Saying Goodbye to $10K Per Position

Friday, 29. April 2011 15:58 | Author:

Certain measurements in life take root and become a reference point. For example, 12 inches equals one foot or four quarts equal a gallon.

In trader voice,  for as long as I have been doing it, the baseline metric for price-per-position (total purchase price/number of end users) has been $10,000 per position. Of course, this can change based on factors such as system size, configuration and negotiated discount, but, as a rule of thumb, this is as good as any. Note that with traditional turret suppliers this is an “after discount” figure as list prices can be as much as double, especially for small numbers of users.

Since WCS’s founding, one of our fundamental goals has been to put paid to that measurement through innovation. It started with the recognition that the vast majority of traders use a fraction of the capacity of their turret (the average sell-side turret user has 4-5 unique ring down circuits, a small handful of DID, some speed dials and another handful of lines that they may cover for other traders in their group; adding up to a need of somewhere between 20-100 virtual button appearances; the typical buy-side trader needs even fewer).

We also new from experience that a related bugbear for financial trading firms has always been that traditional turrets could not share line appearances with regular PBX phones. This necessitates the investment in a $10,000 turret for anyone who might need to have even a few ring down circuits or trading lines on their telephone. In addition, since traditional turrets do not offer many of the convenience of an office telephone (voice mail comes to mind), this might result in users having a turret and a telephone on their desk.

WCS has really changed all of this. With the introduction of a single platform system we eliminated the limitations associated with sharing lines among turret devices and phones. On our system, all devices are created equal(ly) and have access to lines in the system as well all of the turret and “PBX” features associated with the system.

By introducing a system that gives firms the option to offer dial tone (analog, PRI, SIP trunking) as well as trading turret capabilities in the same platform, WCS eliminated the requirement to purchase, integrate and support two voice systems.

Finally, The Crossover Series, our IP Trading Desktop portfolio, further disrupts the status quo by offering customers a choice of trading devices in various form factors, capacities and prices. Any of these  devices can support dial tone, ring downs, speed dials and pagination/floating answer keys while sharing lines with the 5560 IP Turret.

The price range of the Crossover Series desktop is $750-$2,750. This means that once you determine the mix of desktops and add in the back room elements and services the per position price for our system comes in drastically less than the old metric. And this is compounded to the positive for the customer when calculating total system life-cycle costs as annual operating costs are generally derived from the list price of the system purchased.

Brings to mind the old adage that “change can be  good.”

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Shopping for IT Like You Are Big & Tall

Tuesday, 19. April 2011 14:34 | Author:

Some stories just stay with you over the years. Like the one when my brother, who is somewhere between 6’3″ and 6’4″, told me he went to buy a suit in a Big & Tall store and they told him he wasn’t “big & tall” enough.

I have been thinking about this as it relates to our customers. Many are really small-medium size businesses (SMB = 10-500 employees) who traffic in very high dollar volumes and sophisticated securities instruments either as an broker-dealer or investment manager.

It is true that they often compete with the big boys and many of their employees have worked at bulge bracket firms but in reality they are truly SMB.

There is nothing wrong, per se, with thinking like a big guy, but if you aren’t one and you decide to shop at the Big & Tall shop you may not be getting the best fit.

What are the implications for firms like these across the continuum of evaluating, sourcing, deploying and supporting hardware, software and applications  that are critical to the mission of their business?

SMB lack the depth and breadth of resources that larger firms possess. This can affect their ability to stay abreast of the latest innovations and trends in the vendor ecosystem and can lead to knee-jerk, least path of resistance buying decisions. This might mean they:

  • Make the “going with what I know choice” by going with the next generation solution from their current vendor
  • Make the “default choice” by opting to go with what the big guys use
  • Make the “safe choice” by going with the current market leader

In the case of communications systems, this can mean living with the solution, service provider and cost structure for a decade or longer. Going with what the big guys use seems like it makes sense. After all, one might argue that he is piggy backing on the due diligence process of a large firm. The unfortunate thing is that SMB buying criteria should differ markedly from bulge bracket buying criteria.

What may compound this error is that when bulge bracket firms buy from industry behemoths they often do so because the market leader’s product (and support orientation) is optimized for their very largest customers. So you might be buying something meant for a different size customer and you may end up at the back of the line when it comes to that vendor’s priorities for providing service.

SMB, especially multi-location firms, need to be mindful of how they can efficiently roll out and support staff in branch locations and offer high availability, resilient systems for all users at reasonable costs. If a system is designed to be supported by highly trained, local IT staff you may have a lot of headaches dealing with the six person office in another city where the receptionist doubles at the IT resource.

At WCS, our products and service orientation are optimized for multi-site SMB financial trading enterprises who require high-performance, high-availability voice trading communications solutions that are scalable, flexible and manageable.

 

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Why”Wall Street” and “Trading Turret” Don’t Mean What They Used To

Friday, 25. March 2011 13:12 | Author:

When you see the term “Wall Street” what does it bring to mind? Of course, besides the film that captured the zeitgeist of 1980’s excess?

A quick read of the entry on Wikipedia states:

Over time Wall Street came to signify a geographic location encompassing a commercial downtown Manhattan neighborhood as well as signifying the historical financial center of the United States. The term has become a metonym signifying New York-based financial interests.

That word metonym really stands out. A metonym is a figure of speech in which a thing or concept is not called by its own name, but by the name of something intimately associated with that thing or concept. We know that physical proximity to Wall Street is no longer critical for the reasons it once was (physical exchange of stock certificates among trading partners) and that no matter the actual address of the NYSE, it exists as much in data centers that are many miles away from the iconic exchange floor we see on CNBC each day.

Another example of a metonym in finance is “hedge fund.” This term is now broadly applied, by many in the circles in which I travel, to any boutique-size financial firm, irrespective of whether the company is a hedge fund or not. And finally, we have the word “trader.” A catchall really for any person involved in the capital markets.

The word “trading turret” is becoming a  metonym for whatever communications instrument is on the desk in the various types of trading rooms around the world. Just as the term “trader” is loosely applied to everyone from floor brokers to portfolio managers to research analysts and anyone who may work on a trading floor. If the trading turret is to remain relevant it will come to mean many things to many people.

It is fairly certain that trading turrets will remain a specialized device designed to enable effortless communications. But as dominance in the financial industry continues to tilt toward electronic trading, the buy-side and complex trading strategies the evolution of trading devices and how they connect market participants must follow.

Thinking about the convergence of various types of communications further blurs the line on what a turret is or will be. The communications continuum may now include: instant messaging (IM), indications of interest (IOI), email, audio/video conferencing, plain old voice (POV?) originating from a land line or wireless device, texting, et al.

As we say at WCS, the “one size fits all” trading turret is no longer a sustainable product strategy for vendors. This is one reason why we introduced The Crossover Series of IP Trading Desktops in order to create a seamless communications capability among all employees involved in the trading process, whether on or off the trading floor.

We therefore have an already dynamic industry in a major business shift (sell-side to buy-side) and major technology shifts (electronification of trading and converged communications).

How will this all play out and what does it mean for those responsible for buying, supporting and using telecommunications in the capital markets?

Communications paradigms are no longer static
The revolution in consumer technologies has, by definition, changed how end users think about communicating. Traders expect to be able to communicate with colleagues, customers and counter-parties by any means, at anytime, from anywhere. The emphasis here is that the idea that you will give a trader a turret with a bunch of ring downs and speed dials and everyone goes on their merry way no longer applies.

Communications must be integrated
Not only will traders expect to be able to use the device of their choosing, they will expect it to be synchronized with all other devices and applications forming a single, virtual communications pod. This means that your vendors of choice better be offering open architectures and broad interoperability with other vendors in your ecosystem (unless it is Apple of course to whom the rules don’t really seem to apply).

Communications applications should be context-sensitive
Productivity in communications is driven by simplicity. The trader’s measure of satisfaction in communications is how quickly  it happens and how much useful data can I have at my fingertips while I am communicating? This will manifest itself in requests for integration with CRM tools, call histories and automated desktop search to name a few.

Communications infrastructure must be flexible and dynamic
Demands to be connected from home, from other offices and while traveling just as if they were at the trading desk are the order of the day. In order to meet these requests the communications systems must be offer the flexibility to connect securely over broadband, WAN and cellular and via a multitude of devices or applications.

At Wesley Clover we have embraced this vision since Day One. We recognized that a unified communications platform with powerful integration capabilities and an orientation toward interoperability with other leading technologies would be the first priority of our customers and collectively, we strive to make this our first priority everyday.

 

 

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