Although Java-based technologies play key roles in the infrastructures of many institutional securities trading systems, they will become increasingly important for a variety of wireless, mobile trading options.
The portability, openness, and improving performance of the Java development environment have gone a long way toward making it a popular option for securities trading, industry observers say.
Extending Java from the internal systems of major financial firms to external, wireless applications is a natural evolution for many financial services firms, says Steve Katzman, global industry manager for financial services at Sun Microsystems Inc.
Java and related Web technologies have been accepted by major firms such as J.P. Morgan Chase, ABN Amro, and Daiwa Securities, as well as by retail trading firms such as Charles Schwab, Katzman added. To foster these "service-driven" networks, Sun in February inaugurated the Open Net Environment (ONE), consisting of Sun's Java2 Enterprise Edition (J2EE) and Solaris operating system and hardware, he says.
Whether or not IT providers embrace all of Sun's ONE effort, Java is likely to play a role in the future mobile trading offerings of many vendors, including IBM and Ericsson.
The recently formed IBM-Ericsson alliance will combine Ericsson Mobile Internet application building blocks, such as Ericsson Mobile e-Pay, Safetrader, and WAP (Wireless Application Protocol) Gateway, with IBM's WebSphere Web server infrastructure family, including WebSphere Everyplace Suite and IBM eServer products -- all of which can be supported with a Java-based infrastructure.
Not to be left out, Reuters, Compaq, and Sun partnered with two UK-based software companies: Isocra, a maker of J2EE-compliant application servers for business event notification and Java middleware, and SpiritSoft, a messaging tools provider. The companies joined forces for a proof-of-concept exhibit at the recent Wall Street on Java Technology conference in New York.
The Sun-Reuters-Compaq effort, dubbed the Mprism.net collaborative, incorporates Java tool technologies, Reuters' Instinet electronic brokerage bond trading service, and Reuters news and market data for trading via a Compaq iPAQ mobile device.
Mprism.net's potential offering, called iPRISM, will show how services can be delivered across an array of devices and networks via "an intelligent server infrastructure," says Duncan Johnston-Watt, the London-based managing director at Reuters' Instinet fixed income technology division. He anticipates that the Mprism effort will be used beyond financial services, especially in workflow where users need to remotely re-create the services of a human assistant, and will encourage further seed funding from other sources.iPRISM follows by a few months the debut of Switzerland-based Credit Suisse bank's wireless services for its Youtrade.com brokerage service. Delivered last November via Zurich, Switzerland-based developer Ergon Informatik, the system enables real-time trading on the Swiss Stock Exchange, the German New Market, Nasdaq, and the New York Stock Exchange. For the moment, the service targets European customers.
Ergon uses the Java2 Mobile Environment (J2ME) "to run small and portable Java applications on mobile devices" and has plans to offer more options, says Alois Sauter, vice president of sales and marketing at Ergon. Currently, the service runs on Palm PDAs and Visor hardware from Handspring.
"In the future, we will run [Ergon's software] on any mobile device supporting Java, such as the announced 9210 from Nokia," Sauter added. Ergon's approach for Credit Suisse provides "a more user-friendly interface" and incorporation of SSL (Secure Sockets Layer) 3.0 encryption as well as the functions of Palm platforms, he says.
All buzz aside, wireless trading is still in search of users, says Larry Tabb, an analyst at the Tower Group.
"This is still not mainstream technology," he explained. "Users are not banging the doors for trading from a bus."
For starters, the user interface, especially for cell phones, "has to get better," Tabb says. Wireless hardware providers need to develop larger, more interactive screens, he says, but the convergence of PDA and cell phone technologies is a step in the right direction.
Wireless network service providers and financial firms also "have to open up" in terms of access, Tabb says, noting that financial firms will have to provide ubiquitous access to their wireless networks regardless of the products and services used by customers.
Overall, wireless trading won't be "taking off for another three to five years," Tabb says. The next rounds of wireless protocol standards and hardware devices, and the presence of Java technologies, will determine the wider acceptance of mobile trading, he says.