MS pushes NT for securities

The software giant says it will expand its Windows DNA for Financial Services framework (DNA-FS) beyond banking and into the securities industry.

3 min read
Pushing into Sun Microsystems' (SUNW) territory, Microsoft (MSFT) said today it will expand its Windows DNA for Financial Services framework (DNA-FS) beyond banking and into the securities industry.

Microsoft's goal: to sell its Windows NT Server software as a platform to automate all the paperwork involved in buying and selling securities, a market which Sun has dominated. The company also hopes to gain from the consolidation trend among banks, stock brokerages, and insurance companies.

"Sun is the competitor in this market," Microsoft's Matt Conners, worldwide securities industry manager, said.

In a related announcement, Tibco, owned by Reuters, will port its financial messaging middleware to the Windows NT Server platform. Hewlett-Packard will support deployments of Tibco's system with the consulting and PC servers.

The announcements, part of Microsoft's effort to move its technologies into vertical industries that Unix has dominated, came in Bill Gates's address by satellite today at a financial services conference in London. DNA stands for Distributed interNet Applications for Financial Services (DNA-FS), a software framework that allows software components to connect to mainframes, WebTV systems, and other computers.

Gates also today reiterated Microsoft's plans to ship a second beta test version of its Windows NT 5.0 operating system by mid-year, followed by the final version within six to nine months afterwards.

"We're doing very well on the desktop--we've replaced a lot of Unix workstations," Conners said, estimating that in the retail brokerage segment, more than a quarter of desktops run NT Server. Those figures are boosted by Merrill Lynch and Smith Barney using NT in their retail operations. "It's probably less on trading floors."

Far less, says Rob Hall, vice president in Sun's unit that sells to the securities industry.

"The trading floor is still predominantly Sun, and we see our Darwin entry-level workstation, and especially our thin client technology and products offering us a chance to grow that market share," said Hall.

Sun's competing architecture for securities firms is called Sun Connect, which was demonstrated last June at the Security Industries Association trade show. Microsoft hopes to demonstrate its DNA-FS architecture at this year's SIA show.

Hall said Sun Connect embraces Java-based network computers (NCs), not just Windows desktop machines. Wall Street has strongly endorsed Java, according to recent surveys, and Hall called Microsoft's failure to address Java in DNA-FS "a glaring omission."

Like Microsoft's DNA-FS, Sun Connect also targets the convergence in financial services--banks, insurers, and brokerages getting into one another's businesses, often through mergers or acquisitions.

Microsoft's immediate goal is to create NT-based solutions to the so-called Straight-Through Processing (STP) problem. Stock trades must wend through multiple computer systems at different companies, a system that is not fully automated. Microsoft hopes its partners, such as Tibco, will build NT software to streamline transactions by passing digital information from one computer system to another and by minimizing paperwork.

The underlying technology in Microsoft's effort is Component Object Management or COM, which puts information into digital wrappers that can be passed from computer to computer, including mainframes and Unix machines.

Sun's Hall faulted Microsoft's initiative for relying on its COM architecture, used in Windows but not endorsed by an industry standards group such as Open Group, which backs CORBA for similar purposes.

Today's announcement expands DNA-FS, which was announced last month for banking, to the broader securities market. A similar effort in the insurance industry, called OLifE, also will be grouped under the broader DNA-FS framework.

"The goal of DNA FS is not to facilitate convergence of industries at all; but it's clear those industries will converge," Conners said. "DNA FS will be a technical solution for when those industries converge to be able to plug in software."

Tibco's involvement is key because it has 400 customers and about half the market for trading floor software. The port to NT Server will take less than a year, Conners said.

Several software vendors backing Windows DNA-FS for securities include Advent Software, Comprehensive Software Systems, Dow Jones Markets, and Financial Technology International.

Microsoft and partners hope to reduce the costs of processing transactions by building on established standards in the financial services industry.

Reuters contributed to this report.