IPC Systems loops non-traders into ‘hoot-and-holler’ conferences
As the trading sector adapts to evolving technology and regulation, so too do the firms that provide the communications products and services that enable trades.
IPC Systems exemplifies this trend. Over the past decade, the Jersey City, N.J.-based company has expanded its offerings from primarily trading turrets—specialized telephone-keypad systems—to a broad array of software, communications devices, and network services.
The evolution culminated with the 2011 launch of Unigy, which IPC calls its game-changer for trading communications.
“We’ve expanded to provide network services for voice and data connectivity,” said Michael Speranza, IPC’s senior vice president of global product management and marketing. “We are providing a platform that combines communications and application development.”
With Unigy, IPC aims to unify the vital components of the trading desk such as risk management, research, and trading itself, which historically existed in silos. “The most important thing about Unigy is that it’s not just about trading turrets, it’s about creating collaboration between traders and non-traders, such as portfolio managers, economists, risk and compliance managers, all of whom need to be in the loop,” said Jonathan Morton, IPC’s vice president of product marketing.
Founded in 1973, IPC’s client base is primarily in the banking and securities sectors. The privately owned company has more than 900 employees in 35 locations; a little more than half of its business is in the U.S., while 30% is in Europe and a shade under 20% in Asia. Total annual revenue is about $500 million.
IPC has more than 153,000 turret/dealerboard systems operating on 2,400 trading desks or floors worldwide. The ubiquitous contraptions enable users to visualize and prioritize incoming call activity from customers or counterparties and make calls to these same people instantaneously by pushing a single button.
In addition, traders may have dozens or hundreds of dedicated ‘hoot-and-holler’, or squawk-box, circuits which allow immediate mass dissemination or exchange of information to other traders within their organization as well as to customers and counterparties.
IPC has rolled out a line of communications devices under the Unigy umbrella branded Pulse, which enables non-traders to participate in hoot-and-holler conferences via PCs, mobile devices, or a specialized desktop device.
“The Pulse family is positioned as instant trading collaboration,” Speranza said.”We now have a complete product family that caters to every individual that touches workflow.”
As processing power has increased and switching technologies have matured, voice-trading systems are evolving to Internet Protocol server-based architectures.
IP technologies have transformed trading communications by enabling converged, multimedia communications that includes, in addition to traditional voice calls, presence-based communications such as messaging, instant messaging, chat and audio/video conferencing.
Pulse Enterprise, the first offering under the Pulse brand, is a voice-over-IP set of communication and collaboration services intended to link silos that characterize trading firms, so that trading, risk management, and operations teams are all on the same page.
“As complex, cross-asset trades become more common, and as transparency requirements drive involvement of compliance in the trading process, the need for improved collaboration tools and more seamless communication across the trade lifecycle becomes critical,” Speranza said.
With Pulse Enterprise, “we are proposing to break down the silos by providing a single vendor for management and control of all communications needs that emanate from the trading floor, internal users and counterparties,” he said.
Unigy Pulse is a specialized, feature-laden device with a small form factor that can replace bulky desktop intercom equipment.
“Unigy Pulse is designed to give middle- and back-office staff connectivity to the trading floor so research, trade support, compliance and clearance can get deals done faster,” said Morton. “At the same time, traders can consolidate their desktops by getting rid of obsolete equipment.”
PAGING GORDON GEKKO
Today’s sleek trading-communication hardware is a far cry from the clunky trading turrets that populated desktops as portrayed in movies such as 1987’s Wall Street.
“Back then, there were old analog speaker cubes and four-channel ‘hoot’ boxes, which were cumbersome,” Morton said. “They were ‘hoot-only’ and didn’t support intercom. With the launch of Unigy we have expanded our universe to include non-traders, who require technology to communicate with traders or among themselves.”
Unigy Pulse Enterprise delivers hoot and intercom communications via the PC.
“With Pulse Enterprise, you install, manage and maintain hoots and intercom communications from the same platform that manages your trading turrets,” said Morton. “This is a radical departure from anything we’ve done in the past, in that it goes beyond just turrets to include any type of device.”
Compatible devices span all popular hand-held brands, including iPhone and BlackBerry, and Unigy Pulse Mobile has put hoot, intercom, TV audio and speaker channels on Apple’s iPad as well. “Adding Unigy Pulse Mobile to our hoot and intercom offerings means firms can collaborate across the entire trading workflow, regardless of whether people are at their normal workspace or at a remote location,” said Speranza.
Packing large-scale business communications onto the small real estate afforded by mobile devices is a major technical challenge.
“Mobile devices are limited in the scope of the data that they can hold and/or process effectively,” said William Haynes, CEO and founder of Sabai Technology, which develops specialized wireless routers.
“Working on a spreadsheet on your mobile phone can be a lesson in futility. The big question is how do you get access to all your data at any time, from any place, from any device.”
The iPad app “didn’t exist when we launched Unigy,” said Morton. “We turned to a third-party developer to create the iPad app, which will be available with the next release of Unigy in 2013. At that point, Pulse will support three different forms of device: mobile, PCs, and the specialized Pulse device.”
IPC is seeking to leverage Unigy to gain separation from competing turret manufacturers such as Orange Trading Solutions, BT ITS/Netrix, Mitel/Wesley Clover Solutions, and Speakerbus. Along with Unigy, the other major innovation being pursued by IPC is network services, where it’s positioning itself as a provider of high-speed connectivity and an extranet for capital markets.
The extranet, called Connexus, stretches 110,000 route miles and covers more than 4,000 financial-market participants. The product functions as a financial ecosystem of sorts, in which liquidity venues, buy-side and sell-side firms, inter-dealer brokers, market-data providers, software vendors and clearing firms can interact.
Connexus differentiates itself from financial extranets provided by data center and networking providers by exclusively focusing on capital markets, according to IPC. “We serve no other vertical except financial, which makes a substantive difference for clients,” said Morton. “We are making significant investments in cloud technology, so that clients can connect to any provider on the network.”
New regulations, such as the Dodd-Frank Act in the U.S. and European Market Infrastructure Regulation, are spiking demand for connectivity by mandating that over-the-counter swaps be traded on exchanges or swap execution facilities. The move away from privately negotiated transaction stands to benefit IPC and other trading communica-tion partners “From a networking point of view, SEFs create a beehive of connectivity in that all participants will be required to connect to all SEFs,” Morton said. “Inter-dealer brokers, who form a very important segment of IPC’s customer base, will be the beneficiaries of this connectivity.”
For IPC, revenue from network services is roughly equal to revenue from trading communications, which represents a singular transformation for the company. “Until 2003, we were viewed primarily as a trading systems and turret company,” said Speranza. “Since then, we’ve completed a significant evolution.”
After Connexus, IPC’s major network product is Direct Connect, which offers high-speed connectivity ranging from under one Megabit per second to 10 Gigabits per second.
Direct Connect offers low-latency connections between key market centers including New York, Chicago, London, Frankfurt, Hong Kong and Tokyo, managed through infrastructure in New York, London and Singapore.
“Our clients needed an alternative to their current network service provider, one that could provide a higher level of service,” said Morton, explaining the rationale behind Direct Connect.
On IPC’s drawing board is Trader Cockpit, a “concept application that provides a vision of a next-generation Trade Desktop and potential direction for IPC,” said Morton. “It’s similar to a ‘concept’ car that captures a vision and influences, but does not dictate long-term feature designs.”
Fundamental elements of the Trader Cockpit will center on convergence of multimedia communications, productivity apps, and market data. On one screen, traders will be able to view market data, news feeds, trading apps, social media and real-time speech analytics.
The idea, said Morton, “is to create an actionable workspace that adapts in real-time to market changes, extend the value of existing applications, and provide new tools to extract business value from data.”
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