Microsoft SQL Server 2005 Customer Solution Case Study

Barclays Capital Achieves Guaranteed Reliability and Performance with New Fixed-Income Solution

Overview
Country: United Kingdom Industry: Financial Services Customer Profile Barclays Capital is the investment banking division of Barclays Bank Plc. With a distinctive business model, Barclays Capital provides corporate, financial institutions, governments, and supranational organizations with solutions to their financing and risk management needs. Business Situation Barclays Capital needed to ensure queries made to its trade management system (TMS) did not delay business critical information reaching its traders. Solution With the support of Microsoft Services and IT consultancy ThoughtWorks, Barclays Capital developed a new back-office solution based on Microsoft SQL Server 2005. Benefits Database queries no longer slow position updates Scalable solution supports anticipated growth Performance of Web services increased by 30 per cent XML data type provides flexible

The built-in reliability and latency guarantees of TAPS, based on SQL Server 2005, means Barclays Capital traders have up-to-date information on which to base their decisions.
Robert Byrne, Director, TAPS Development Team, Barclays Capital

Barclays Capital is one of the stellar success stories in investment banking of recent years. The firms projected growth plan required the bank to review its existing fixed-income trading system, to see how it could handle an increasing amount of trading volume. After close consultation with Microsoft Services, Barclays Capital decided to update its existing trade management system (TMS) system with a solution based on Microsoft SQL Server 2005. The new system is designed to process the increased volumes with a much more predictable latency. The Trade and Positioning System (TAPS) solution based on SQL Server 2005 minimises the latency between trade capture and risk updating.

Situation
Barclays Capital, the investment banking division of Barclays Bank Plc, is an award-winning player in the global finance and risk management markets. The firm provides large corporate, government, and institutional clients with solutions to their financing and risk management needs. Barclays Capital decided to update its existing fixed-income trading system (TMS) to handle increasing trading volume. The purpose of the project was to review and update businesscritical elements. Process Trades at Maximum Efficiency A near real-time knowledge of market prices is critical to dealing effectively with price fluctuations or the organisation would soon begin to see its profits tumble. As a result, every stage of processing a trade must operate at maximum efficiency. To ensure the transaction is processed as quickly as possible, the trade management element needs to have robust software. However, as Robert Byrne, Director of the TAPS Development Team at Barclays Capital, explains, the existing system needed to be updated: We felt the system might struggle to meet the challenges of our growth target for trading volumes. Andrew Muir, Microsoft Programme Director, Barclays Capital Project, adds: If your view of the market is merely seconds behind what is actually happening, someone could have bought or sold hundreds of thousands of dollars of bonds off you at a suboptimum price. Andrew Nash, Architectural Consultant, Microsoft, says: TMS was designed as a generic storage engine for storing XML, but over its five-year history it has evolved to handle numerous other operations that it was not originally intended to manage. It had reached a point where it was being asked to cope with volumes that it had not been designed for. Enable the Firm to Handle a Range of Standard and Bespoke Instruments A derivative product created specifically with a particular customer in mind is termed an exotic instrument. Because these are devised by a trader for a single client, they are far more complex than standard vanilla instruments, which are generic and used across the board. Because of this complexity, the trade store must be flexible enough to handle new structures without schema changes. Byrne says: The challenge is to have a system that meets the throughput and latency needs of the vanilla business, but still has enough flexibility for the exotics business.

Solution
Barclays Capital is a keen exponent of Microsoft technology and in the high-profile world of investment banking, the two organisations have established a long and successful relationship. With the advent of Microsoft SQL Server 2005, which is part of Microsoft Windows Server System integrated server software, the bank saw an opportunity to update its architecture and prepare its

operations for continued rapid growth. The decision to update the system also hinged on the close integration of the Microsoft Visual Studio 2005 development system with SQL Server 2005. New functionality within Visual Studio 2005, in particular its support of the Microsoft .NET Framework, offered benefits to the Barclays Capital development team.

Early Dialogue Charts the Path to Success Owing to the importance of the project, Barclays Capital and Microsoft Services entered into an early dialogue to ensure both organisations understood exactly what was required of the project. Senior business and technology representatives from each group met frequently to agree the project architecture and identify the three critical business drivers: Provide traders with a guaranteed view of their positions Process trades at maximum efficiency Improve the environments ability to seamlessly handle a range of vanilla and exotics instruments

Virtual Server 2005 Accelerates the Testing Phase Following talks with leading members of the SQL Server 2005 development team, the project got the green light in November 2004. Initial development work began in early 2005. Microsoft Services assigned 11 full-time staff to the project, which was also supported by IT consultancy and Microsoft Certified Partner ThoughtWorks. The firm helped implement an agile process for the development of a continuous buildand-test cycle. Graham Brooks, Senior Consultant at ThoughtWorks, says: We worked with Microsoft beta products to develop test tools and frameworks. We used these to support regression testing and provide a quality bar for the development of the new solution. ThoughtWorks used its experience as an innovator in the application of

agile software to develop virtual hardware using Microsoft Virtual Server 2005, which is also part of Windows Server System. This tool lets developers create a virtual cluster that acts just like a real cluster, without the expensive hardware. We used Virtual Server 2005 not only to unit-test, but also to execute system tests, and build verification tests. In doing so, we helped ensure the transition to the new solution would be as seamless as possible, says Brooks. New Environment Offers Latency of Less than 100 Milliseconds The final design of the storage element of the new back-office architecture, named TAPS, will incorporate databases in multiple global locations, each measuring in excess of over 100 gigabytes. These will all communicate simultaneously and changes will be replicated among them. The main service that this architecture provides is the ability to store, retrieve, publish changes, and query data held in the store. For the TAPS implementation this will focus on storing trades and static data. Where necessary, the interface will be specialised to implement logic that relates to a specific type of data such as trades or books. The diagram overleaf shows a high level architectural view of the final TAPS system, including all the major components. The diagram above shows a high level architectural view of the final TAPS system, including all the major components. There will be a phased transition to this architecture. It will use a TAPS/TMS

hybrid as a migration step between the current TMS system and the final TAPS system. A Four-Phase Rollout Barclays Capital agreed that a proposed four-phase delivery of the SQL Server 2005 project would prove most effective, and the two organisations agreed on the following structure: September 2005improvements to queuing in the existing system

The .NET Framework 2.0 support makes it easier to upgrade incrementally, because the interoperability with other technologies is so good. Without the .NET Framework 2.0 support, we would have been forced to migrate large chunks at a time, which we were reluctant to do.

By mid October, Barclays Capital was running SQL Server 2005 in parallel with the existing TMS solution. The new solution employs existing datastore architecture, using an underlying replication service, to confirm the ability of SQL Server 2005 to handle volumes. This process also safeguards against any systemic risk. Key Functionality Barclays Capital identified several new features of SQL Server 2005 as essential to the creation of its new environment, based on its agreed business-critical requirements. .NET Framework 2.0 and Web Services For an investment bank, the notion of downtime is anathema. To overcome this, it deploys new technology through incremental migrations. The .NET Framework 2.0 support provided by SQL Server 2005 has proved critical to the smooth completion of this phased approach. Byrne says: The .NET Framework 2.0 support makes it easier to upgrade incrementally, because the interoperability with other technologies is so good. Without the .NET Framework 2.0 support, we would have been forced to migrate large chunks at a time, which we were reluctant to do. XML Support One of the key features of SQL Server 2005 is its support of XML data. Byrne explains that this lets the group seamlessly model between its exotic trades, which it wanted to treat as structured but flexible XML messages within the database, and its vanilla trades.

October 2005introduction of business-focused interfaces based on Web services between the client and middle tier November 2005the caching tier to offload expensive work from the database and further guarantee the performance of key service levels December 2005new persistence engine based on XML features of SQL Server 2005. Improved high availability based on mirroring

Owing to the high throughput and performance of the vanilla trades, we model them mostly as relational data. The exotics need a lot of flexibility so we model those as XML structures, says Byrne. The native data type helps us to treat both types of data in a uniform way. This is important. What starts off as a low-volume exotic product can become a high-volume business, if the product is successful. The native XML support within SQL Server 2005 helps to hide the differences and migrate between XML and relational representations. Visual Studio Team System Barclays Capital plans to use the new functionality of Visual Studio 2005, in particular Microsoft Visual Studio Team System, to increase collaboration within its software team. Once fully implemented, it expects to significantly accelerate development time and improve reliability, thanks to improved communication and easier knowledge sharing across its development teams. At the moment, the process of creating, tracking, and reporting different projects is all done manually, says Nash. When we start using Team System, these will all be automated. The developer will work on a project and check back code, and then each work item will be tracked through testing. Having such an integrated development process will save us time and reduce errors. IntelliSense The IntelliSense technology is not a new feature to Visual Studio 2005. However, it has been significantly upgraded. IntelliSense predicts the

variables on offer while writing code, thus helping developers save time. A new feature of IntelliSense is IntelliTasks, which lets the developer create specified code snippets for shortcuts. This is a good example of incremental improvements really adding to the overall ease of use of the package, says Nash. Mirroring The mirroring functionality within SQL Server 2005 will provide faster failover, meaning that if there is a hardware failure that affects the primary database, the secondary database will be available in just seconds.

Benefits
TAPS Offers Traders Guaranteed Predictability The TAPS system, running on SQL Server 2005, helps ensure that Barclays Capitals traders have what is effectively a real-time picture of their positions. Byrne says, The built-in reliability and latency guarantees of TAPS, based on SQL Server 2005, means Barclays Capital traders have up-todate information on which to base their decisions. Scalable Solution Meets Barclays Capitals Growth Predictions The success Barclays Capital has enjoyed in recent years has led it to agree on an aggressive growth plan to maintain and build its position as a leading global investment bank. As Nash explains, the SQL Server 2005 solution is fundamental to achieving this outcome: The TAPS solution is designed to be extensible and to easily accommodate new functionality

without disturbing existing systems, he says. The solution could incorporate commodities trading as well. Only SQL Server 2005 could provide that degree of scalability. NET Framework 2.0 Has Potential to Improve Web Services by 30 Per Cent Unlike many of its competitors, Barclays Capital uses Web services in a trading environment. Microsoft tests revealed that the .NET Framework 2.0 could help Barclays Capital improve the efficiency and performance of the raw infrastructure speed of its Web services by around 30 per cent. XML Data Type Eliminates Overnight Processing All trade data within Barclays Capital conforms to a complex XML schema. Under the old application, the system would promote particular fields out of the document and store them alongside the document so that they could be queried. The problem with this method came when a user wished to find a field that had not already been promoted out of the document. Retrieving such information demanded the group run an overnight-process to extract the data. However, thanks to the XML functionality of SQL Server 2005, the bank will now be able to rapidly retrieve any information regarding any field. Muir says: In the new system, when we get an XML document, we will shred it into a relational format and any part of the document that is not well understood will be stored as an XML fragment.

That means we dont have any duplication in the database. It also means that any fragments of the document that are not well understood can be stored as XML data types and easily searched within the database. Ultimately, this provides the trader with a more accessible library of information regarding completed transactions. Instead of the trader having to request a particular piece of information, which may not be readily available, they can now simply search the database using TAPS. This is both easier and quicker, says Muir.

For More Information

For more information about Microsoft products and services, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada Information Centre at (877) 5682495. Customers who are deaf or hard-of-hearing can reach Microsoft text telephone (TTY/TDD) services at (800) 892-5234 in the United States or (905) 568-9641 in Canada. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information using the World Wide Web, go to: www.microsoft.com For more information about Barclays Capital products and services, visit the Web site at: www.barcap.com For more information about ThoughtWorks products and services, visit the Web site at: www.thoughtworks.com

Microsoft SQL Server 2005

Microsoft SQL Server 2005 is comprehensive, integrated data management and analysis software that enables organizations to reliably manage mission- critical information and confidently run todays increasingly complex business applications. By providing high availability, security enhancements, and embedded reporting and data analysis tools, SQL Server 2005 helps companies gain greater insight from their business information and achieve faster results for a competitive advantage. And, because its part of Windows Server System, SQL Server 2005 is designed to integrate seamlessly with your other server infrastructure investments. For more information about SQL Server 2005, go to: www.microsoft.com/sqlserver

Microsoft Windows Server System

Microsoft Windows Server System is a line of integrated and manageable server software designed to reduce the complexity and cost of IT. Windows Server System enables you to spend less time and budget on managing your systems so that you can focus your resources on other priorities for you and your business. For more information about Windows Server System, go to: www.microsoft.com/windowsserversy stem

Software and Services

2005 Microsoft Corporation. All rights reserved. This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY. Microsoft, IntelliSense, Visual Studio, and Windows Server System are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries. All other trademarks are property of their respective owners. Document published November 2005

Products Microsoft SQL Server 2005 Microsoft Virtual Server 2005 Microsoft Visual Studio 2005

Technologies Microsoft .NET Framework 2.0 IntelliSense