Thursday, March 05, 2009

A Response from Penny Crossman

Hi Marc,

I just came across this blog today — I guess I should check your blog more often! Thank you for reading my article, here's the self-serving link to it: Quant Fund Uses CEP for Smart Order Routing, Data Feeds

I've placed calls to set up a follow-up interview with Phase Capital and StreamBase to clarify this, but my article was based on an interview with Phase Capital's CEO Eric Pritchett and director of technology Geoff Goodell.

Goodell said, "We did a comprehensive evaluation of different OMS/EMS solution providers in the CEP space. Our goal was first to discern if a CEP solution was appropriate for our firm, then also determine which of these CEP solution providers were most well suited to our development paradigm and the kinds of analysis we’d need to be able to do to execute our strategies in the market. We looked at a number of providers, including Progress Apama, Coral8, Aleri and StreamBase, and we drilled down on these and tried to figure out what aspects of these different solutions were interesting to us. We’re a very heavily technology focused firm, not just for performance reasons but also because the algorithm, the process is our strategy, this is a fully automated process at its core, the code we developed to build our process is the product itself, and as such we need tools that enable us to build our product that will allow us to focus on the business problems without having to worry so much about the implementation details of the internals of databases. At the same time, we’re concerned to make sure we have tools we need.

Some of these CEP solutions seem like completely packaged solutions that strive to deliver complete trading algos against the market that will achieve low market impact etc., we’re not looking for that sort of thing because we are in the business of designing algorithms that get the best execution. So those are right out of the box. Streambase’s support paradigm we considered appropriate because Streambase is suited to working with developers, people who are actually able to build systems and algos that will achieve the kinds of detailed and specific execution properties we want. They have the infrastructure in place to work with us to make sure that what we’re trying to achieve is feasible given the internals of their database. This is one of the important characteristics that made Streambase win for us. The extractions were clean, it didn’t seem like they built their system around satisfying the needs of a small number of clients, the Streambase system is a platform for developing solutions, it’s not a solution itself. The idea of using a platform was extremely appropriate for our needs, because our goal is not to buy a packaged solution, our goal is to develop something using well-designed, modular tools and Streambase’s well designed, modular tools were appropriate."

Eric Pritchett said, "The process we went through was we selected a universe of potentials, we collected information about them the best we could with phone calls, researching websites, we went to conferences in New York, we did a little narrowing at that stage, we had detailed demos and interaction with the teams from the companies Jeff mentioned, we then narrowed that down to our final two: Streambase and Aleri. We had extensive, on-site working sessions with both of those teams and we did a thorough evaluation of the support paradigm and got under the covers with developers from both companies, that took about two months."

I have no reason to believe Eric or Geoff were lying, nor do I have a way of checking whether they downloaded other CEP vendors' software. They didn't actually claim that they downloaded every CEP solution in their evaluation. The CEP vendors who are attacking this story would be better served by getting Wall Street customer wins and getting those customers to speak on the record so that I can write case studies about them.

©2009 Marc Adler - All Rights Reserved.
All opinions here are personal, and have no relation to my employer.

No comments: