Achieving Ultra-low Latency for the Financial Services Industry
Part 2 of a 3-part Series
Financial success in large securities, exchanges and trading houses come when they are able to receive, process, and fill market orders faster than the blink of an eye. Organization with even the smallest advantage can reap huge profits over the competition. This, in-turn, is driving organizations to optimize at the sub-millisecond level. Both the network adapter and switch are critical components in delivering very low latency and therefore, play a vital role in the overall success of latency-sensitive applications. Mellanox, has a heritage in building low-latency and high-performance networks and is the only manufacturer with an end-to-end Ethernet connectivity offering that features switches, adapters and cables. This places Mellanox in a good position to address the growing need for low-latency, high-performance solutions including high-frequency trading and other demanding applications, such as video streaming, virtualization, and big data.
In this second part of my three part series, I’ll be discussing the need for low latency and predictability from the interconnecting network for the Financial Service Industry and how the Mellanox Spectrum switches compare to competing products. This will help you better understand how to implement a competitive advantage. If you missed the first segment discussions on how Mellanox stays at the forefront of providing the lowest latency solutions, you can read it here.
Financial Services Industry
In order to maintain a competitive advantage, financial service organizations must constantly upgrade infrastructure and find new ways to accelerate data analytics, making trading and market data applications one of the most demanding in terms of data center networking requirements. Their goal is to find ways to incorporate the most advanced networking technologies that support ultra-low latency and the highest possible throughput, while maintaining the lowest possible total cost of ownership (TCO). Last year at the HPE Discover conference, Mellanox announced the availability of new 25/100Gb/s Ethernet solutions for ProLiant and Apollo servers that is enabling just that, new levels of networking performance at a new lower TCO (you can also read the blog introducing the joint new product here).
Mellanox has a long list of partners including Cumulus Linux with whom we jointly announced a best in class Network Operating System (NOS) to run on the Spectrum switch platform, (along with others). With the latest release of Cumulus Linux, Mellanox now has the necessary features to play in some of the most advanced data center networks. With support for features such as IP multicasting (PIM) and other added features important to HFTs environments such as hardware based telemetry on packet rates, buffer usage and congestion alerts, we have also implemented slow receiver multicast protection and fine-tuned buffer controls that reduce buffer overruns. To learn more about the advantages, a customer success webinar can be viewed here which showcases an innovative approach to achieving Cloud networking efficiencies of combining Cumulus Linux with Mellanox Spectrum switches.
Mellanox offers one of the most complete solutions for the Financial Services Industry and Broadcast networks and with the unique position of having the only ultra-low latency switches on the market with 25, 50 or 100GE interfaces, the Mellanox solution allows for building the lowest latency networks. The financial service industry is now taking notice and to aid in getting the message out, Mellanox has partnered with Cumulus and CDW to bring a series of roadshows to demo the low latency and rich feature set that Cumulus and Mellanox offer to the High Frequency Trading (HFT) market. The roadshow will be traveling to three different locations. To find out more information visit the HFT Roadshow registration page.
Latency and Message Rates
Latency is the most important consideration in most financial services applications and is very important in HFT environments. Lower latency means there is less delay receiving market data and less delay in delivering it to applications for processing. It’s also key in cutting delays for executing market orders, this all means that decisions are arrived at quicker and orders can be fulfilled in less time. For these reasons, trading platforms, especially those supporting algorithmic trading, require latencies of less than 5 microseconds with extremely low levels of packet loss. Not only must trading technology solutions deliver low-latency despite a high volume of data that is being moved, but they also must be able to sustain performance through market data traffic spikes, all while minimizing network jitter and properly handling unpredictable messaging outliers. To accomplish all of this requires an end-to-end solution that includes the transport layer of the server and network infrastructure and possibly enterprise messaging software for added acceleration (more on this in part three of this series).
Mellanox Spectrum Switches
The Mellanox Spectrum switch just happens to be designed specifically to handle these type of environments and does so better than any other switch on the market. But don’t take my word for it. I recommend that you download the third party benchmark by The Tolly Group. The Tolly report provides a benchmark of the performance and predictability of the Mellanox Spectrum ASIC compared to Broadcom Tomahawk, which is the merchant silicon chip used in a large percentage of competitive 25/100G Ethernet switches on the market today. The Tolly Group’s testing uncovered a variety of issues with the Broadcom switching ASIC including, frame loss, inconsistency in throughput, higher latencies and unpredictable buffering.
The overall performance of latency sensitive applications relies heavily on a switch’s ability to move a frame of data to its destination point. While Mellanox showcased zero frame loss across all frame sizes and testing rates, Broadcom exhibited up to 30 percent frame loss. When both were tested for latency, Mellanox consistently achieved lower latency across all packet sizes – delivering in some cases – as much as a 90 percent lower latency than Broadcom. This report unequivocally establishes the reliability and performance of Mellanox’s Ethernet switch portfolio, specifically demonstrating the capabilities of the Spectrum switches ability to provide data centers with zero-loss frame rate performance while delivering wire rate data transfer at all packet sizes, with better buffering, and the industries only low latency 25GbE or higher switch.
Before Mellanox introduced our Spectrum-based switches, there was a gap in the switch market for high-performance, latency sensitive applications due to the low latency switches from Cisco and Arista which are capped at 10GE speeds. Their 25G (or greater) switches average latencies that are ten times higher than their own 10GE switches, making them irrelevant for trading and other such environments where as Mellanox Spectrum switches are capable of less than 300 nanoseconds of latency. As we saw from the Tolly performance report, there is also no silicon on the market besides Mellanox Spectrum that is able to deliver 25, 50 or 100GE throughput in a low latency switch. Mellanox is the only solution the Financial Services Industry has for speeds greater than 10GE due to having 10-20 times lower latency than Cisco’s and Arista’s new 25 to 100GE switches.
In 2017, we will begin to see the first change that will have a drastic impact on latency sensitive environments as 10GE server connections and networks begin to be replaced with 25, 50 and 100GbE connections. This is because 10GE can bottleneck the performance of newer servers and high bandwidth flash-based storage and cannot provide enough bandwidth in ultra-high definition video solutions. In the first two segments of this three part series, I discussed how Mellanox is well positioned to be the adapter and switch of choice for the financial sector as they start to migrate to 25G and greater speeds. In the final segment, I’ll introduce how Mellanox compliments our hardware with acceleration software to significantly enhance application performance through I/O latency improvements, higher bandwidth, and increased message rates, all while reducing CPU utilization. I hope the conversation has keep your interest enough for you to come back to read the final segment of this series.