true cost of latency
DESCRIPTION
This presentation demonstrates how the combination of Push Technologies 'Diffusion' and GemStone's 'GemFire' can reduce the cost of latency.TRANSCRIPT
The true cost of latency
Christian JamesProduct Manager
Push Technology Ltd
Mike StolzVP of Architecture
GemStone Systems Inc.
Agenda
• What is latency• The cost of latency• Combating latency and its hidden barriers• GemFire/Diffusion alternative• Q&A
Latency is everywhere
What is latency?
Derivation of latent, a noun
• The Concise Oxford Dictionary– Latent adj. & n.
• 1) concealed, dormant • 2) existing but not yet developed • [][] Latency n.
• Wikipedia– The time delay between the moment something is
initialized and the moment its first effects begin. The word derives from the fact that during the period of latency the effects of an action are latent, meaning "potential" or "not yet observed".
It is not just the network
• Infrastructure Latency – Low Level
• OS/Kernel • Processors/CPU’s• Storage I/O
– High Level• DNS and Routers etc.
• Software processing Latency• Transmission Latency• Service Dependency Latency• Propagation Latency• Front End/End-User Latency (80-90%)
Total latency equals
Disk access+
Sender overhead +
Time of flight +
Message size/Bandwidth ** +
Receiver overhead
** Potentially misleading
HardwareAnd
Software
In the context of an ‘e-trade’
T0 = Price Generation
T1 = Spread
T2 = Distribution
T0 = Price Generation
T1 = Spread
T2 = Distribution
T6 = Hedge?
T1 = Spread
T2 = Distribution
T1 = Spread
T5 = Calculate bank’s position
T4 = Book trade
T3 = Pre-trade credit checkT2 = Distribution
T1 = Spread
T6 = Hedge?
T2 = Distribution
T1 = Spread
T5 = Calculate bank’s position
T6 = Hedge?
T2 = Distribution
T1 = Spread T4 = Book trade
T5 = Calculate bank’s position
T6 = Hedge?
T2 = Distribution
T1 = Spread
T3 = Pre-trade credit check
T4 = Book trade
T5 = Calculate bank’s position
T6 = Hedge?
T2 = Distribution
T1 = Spread
Transmission
Propagation
Service
End-user processing
Why worry about it
It Costs!
The cost of ignoring it is high, and its not just trading systems
• Amazon – every 100ms of latency cost them 1% in sales
• Google – an extra 0.5 seconds in search page generation time dropped traffic by 20%
• Financial – “If a broker’s electronic trading platform is 5 ms behind the competition it could loose them at least 1% of their flow – that’s $4 million in revenues per ms” (TABB Group)
In the context of an ‘e-trade’
Difference in price at T0 and T6 X Amount traded is the Cost of Connectivity (COC) – or Cost of Latency
T3 = Pre-trade credit check
T4 = Book trade
T5 = Calculate bank’s position
T6 = Hedge?
T2 = Distribution
T0 = Price Generation
T1 = Spread
End-user processing
Every pip difference between T0-T6 reduces your profit
£10,000,000 @ 1.6489
T0, make a price of 1.6489/1.6490
T6, hedge the trade, market price now 1.6484/1.6485
£10,000,000 @ 1.6485
Negative P&L of £4,000versus
Positive P&L of £1,000
Doesn’t sound a lot until you consider the trillions traded in a dayand the speed that prices can be changing (8+ times a second)
“Latency Exists, Cope!” (Dan Pritchett)
Combating it,
and its hidden barriers
Hardware or software?
Moore’s law makes hardware seem like the logical option?
The same can’t be said for corresponding speed gains, they are slowing
CPU Clock Speed, Moore’s law still exists (for how
long)but for different reasons –
plus Memory/RAM Wall broken
Ram Speed (limited to distance from CPU)
Desk I/O PS
Network
Speed of light
Sp
eed
Date
Economic cost isn’t the only challenge,supply is running out
• 60-70% of IT budgets spent on operational costs (CIO Magazine)
• 5% of IT budgets spend on energy (BBC)• 1996-2006 no. of servers in London increased
from 6 28m. • Avg. power consumption of each increased from
150 400 watts.• In 2007 it was predicted London would run out of
power in 2009
Still, doesn’t matter I am in financial servicesI can afford it – what about society!
• 19 Data centres in Eastern Region use 6 X the power of Ipswich (BBC)
• Financial Services (Inside Market Data):– FS accounts for 8% of global GDP (or did)– ICT accounts for 4% total energy consumption– Hence, FS carbon emissions accounts for between
0.32-0.5% of total carbon emissions – and growing
“Morgan Stanley is committed to the environment. This is true in all aspects of our business, including how we evaluate companies, transactions and risk; how we
collaborate with and serve our clients, financing partners and employees; how we conduct our own operations; and how we promote and develop new market
opportunities," affirmed John Mack, Chairman and CEO of Morgan Stanley.
Data centres aren’t the only element in the mix where supply is under strain
• “Net bombs” are gobbling up the internet– YouTube = using the same amount of traffic as the
entire internet in 2000– iPlayer 5% of UK internet usage.
• Monthly internet traffic is running at 8 exabytes (million trillion) – one exabyte is equivalent of 50,000 years of DVDs
• 2007 traffic grew by 75%, capacity by 45%• Brownouts/jitters are due to start in 2010• What is the alternative?
How we tackle it
Get smarter with less"Hardware can give you a generic 20 percent improvement in performance, but there is only so far you can go with hardware. “ Rob Wallos, global head of market data Citi
Transmission
In the context of an ‘e-trade’
Propagation
Service
T3 = Pre-trade credit check
T4 = Book trade
T5 = Calculate bank’s position
T6 = Hedge?
T2 = Distribution
T0 = Price Generation
T1 = Spread
End-user processing
Demanding business requirements and drivers
• Speed, Stability, Scalability• Increase the number of markets offered• The ability to offer more volatile markets• Deliver to more channels• Improved marketing/advertising capabilities• Minimize unmatched orders/bets• Global distribution and real-time replication• Localized Data creating better user experience• Cost effective
Connecting your clients in the mostlatent efficient manner
Load BalancerLoad Balancer
DiffusionInternet
Message Broker
ApplicationLayer
Load BalancerLoad Balancer
Europe Asia
DiffusionInternet
Message Broker
DiffusionInternet
Message Broker
ApplicationLayer
DiffusionInternet
Message Broker
DBDB
GemFire
DBDB
GemFire
The enterprise data fabric
GemFire, by GemStone Inc
In essence, a suite of low latency communication products
• GemFire allows you to create a highly resilient, elastic, enterprise data fabric to improve performance while simplifying your architecture.
• GemFire enables you to safe-store and receive data and events to and from any back-end data source and pass notifications off to Diffusion.
GemFire – Enterprise Data Fabric
Performance, efficiency and message ‘byting’
Diffusion, by Push Technology Ltd
In essence, a suite of low latency communication products
• Diffusion allows you to create a two-way secure real-time online channel between an organisation and its audience.
• Diffusion enables you to push and receive data and events to and from any current, or future, “net” connected device including the web browser.
Diffusion – the power behind the Net
Smaller messages optimally delivered, reducing latency and foot print
• Best Message Delivery (BDM)– Conflation– High/Low Water Marks– Throttling (could be used to level the ‘playing field’)
• Compression• Your own message format avoids unnecessary
transformation/serialization • Only send deltas - reduces size/amount of data sent• Hierarchical topics - reduces size/amount sent to finest grain• Implemented sites have seen up to an 80% reduction
in bandwidth consumption and hardware infrastructure
Hierarchical topics, in context of FX
Strong focus on performance & efficiency, driven from the server
• NIO technology ensures data moves through Diffusion as quickly as possible
• Zero Copy• Zero Fan-out• Bi-directional, no need to open another socket
when sending information (executing a trade) back to the server as you would with a web request
• Implementing sites have seen up to 75% reduction in hardware requirements
