OStatic

This morning I sat back and noticed the increasing rate at which I am getting notices about open source software making big headway in the trading and financial services industries. For example, the folks at GroundWork Open Source--which does commercial open source and network management software--sent me notice of these brand new customers of theirs: Prager Sealy, Commonwealth Financial, National Australia Bank, Royal Bank of Canada, Stark Investments and Sterling Savings Bank. On top of that, this post from The Linux Foundation provides an eye-popping look at how many big trading exchanges now run Linux. One of the big drivers for this trend, I think, is how even minute reductions in the cost of electronic transactions can be huge cost savers.

Consider this quote from Mary Knox of Gartner Research, reporting results from a survey: "The adoption of OSS continues to increase among banks and investment services firms. Among the investment services firms surveyed, approximately 84 percent expect to be using open source software by the end of 2008. Adoption is most notable in this category because they are impacted by escalating transaction volumes and data processing requirements as well as cost pressures.�

There are even companies focusing on making entire trading platforms open source, with an eye on rock-bottom transaction costs. We've covered Marketcetera in this space before, and the company has solid VC backing.

As Jim Zemlin at the Linux Foundation writes, The New York Stock Exchange, The Chicago Mercantile Exchange and the Tokyo Stock Exchange all run on Linux. Zemlin adds this: "NYSE Euronext and its family of exchanges which include the NYSE, Euronext, Liffe, Alternext and NYSE Arca Options, operating in the US and Europe, now run on Red Hat Linux and look to Red Hat for support and services. Put it another way, over 4,000 public companies and over $141 billion in daily stock transactions depend on Linux."

Lower transaction and cheaper network administration costs are the big trends here, and the current economy and its effects on investors also weigh in. If the current economy worsens, and it's sure not looking good, these trends are likely to speed up even more.

• linux
• GroundWork