There are three major trends affecting the wide area networks of financial firms:

1. Rapidly growing data
2. Software evolution toward distributed computing
3. Increasing virtualization of IT assets

Database Mirroring

The total amount of stored data for financial firms is doubling every 18-24 months. Sarbanes-Oxley requires data to be stored for at least seven years. The SEC mandates that customer account records be preserved by exchange members, brokers and dealers for six years following the closure of an account. And, next-generation data mining applications necessitate firms having access to larger databases. Fortunately, the cost per megabyte (MB) of stored data is declining rapidly so total storage budgets have not needed to match the rapid growth of databases. However, as databases become larger and more closely aligned with financial firms' key business processes, they need to be protected with database mirroring technologies such as EMC's SRDF, IBM's Metro Mirror, HDS' True Copy, MiraLink's Data Mirroring Engine and HP's Continuous Access software. Database mirroring between the major sites of a financial firm places tremendous amounts of time-sensitive traffic onto their wide area network.

Service Oriented Architecture

Long foretold, the advent of distributed computing is finally upon the financial industry. A number of distributed computing standards have been agreed upon under the Service Oriented Architecture (SOA). With their promise of lower development costs, closer alignment with business processes, and faster application deployments, many next generation financial business applications will be SOA-based.

Forrester Research recently asked 252 decision-makers at North American and European enterprises how they are currently using SOA. Over one-third responded they use SOA strategically, with larger firms having greater adoption rates. These findings support a February 2006 Aberdeen survey in which 25% of survey respondents stated they are currently deploying SOA-based applications. Respondents also indicated to Aberdeen that over 50% of their total deployed software will be SOA-based within five years.

The effects of SOA-based distributed computing on WANs are profound: exponential increases in inter-site traffic; more sensitivity to network latency; and, less predictable traffic patterns.

Virtual Compute and Storage Pools

The economies for virtualizing the storage and server assets of financial firms are greater than for any other industry. Financial firms invest heavily in IT. However to operate virtual pools of compute and storage assets, they must intercommunicate frequently. For many financial firms, server and storage assets are spread across several physical locations. Interconnecting their geographically distributed assets to create virtual pools can place significant demands on their WAN.

WAN Solutions

Some financial firms employ IP-routed WANs such as virtual local area networks (VLANs) and virtual private networks (VPNs). While IP is an ideal protocol for low traffic volumes and non-time-sensitive applications (such as email and file sharing), it is challenged when facing high volume, time-sensitive traffic (such as needed for database mirroring, SOA traffic and virtual compute & storage pools). When traffic reaches 60-75% or more of a circuit's capacity, IP-routed WANs drop packets and trigger TCP re-transmissions which exacerbate circuit congestion.

Many financial firms have learned to distinguish between access protocols and transport protocols. They use IP as the user-to-network interface (UNI) access protocol to the WAN. And they employ more efficient Synchronous Optical Network (SONET) or wave division multiplexing (WDM) between their WAN transport elements. In so doing, they maximize transport efficiency (i.e., near-zero packet loss at almost 100% circuit utilizations).

Moving to optical WAN transport infrastructure, financial firms can support the exponential growth in time-sensitive traffic that rapidly growing databases, next-generation SOA-based applications and increased IT asset virtualizations will demand.

Michael Mullaley is Director of Enterprise Networks at Ciena Corp., 978-489-2039; email: mmullale@ciena.com; web: www.ciena.com.