IBM Japan Signs Agreement With Microcomp To Distribute DR-One Trading Room System

With the help of IBM, a little-known Australian software firm is preparing to challenge systems integrators Rich, Micrognosis and Data Logic Ltd. in the trading room business.

It's no secret that Rich and company are struggling to transform themselves from suppliers of turnkey trading room systems to providers of software products. But B.S. Microcomp Software Pty. Ltd. of Sydney claims to already have what's on the drawing board in the U.S. and the U.K.

If IBM has its way, Microcomp's DR-one suite of integrated software components will be appearing in banks and brokerage firms in Japan and North America in the near future. DR-one software modules run on IBM AT- or PS/2-compatible PCs connected by an Ethernet or Token Ring Local Area Network.

IBM Japan Ltd. has obtained marketing rights to DR-one (Dealing Room-Online Network Environment) in Japan and is developing a Kanji- based version of the system. A server is being developed to handle a digital price feed from the Tokyo Stock Exchange.

Microcomp has also signed a third-party customer support agreement with Kanebo Ltd., which has the rights to sell DR-one optional features in Japan.

Despite the widespread belief that Japanese banks, brokerages and exchanges will buy hardware only from Japanese vendors such as Hitachi and Fujitsu, IBM Japan has been making inroads into Japanese trading rooms. It supplied 800 PS 55 microcomputers and several 3090 mainframes for the mammoth trading room Sanyo Securities recently opened in Tokyo.

Japan and other Asian markets are receiving top priority at Microcomp, says Tim Hart, managing director. "The Japanese banks and securities firms are going for world domination," he says. "With their capital base, they can afford to put in very technologically advanced systems. As an Australian company, going after the Japanese market first is a natural."

Microcomp plans to distribute DR-one in North America but has not yet finalized arrangements, Hart says. IBM has been demonstrating the system in New York for the last few weeks, he says. All of DR-one's existing users are in Australia, but Microcomp recently responded to RFPs in North America.

DR-one was developed by Microcomp's financial products division for the Australian stockbroking firm Ord Minnett. All development was funded by Microcomp with the intent of producing a trading room system that could be sold internationally.

Founded in 1979, Microcomp is also the parent company of PC Dealer, one of Australia's leading vendors of PCs and services. Microcomp's revenues have grown at a compounded rate of more than 100% annually since 1979 and reached $80 million (Australian) in 1987.

Traders in Ord Minnett's equities area use DR-one to access the Reuters RDCDF page-based digital feed as well as information from the Australian Stock Exchange and Bridge Data. DR-one is connected to Ord Minnett's Mocom back-office accounting system and a variety of PC decision-support applications.

DR-one's environment manager allows Ord Minnett to monitor which services a trader uses and how often. This feature helps management more accurately determine how many market data subscriptions are needed.

During a recent visit to New York, Hart told TST that DR-one distinguishes itself from other trading room systems in several ways. DR-one can display video and digital services in different windows of the same screen. Most hybrid video/digital systems display video and digital services on different screens.

"We take the video output and turn it into standard PC VGA output and superimpose it on a digital screen," Hart says. "We've essentially digitized the video at the PC. The next step is to digitize it in the back room so what you're producing is a digital image of a video screen. Once you've done that, you can switch it using fairly standard PC technology."

Hart says an evolution is occurring in trading room systems similar to one that took place in office automation. "Ten years ago, when you went out to buy a word processor you got a box with some funny stuff on the screen," he says. "Today, you buy an off-the-shelf software package such as Word that you plug into an IBM PC-compatible. The same thing is happening in trading rooms."

Release 1.2 of DR-one, which was introduced last month, looks like any other set of PC-based products, Hart says. "Each module -- whether it's the Reuters digital page server, the applications server or the real-time spreadsheet -- includes a diskette and a manual that comes in a box," he says. "You load up all the software and configure it yourself. We demystify the dealing room."

The basic DR-one system consists of six software products -- dealer workstation, digital data server, blackboard server, network gateway, environment manager and applications interface library. All modules run on an 80286 or 80386 processor with monochrome or color monitors.

The dealer workstation screen can be divided into four or five windows, each displaying dynamic updates from market data services or internal applications. An adaptor allows multiple color monitors to be used with the dealer workstation.

All monitors can be controlled from a single universal keyboard with keys that can be programmed to meet each dealer's requirements. A touchpad allowing different services to be called up with one touch can be plugged into the standard IBM keyboard.

Digital data servers allow dealer workstations to access digital data feeds from Reuters, Telerate and other information providers. An optional video source server handles video-based services such as Reuter Monitor Dealing.

Dealers with access to the blackboard server can open a window onto a specified in-house page displaying real-time information such as rates, positions or market alerts. When a page is refreshed on the blackboard server, updates are immediately sent to all dealer workstations displaying that page.

Network gateways provide access to external computers and services and support communications protocols such as asynchronous, X.25 and SNA.

The environment manager controls the dealer's mix of services, menu choices and support facilities. The module also monitors the network and generates usage reports. The times and dates of page requests are maintained on a central file.

Applications interfaces are used to extract and manipulate data from external services or local PC applications. A spreadsheet receiving market data and calculating cross-rates can be be viewed simultaneously on all dealer workstations alongside information services such as Reuters or Telerate.

DR-one is "much more of a platform product" than the RDXII system that IBM has licensed from the International (London) Stock Exchange (TST, Dec. 5, 1988), Hart says. "Our interface language allows you to read data from any feed you like," he says. "We also have the ability to take Telerate or Reuters data into a real-time spreadsheet."

Hart says that Microcomp is the first trading room systems supplier he knows of that has taken a packaged approach, but says that others are not far behind. However, he is not worried about competition from the systems integrators.

"The systems integrators emerged during the transition from video terminals to digital services," Hart says. "By introducing the video switch, they helped eliminate the clutter of terminals. But providing turnkey systems requires a different mindset than developing products for a standard architecture. Those people are going to be blown away over time."