CSI's Openmarketdata.org, Hedgehogs.net Signal New Wave of Collaboration

Collaborative Software Initiative’s recent soft launch of Openmarketdata.org and the growing ambitions – and credibility – of ventures like Hedgehogs.net may be signalling that collaboration for financial markets applications and infrastructure is an idea whose time has finally come. While individual open-source providers – notably Marketcetera with its order management platform – have made inroads into specific areas of the business, CSI and Hedgehogs.net are taking the argument to the enterprise level, and may succeed in attracting high-level attention as a result.

CSI made its debut at last month’s Sifma event in New York, with CEO Stuart Cohen and financial markets director Emilio Mercado doing the rounds at the show. At the event, CSI introduced Openmarketdata.org, which will act as a kind of umbrella framework for sharing components developed by market practitioners in support of trading infrastructures.

Openmarketdata.org is kicking off with a suite of three feedhandlers – acquired by CSI from high-speed messaging specialist Tervela – covering the US equities markets, including the Nasdaq Itch feed. More strategically, however, Openmarketdata.org will be home to CSI’s Market Data Abstraction Layer (MDAL), the specification for which was released to coincide with the Sifma event.

CSI hopes the marketplace will embrace MDAL – a kind of middleware for interconnection of a variety of market data platforms – as a framework for pulling together best-of-breed applications for the trading infrastructure. With practitioners contributing specific components, the hope is that MDAL will provide the gel that allows trading technologists to construct their own best-of-breed application sets, breaking the vendor lock-in that has dominated the trading room for the past 20 years. CSI’s Cohen sees MDAL as a cost-effective migration path away from the high-cost legacy platforms that continue to populate many of the world’s trading operations.

According to Mercado, CSI will be targeting the market data and trading infrastructure community with Openmarketdata.org. He says that while the dot.com bust forced a review of money spent, the most recent market downturn has raised the profile of the trading infrastructure budget to the enterprise level, where the potential for savings represented by open-source is getting the attention it deserves.

With Openmarketdata.org out in the marketplace, CSI is planning its first major product release in the first quarter of 2011, followed by a second release in the third quarter. In each case, CSI will offer software and documentation free of charge, with revenues anticipated from standard open-source services, such as professional services and custom development.

As it rolls out capabilities via Openmarketdata.org, CSI will offer commentary from Mercado and head of development Ross Cooperman; it’s hoped that market practitioners will respond and offer their analysis and suggestions for the software available through the site. The idea is to engage with the internal development shops of trading operations in order to leverage their expertise and pass along improved capabilities and cost reductions.

London-based Hedgehogs.net, meanwhile, has been around for longer. Often misconstrued as a kind of social networking site for hedge funds, the site is in fact a repository for trading and other applications available to qualified participants. In its own words, Hedgehogs.net says it “provides a online collaboration framework for the investment community, including a ‘social marketplace’ where participants can use, build, commission and trade content, analytics and applications built for market participants by market participants.”

The initiative – backed by Thematic Capital, an investment partnership seeking to “bridge the gap between financial markets, social media technologies and trading infrastructure” – is headed by CEO Ken Yeadon, a veteran of the electronic trading segment.

According to Yeadon, Hedgehogs.net is already being used by developers to share trading applications and seek feedback on performance of models. The Hedgehogs.net platform – underpinned Elgg, an open-source social engine technology – allows a developer to post his or her implementation of a trading model for broad use by qualified users.

The company this spring launched a new content licensing capability that gives contributors full control of any content they post to the site. The move was aimed at protecting contributors’ intellectual property rights by establishing a customisable license administration model that ensures publishing entities control access and onward distribution of their content.

This allows them to monetise their content, according to their own chosen business models, says Yeadon. Hedgehogs.net, meanwhile, acts as facilitator for distribution of participants’ content, charging a service fee much like a credit card processor.

The company last month added Kaazing’s HTML5 WebSocket Gateway facility, allowing support for real-time streaming market data and transactional capability, opening up another segment of financial IT to its marketplace.

Hedgehogs.net is pitching the capability as a hosted open market for both contributors and subscribers, laying claim to a Software-as-a-Service (SaaS) solution for market data and trading. The Kaazing WebSocket Gateway’s patent-pending WebSocket Acceleration technology supports full-duplex bi-directional web communication, allowing practitioners to extend any TCP-based messaging protocol to the Web without additional hardware investment.

Hedgehogs.net’s financial backer, Thematic Capital, is continuing to broaden its reach. The company earlier this year acquired a majority stake in MoneyScience, a finance portal, for an undisclosed sum. MoneyScience is a publisher serving the quantitative finance community. Under the deal, the portal will leverage the technology underlying the Hedgehogs.net platform, to boost the collaborative aspects of the site, which receives some 40,000 visits per month.