Max Bowie: You Can Trace a Data Platform's Pedigree to its MAMA

Max looks at the OpenMAMA messaging API.

Max Bowie, editor, Inside Market Data

Tight budgets continuing from the fallout of the financial crisis are prompting firms to consider alternatives to incumbent data solutions. But sometimes incumbents are so tightly integrated that they become expensive and time-consuming-if not technically impossible-to displace. Max asks whether growing support for the OpenMAMA messaging API could change that.

Despite growing up on a farm among goats, horses and dogs, I confess to knowing very little about breeding. However, I do know that a farmer and a market data technologist would be at odds over the definition of "best of breed."

In the world of capital markets technology, we use this to refer to platforms constructed using the best components and content sources from the leader in each field. But a farmer or horticulturalist would be more likely to call this a "hybrid"-the splicing of two or more genetically different plants or breeds to produce something more valuable.

In farming parlance, best of breed would more accurately reflect a single vendor's premium product-often tightly integrated market data infrastructure solutions that are hard to unwind and replace, and are often used to protect incumbent business, no matter how much a firm may want to switch to an alternative provider.

Displacement Strategies

For years, firms have pursued their own displacement strategies to create true best-of-breed data architectures, with limited success, while projects such as Collaborative Software Initiative tried to create abstraction layers to facilitate these moves-itself failing to get sufficient buy-in, falling in the middle of the economic downturn-even if these promised savings, flexibility and value further down the road.

There now appears to be greater momentum around change, and—with the maturing of the OpenMAMA open-source messaging technology—a vehicle to achieve it.

Yet, there now appears to be greater momentum around change, and-with the maturing of the OpenMAMA open-source messaging technology-a vehicle to achieve it. OpenMAMA's source code was open-sourced in 2011 by NYSE Technologies based on the Middleware-Agnostic Messaging API layer built by Wombat Financial Software, which NYSE acquired in 2008.

However, NYSE Technologies-assembled via a string of such acquisitions-never achieved the lofty ambitions of its owner (former NYSE Technologies chief executive Stanley Young once laid out plans to grow it to a $1 billion-a-year business), and was ultimately broken up and spun off in pieces by new owners Intercontinental Exchange, with ICE CEO Jeffrey Sprecher saying "The NYSE Technologies assets are good businesses. They're just things that my colleagues and I don't understand, and I don't think we should be in businesses that we don't understand."

Vested Interests

Yet with broad industry support, and removed from a single owner with vested interests, OpenMAMA is showing the promise of being able to succeed where previous efforts failed.

In two recent examples of such industry support, London-based market data toolkit vendor Tick42 has built a "bridge" between OpenMAMA and Thomson Reuters' Enterprise Platform (TREP-formerly known as RMDS), ostensibly for connecting different data sources to TREP, but also to allow developers to write applications to the OpenMAMA API rather than directly to TREP, ultimately giving them the option of removing TREP altogether and replacing it with a different vendor's solution; while low-latency feed handler and ticker plant vendor SR Labs-which acquired the Wombat business and MAMA API from NYSE Technologies last year-is building a new hosted data management platform that incorporates tools for compliance and usage monitoring, but which also integrates OpenMAMA to make it easier for firms to connect applications, and to swap out parts of other vendor's infrastructures in favor of its own platform, using OpenMAMA as a sort of abstraction layer that standardizes vendor connections.

The great thing about these initiatives is that they don't necessarily end up displacing a specific vendor, but provide customers with more choice, forcing vendors to be more competitive and responsive.

If an incumbent vendor ups its game to fend off rival vendors who are now in a better position to compete, then it may well remain the incumbent, and either way, the customer is happy. When you reach that point, it doesn't matter whether you want a best of breed or a hybrid-what matters is being able to choose either.

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