Nasdaq Takes a Chance on Windows NT

Windows NT has cracked the enterprise backroom of the Nasdaq Stock Market Inc. (<A HREF=""></A>). Windows NT’s big performance will come as the backbone of a Nasdaq stock monitoring system to be implemented in 2000.

Windows NT has cracked the enterprise backroom of the Nasdaq Stock Market Inc. (

The United States’ busiest stock exchanges have traditionally relied on proprietary hardware and software systems from high-availability specialists. Scalable and robust operating systems and hardware from Unix vendors only recently managed to log some playing time in the arenas, while Microsoft Corp., for the most part, has watched from the sidelines.

Windows NT’s big performance will come as the backbone of a Nasdaq stock monitoring system to be implemented in 2000. According to Nasdaq officials, the new securities monitoring software system -- dubbed the Surveillance Delivery Real-Time (SDR) application -- is designed to provide the information that helps Nasdaq’s MarketWatch department maintain a level playing field for investors and protect the integrity of the marketplace. SDR analyzes quote, trade and news transactions and sends alerts to MarketWatch analysts for review.

"Billion-share days are becoming increasingly common, stressing our existing surveillance system," says Gregor Bailor, executive vice president and CIO of the National Association of Securities Dealers Inc. (, the Nasdaq’s parent company. "Any new system also will need to be able to support a 2-billion-share day with the capacity to scale up to support a 4-billion-share day."

Therein lies the rub. Many critics in the IT community suspect Windows NT is not up to the challenge of error-free, continuously available operation in the service of frenetic, and potentially volatile, stock monitoring.

On Oct. 27, 1997, for example, the U.S.’s major financial stock exchanges experienced one of the largest trading days in financial history, with the Nasdaq recording a trading volume of 1.4 billion shares. The Nasdaq’s information technology infrastructure -- consisting of proprietary clustered Himalaya K20000 mainframes from Tandem Computers Inc. ( -- was taxed to the limit.

To assess the suitability of Windows NT for use as a securities monitoring platform, the Nasdaq commissioned Unisys Corp. ( to conduct a benchmark test in conjunction with Micro Modeling Associates Inc. (MMA,, a firm that specializes in building financial solutions and providing design and development services. MMA will design and configure the actual SDR on Unisys hardware.

The benchmark was conducted using actual trading data as a simulated workload, with two parallel systems processing similar data. The simulation demonstrated to Nasdaq managers that Windows NT could support peak conditions over an extended period; in this case, 800 transactions per second, continuously for an equivalent of eight trading days.

The simulation demonstrated consistent system operation within the scope of predefined service level metrics. The test provided analysts with problem alerts within 200 to 700 milliseconds -- well within a predetermined 2-second requirement -- and averaged well under a utilization threshold of 100 percent, with only 15 percent of the system in use at any given time. Most importantly, the simulation demonstrated recovery from failure tests with immediate availability of the backup system and without data loss.

According to Nasdaq representatives, the benchmarking effort exceeded all of the exchange’s specified goals. "SDR is a highly intuitive, fail-safe system," says Ed Flynn, Nasdaq director of architecture. "This is the best instrumented benchmark system I've ever seen."

This is not Windows NT’s first high-profile trial at a major exchange. The Chicago Stock Exchange (CHX) standardized its trading systems on Windows NT 4.0 in September 1997. But the Nasdaq’s decision to adopt NT represents the most significant such action to date by one of the two largest U.S. financial trading markets, the other being the New York Stock Exchange. The adoption of Windows NT by Nasdaq could lead to additional financial uses as NT has an opportunity to prove its mettle in high-profile, high-stress implementations.

"This is a big strategic win for Nasdaq and Microsoft, as this is the first commercial Windows NT-based system to conquer such high transaction volume," says David Osborne, MMA’s CTO. "A lot of trading firms are evaluating Windows NT 4.0 for its known price/performance value. This is the first tangible proof that high-volume performance demands can be met with Windows NT."