Universal Commodity Exchange Plugs into Open Source for Competitive Advantage

By running its mission critical SAP ERP solution on SUSE Linux Enterprise Server, Universal Commodity Exchange has been able to improve its performance and reliability while reducing the total cost of ownership.
Being a next-generation national level commodity exchange for derivatives market,Universal Commodity Exchange (UCX) not only ensures price transparency and a robust risk management but also provides surveillance system for facilitating online trading, clearing,and settlement operations for the market across the country.

As a new start-up looking to win market share against established competitors, the exchange needed to hit the ground running with a fast and highly reliable trading platform that would allow it to operate more efficiently and at a lower cost-per-transaction.

Another objective that the exchange wanted to achieve was flexibility, as it was dealing with different applications for supporting its end-to-end trading process.

To meet its business requirements, UCX was looking for a future-ready platform. The major advantage for the exchange was that unlike its competitors, who face significant risks in migrating away from their legacy systems, UCX had no constraints.

Sharing his views about the importance of technology for financial exchanges, Choudhury further says, “IT is a critical element for financial exchanges, and IT spend may represent up to 30% of our revenues, so technology is a really important strategic decision for us.”

“We had the opportunity to build a highly flexible and reliable trading platform that would allow us to operate more efficiently and at lower cost-per-transaction than our competitors. We wanted an open, scalable, and fault-tolerant operating system with strong local support that would enable very fast time-to-market,” says Anjan Choudhury, CIO, UCX.

 

TAKING THE OPEN SOURCE ROUTE

Evaluating its business requirements and goals, UCX decided to opt for Linux, as it could be used across different architectures.

“Based on my positive experience of SUSE’s support and engineering resources in a previous role—in particular, the ease of migration from Microsoft—we chose SUSE Linux Enterprise Server,” informs Choudhury.

Today, UCX is running dozens of instances of SUSE Linux Enterprise Server, both on dedicated physical servers from Dell and IBM, and using the built-in Xen virtualization capabilities. These support a variety of infrastructure services, as well as the company’s mission critical SAP ERP landscape.

The entire infrastructure is hosted and managed in highly resilient twin datacenters by UCX’s technology partner, Wipro. “Linux is our roadmap for the whole trading system, and we are engaged in a staged migration away from Windows,” states Choudhury.

Financial exchanges typically handle settlement and clearing as end-of-day batch jobs. To streamline the process and provide real-time transparency, UCX integrated its core SAP financial software with settlement and clearing systems and also with its banks and other
partners.

THE IMPACT

With migration to SUSE Linux Enterprise Server, the exchange has gained the availability and performance it needed at lower total cost of ownership. Further, UCX can now roll out a complete new instance of SUSE Linux on a physical server in less than two hours. “Rolling out a complete new instance of SUSE Linux on a physical server takes less than two hours, which is helping us maintain our time-to-market edge over competitors,”
asserts Choudhury.

In addition, offering rapid trade settlement is an important benefit for the brokers who use the UCX, helping them maintain an accurate view of their financial position and manage margin calls to their clients. With key components of the solution running on SUSE Linux Enterprise Server, UCX has gained confidence in the reliability and resilience of its settlement services.

“In a financial trading scenario, there’s no way to roll back from mistakes or outages, so we need absolute reliability and accuracy at all times,” says Choudhury.

“With the strong support we enjoy both from SUSE and Wipro, we know that we can rely on SUSE Linux Enterprise Server to run our business. The operating system also provides the strong security that we need to protect financial transactions,” adds Choudhury.

As UCX continues to grow its business and develop new offerings for clients, advantages like flexibility and rapid deployment of SUSE Linux Enterprise Server are key as it will help the exchange thrive in the competitive marketplace.

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