A while back, I blogged that I am not that sure that LSE is ditching its Windows-based Trading Platform (TechElect). It appears that LSE is indeed ditching Microsoft .NET in favour of a Linux/Solaris combination. It comes in the form of LSE buying a Sri Lankan company that makes trading platform.
What also really spook me is how incompetent the original LSE IT team was: Its original plan was to “outsource everything it could” which lead it to the ultimate, and I will say, potentially disastrous, end, it outsourced its core competency, i.e., trading shares. LSE is not Kuala Lumpur Stock Exchange (KLSE), who is so small that it makes more sense to outsource the trading platform and to concentrate on being the place to trade stocks and ensuring listing rules are followed. LSE is the big boy in the league, and need to control the trading platform more closely. Luckily for the LSE realized the mistake and is taking its core competency back in house. In fact, the PR side of LSE claims that it did not ditched Microsoft because Microsoft’s TechElect is no good, but because it wants more control, less cost and the ability to innovate.
What does ability to innovate, control the trading and less cost means to LSE? It is its core competency.
As for LSE’s TechElect experience is positive, really? 2.6 miliseconds for trading on TechElect compared to 0.4 miliseconds on the new platform? Even after accounting for advances in technology, the difference is enormous. For KLSE, nobody cares about the difference, but for big stock exchanges like LSE where computers rein supreme, that is the death nail for TechElect.
If I were Microsoft, the biggest upset I have over losing LSE is the fact that I cannot provide the flexibility and control LSE wants.
Can the new trading platform live up to expectation? I cannot wait to find out.