Financial markets today have become so dependent on well-designed technology architecture in support of growing automated trading business. I was recently part of a webinar centered on discovering how optimized latency performance, mitigation of microbursts, traffic filtering and analysis, and precise timing and synchronization are beneficial to all participants in the trading value chain.
The webinar was hosted by Wall Street & Technology, entitled, “Enabling High-Performance Trading Alpha: Beyond Low-Latency to Sustained Performance.” If you weren’t able to make it, register here to view a recording.
During the discussion, I was joined by some great minds in the financial services sector including Alex Tabb, Partner, TABB Group and Paul Jameson, Senior Director, Financial Services, Cisco. We discussed how high-performance trading fabric architecture and innovations like Cisco Algo Boost and the Cisco Nexus 3548 can help financial firms address challenges and capture opportunities in today’s financial markets. Here are a few key take-aways from the webinar I would like to highlight. Read More »
On November 5th I posted part 2 of the Algo Boost series with a fantastic discussion around Customer proof points on the Nexus 3548. In our third and final segment in the series I interviewed Chih-Tsung Huang, Director of Engineering in the Server, Switching, & Virtualization Product Group to shed some light on Cisco’s continued commitment to innovate with Algo Boost technology.
GD: What is the primary difference between existing Nexus 3000 switches and the new Nexus 3548? And how do we differentiate from the competition?
CH: As we all know, the current generation Nexus 3000 uses merchant silicon while the new Nexus 3548 uses a full layer 2 bridging and layer 3 routing Cisco ASIC – designed and built from ground up to optimize switch latency. Prior to the Nexus 3548 announcement, industry best was greater than 500 nanoseconds.
One of the stated elements of our corporate culture is “No Technology Religion”. The underlying concept is that we have the freedom to choose the solution that allows us to best meet our customer’s needs and not get locked into ideological silos.
Cisco continues to invest and drive innovations and standardization efforts with the development of our own ASICs because this allows us to deliver a complete value add solution to our customers. However, we do take advantage of merchant silicon in specific use cases where features and innovation are not needed.
GD: Does the introduction of Algo Boost indicate a complete shift away from merchant silicon?
CH: Absolutely not. Cisco has and will continue to adopt a flexible silicon strategy, meaning we will buy off-the-shelf ASICs when they can immediately fill a market need, and we continue to add value through silicon innovation by designing our own ASICs. The Nexus 3548 is an example of a highly integrated Software, Hardware and ASIC solution that cannot be achieved with off the shelf components.
GD: It sounds like we are very much committed to developing our own ASICs. How many ASICS are used in Cisco Solutions today, and how much do we invest in R&D?
CH: Cisco has developed hundreds of ASICs to perform various forwarding functions in switches and routers. Cisco has developed over 20 ASICs to power the Nexus portfolio alone. We have an annual R&D budget of $5.8 billion which is greater than Juniper’s entire revenues and roughly equal to the R&D budgets of HP and Huawei combined.
GD: Algo Boost clearly addresses needs in the financial sector. Are there any other segments that will benefit from these groundbreaking features?
CH: Since mid-2011, the Nexus 3000 family has had a significant presence in massively scalable data centers. We believe these environments will see further benefits with the performance visibility tools we’re building into our portfolio, as well as the programmability and automation features in the Cisco ONE offering.
We also believe that there is an important role for custom silicon in the software-defined networking world. We feel that customers will continue to be willing to pay for advanced hardware innovation because of the value they derive from tightly integrating advanced software and hardware engineering. Customers derive the greatest value from emerging software approaches, such as SDN, when they effectively leverage the underlying infrastructure which Cisco silicon innovation enables them to do.
Additionally, the 190 nanosecond ultra low latency of the Nexus 3548 switch enables applications to innovate not only to High Performance Trading Fabrics but also into Massively Scalable Data Center, Software Defined Network, and beyond.
I’d like to thank Chih-Tsung for this valuable information. To see an actual Algo Boost powered ASIC, view the TechWiseTV segment below..
Alas… the much anticipated FCS (First Customer Shipment) of the earth shattering Cisco 3548 Switch is now available. When your business depends on nanoseconds, this switch enables unprecedented advantages in lowest latency with a full feature set.
Customers should also bear in mind that in conjunction to announcing shipping units, our ecosystem partnership is more robust than ever. Our Nexus Engineering Team released a whitepaper detailing how the partnership validated end-to-end latency with real time NASDAQ market data from Universal E-Business Solutions, leveraged precise measurement tools from TS-Associates, Feed Handler processing from Enyx FPGA, and Network Test Access Points from Datacom Systems.
Read the whitepaper below in its entirety to see how Cisco continues to work with best of breed infrastructure vendors to deliver a complete solution in High Performance Trading.
On October 5th I posted part 1 of the Algo Boost series with a fantastic discussion around the latency innovations on the Nexus 3548. Today, we announced that these units are now shipping to customersand the much anticipated wait is over to get this game changing technology! This is perfect timing as I introduce part 2 of the series with Errol Roberts, Distinguished System Engineer for the top Data Center accounts, to bring a customer perspective to the ultra-low latency Nexus 3548 in a High Performance Trading fabric.
[GD] I know that you spend a lot of your time talking with customers. What are our Financial Services customers telling you about their environments and requirements?
[ER] When meeting with these customers, I like to ask a single question -- “What value can an infrastructure company provide to high-performance trading workloads”. Key points relating to the switching are captured by the following:
First, customers ask for a network solution and architecture that provides them with the fastest end-to-end functionality. Providing the “Lowest latency possible” is one vector, another vector being a rich “feature-set” answering the different architecture and network requirements end-to-end. Naturally there is a need for speed while at the same time providing the features within the same device. For example in collocated High Frequency Trading environments; the lowest latency being key; it’s not the only factor; support for the routing protocol such as BGP, multicast with PIM Sparse mode, ultra low latency SPAN at linerate with multiple ports; this is achieved with the technology called Warp SPAN.
Next, “Handle microbursts”. Volatility is correlated. When you are running cross-asset class, cross-liquidity venue strategies, there is often short-lived congestion that increases latency. These volatile periods are often the most opportunity rich.
Also, “Unique features”. They want features like Network Address Translation to meet their business needs. You don’t want these features to add latency. In fact you don’t want to have any of the L4 or services applied on the network to add latency.
Next, “Flexibility and Programmability”. They want to control their traffic flow, mirror relevant traffic, have fine-grained flexibility and also have reactivity on events. Python scripting language is a good example of automation. With Python script, you can have the switch react on different environmental changes such as a sanity check when the device comes online as well as for example triggering emails when the burst happening at the buffer level exceed for example 10 nanoseconds.
In addition, facilitate “Precision Time”. You cannot control what you cannot measure. Without precision time, you invest in an infrastructure and just hope you get optimal performance. With precision time protocol you can keep all of your servers and network elements highly synchronized at the nanosecond level. You can even measure the accuracy of the tool through a 1 pulse per second output port. Also, the Nexus 3548 can timestamp traffic with IEEE 1588, which allows analyzers to replay events.
The Nexus 3548 with Algo Boost was announced last week and received a lot of positive buzz around this game changing innovation. To follow up on Berna Devrim’s Introduction Blog, I am introducing a multipart series that goes into more specifics by Cisco experts. As part 1 of the series, I recently had the opportunity to have a chat with Will Ochandarena about the latency enhancements. Will is a Senior Product Manager in the Server Access and Virtualization Business Unit. In this role, he is responsible for the Nexus 3548 switch, and Cisco’s low latency switching strategy.
GD: The Cisco Nexus 3548 switch with Algo Boost was announced on September 19th and received a lot of positive attention. Can you elaborate a little more on the latency that this switch can achieve? How does this benefit our financial customers?
<WO>: The custom switching ASIC in the Nexus 3548, codenamed Monticello, sets a new bar for switching latency. Our engineers worked tirelessly to eliminate unnecessary nanoseconds from the forwarding path, tweaking it down to as low as 190 nanoseconds (ns). Best of all, this latency is achieved even when we are doing full layer-2 and layer-3 switching, with features such as Network Address Translation (NAT) enabled. We actually went as far as to offer a few different switching modes, each with different latency and forwarding characteristics, in order to give our customers the most flexibility in their deployments.
In terms of the impact on our end customers, we consistently hear from companies in the financial community that switch latency has a direct impact on the profitability of their business. Trading firms -- as well as the exchanges and other participants -- gain significant business advantage if the supporting infrastructure enables them to acquire data and execute trades nanoseconds faster than the competition.