Thin-Client Benefits Back in Spotlight Among Street Firms

Wall Street firms were Web-enabling applications for several years before the events of Sept. 11, starting with retail trading, banking and analytics. Some firms, including Fidelity and Merrill Lynch, have also made strides in converting their back-office applications to use with Web browsers. But after Sept. 11, as Wall Street began focusing on the geographic diversity, security and cost of networks, thin client architecture started getting more attention.

If an application is distributed over the Internet through a Web browser interface, there is no need to reinstall it on each new desktop-and no need for desktops to be physically connected to a mainframe. That means that geographical diversity can be more easily achieved both on the user side, and on the mainframe, or server, side.

As a result, such an application is more resilient in the face of disasters, said TowerGroup analyst Rob Hegarty. “Sept. 11 is going to force Wall Street firms to re-examine their architectures.” The question when building networks now will be: “Do we achieve geographic diversity with this architecture? I think there will not be many projects that get done without those questions being asked.”

With a browser-based interface, there’s no application to download to a desktop. Instead, the application and its data live on a central server or mainframe, with a backup or two at other locations. IT departments can upgrade an application-or install new applications-without sending staffers to every single desktop. And desktops themselves can be lightweight models, only powerful enough to run a browser. These desktops are also much less susceptible to viruses.

At J.P. Morgan Chase & Co., Internet portals are used to present both internal and external applications over the Internet, said Michael Mazza, manager of LabMorgan’s eArchitecture unit.

In addition, other applications could be Web-enabled through a new kind of development tool: Web services. Web services are applications that call other applications over the Internet, and are likely to play a major role in software architecture in the future.

“There are a number of efforts under way throughout the firm on how to create libraries and registrations of these Web services,” said Mazza. “Say, a fixed-income research application can be used as a Web service for CEO portals, for treasury portals. It’s absolutely critical for the way we’re going to push things forward.”

Web-based applications are also critical where either space or mobility are important. PDAs and cell phones can often run Java-based thin clients or Web browsers-but not full applications. And machines that are only running browsers need less processing power-and thus use less energy, heat up less, and take up less space.

For example, three American stock exchanges are using network computers from Mountain View, Calif.’s Network Computing Devices for their overhead display screens, the company said. In addition, stockbrokers on the trading floors also use NCD’s network computers when they close their deals. NCD declined to identify their stock exchange customers.

American Century Investments is also using Internet-based applications for some back-office applications, though they are already widespread on the front-office side, according to Richard Wilkie, vice president of IT investment management services.

“We have really taken advantage of Web-based technology where it makes sense,” he said. “We continually look for low total cost of ownership. And one of the other benefits we’ve had is giving people access to our information anytime from anywhere.”

However, currently there’s not a strong business need to Web-enable all business applications, such as back-office processing software, he said. Both front-office and back-office applications have multiple communications links, which provide some resiliency in case of disaster, he said. “Recent security threats, while we take them seriously, have not altered our strategy.”

There are two major ways to Web-enable applications. The first, and quickest, is to attach a browser front end to an existing legacy mainframe application. The second is to engineer applications in such a way that they work over the Internet. “I think people are going to take multiple approaches,” said International Data Corp. analyst Dan Kusnetzky. “First, they’ll take applications that work now and enable them to work over the Internet.

Then, they’ll evolve toward writing new applications.” One of the vendors that helps Wall Street firms create Web-ready applications is BEA Systems, which counts both J.P. Morgan Chase and Merrill Lynch among its Wall Street customers.

“Many companies have recognized the need to have geographically distributed applications,” said John Kiger, who said he has seen increased interest after Sept. 11.

“There are companies that lost their infrastructure and will be rebuilding and will have the opportunity to rearchitect,” he said. Other companies, he added, will be doing risk assessments of their existing applications and finding out whether they are geographically diverse enough.

“Very few applications are built now with client/server or display screen terminal architecture,” he said. Instead, he said, companies are building Web-ready applications from the start. “It’s become a de facto standard. It’s the first choice today.”

Other vendors that put Web front ends on legacy applications include Tarantella, based in Santa Cruz, Calif., and Orlando, Fla.-based Citrix Systems.

BEA is best known for its Web Logic, which can be used for both existing applications and for building Web-enabled applications from scratch. IBM, SunGard, HP and Oracle are among the major players developing middleware and Web-centric software.