also meant choosing Administration Department carried out Windows Server for compatibility with the repeated tuning over a period of more than framework. However, a deciding point was a year, doubling the system’s initial that with Windows Server 2003, even the capabilities. In my estimation, it probably Enterprise Edition was compatible with 64- has a potential capacity surplus of 30 to 40 bit machines, and so it would be possible percent.” In fact, SBI Liquidity Market was to use large memory spaces. In turn, this flooded with nearly twice the normal would allow us to achieve major number of transactions in the “Greek performance increases and cost reductions Shock” of May 2010, but the system at the same time.” continued operating stably without any problems. Nakamura consulted with Kumazawa about performance tuning at the beginning of

36 Kumazawa points out that the advanced this company after this system had been capabilities provided by the Microsoft completed,” says Katō. “In the financial platform also contribute greatly to this high world, UNIX and Oracle are more or less performance potential. He says, “The ubiquitous, and I was honestly surprised hardware we are using employs the when I heard that this was built with SQL cutting-edge technology of the Non- Server 2005. In my last job, I was impressed Uniform Memory Access [NUMA] with systems involved in foreign exchange architecture, which can carry out parallel transactions worldwide. But when I came to processing smoothly. On the other hand, this company, they were using a system Windows Server includes functions that that cost probably one-tenth of those used draw out the architecture’s full capabilities. at these other foreign banks—to process Furthermore, the SQL Server engine also more transactions than those were able to has a structure specialized for NUMA, and deal with at peak times, with power to with this combination, the time savings due spare. If we assume the processing to parallel processing mean that we are capability is ten times greater, in light of able to achieve major improvements in cost cutback ratios, cost performance is one processing capabilities.” hundred times greater. Once again, I could not help but be surprised.” Another major feature of the new system is the achievement of both advanced Expensive standard products were not used capabilities through extraordinary cost for storage either. By using relatively performance and dramatic cost reductions. inexpensive products while taking reliability “We are combining Windows Server 2003 and load distribution into account in the and SQL Server 2005 with x64 server design, SBI Liquidity Market achieved still computers,” Kumazawa says. “The fact that further cost reductions while maintaining this came at a time when server hardware high performance. technology was showing dramatic progress made it possible to achieve unprecedented On the operational side as well, the use of high performance and low cost. Previously, the new system is moving forward steadily. we needed servers costing several hundred Okano, who is involved with online million yen to achieve an equivalent scale maintenance, explains, “We are considering with the same performance. With the the ways of using the tools provided in SQL current x64 server computers, we are able Server that are capable of online to buy one for 10 million yen, even with 64 maintenance and creating an optimal gigabytes of memory. As for cost backup schedule in consultation with performance, we were able to drop costs Kumazawa. We plan to continue to be by an order of magnitude while keeping involved with backup automation using the the same functions.” Task Scheduler in Windows Server, and we also plan to use it to address other issues.” Yūichi Katō, Manager of the IT Administration Department at SBI Liquidity Also, on the security front, the integration Market, spoke about his impressions of the of technologies with Windows Server has solution’s performance. “I have had long been productive. For example, Windows experience with foreign banks, and I joined Server 2003 interoperates with Microsoft

46 Internet Security and Acceleration (ISA) encountered new changes, it has been nice Server 2006, and it includes a built-in web to think that we made the right choice in server with Internet Information Services using Microsoft.” With its sprit of (IIS) 7.0. innovation as a springboard, the most Future Prospects recent trading system will blaze the way for SBI Liquidity Market plans to use its new the future of SBI Liquidity Market with its solution to address the challenge of overwhelming power. providing a leading global financial system that targets global expansion centering on the Asian region. Katō says that one important keyword when considering future use of the system is portability. “Future strategies that the president always stresses are networking and global expansion centered on the Asian region,” explains Katō. “In accomplishing this, the question of how quickly and flexibly the system can be expanded to various centers is important. Also, in our company’s work, how much ease of use we can provide to our customers sitting in front of their network terminals or PCs can be called an important mission. User interfaces built with the Microsoft Silverlight browser plug- in have received good reviews already for chart systems. For strengthening customer service as well, we have high expectations for Microsoft technology.”

Speaking of the future of the company and of financial systems, President Shigemitsu says, “Our company was established only two years ago, and we are proud of creating an organization roughly equivalent to that of listed companies. We are also proud of the efforts we have put into system creation. However, we have just started on our business model. Our true challenge going forward is whether or not we will be able to make it in the world by keeping abreast of changes in financial transactions, which continue to expand further and further. Also, when we

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