Bovespa Migrates from Mainframe to an HP-Intel-Microsoft Platform to Gain Agility, Reduce Costs, and Ensure Market Evolution
Ready for the Future
Bovespa migrates from mainframe to an HP-Intel-Microsoft Platform to gain agility, reduce costs, and ensure market evolution.
Solution Summary
The Brazilian São Paulo Stock Exchange (Bovespa) is a non-profit institution owned by brokerage firms. Since March 2000, it is the only place for trading securities issued by publicly-owned companies in Brazil.
Scenario
The successful implementation of the Brazilian Payment System (SPB) on an HPIntel-Microsoft Platform in April 2002 helped Bovespa make the decision to migrate all of its business applications - previously running on mainframes - to a new IT environment.
Solution
- Four HP servers - two RX8620 (with six Intel® Itanium® 2 processors each) and two RX2620 (with one Intel® Itanium® 2 processor each) - and one 7.7-terabyte XP512 storage.
- Microsoft Windows Server 2000 and 2003 operating systems and Microsoft SQL Server 2000 database.
Benefits
- Superior performance stability and fewer problems
- Cost reduction, enhanced ROI, and better agility
- More secure and reliable environment for stock brokers
- Higher platform availability and scalability that allows Bovespa to scale out and scale up.
Technology: Software
- Microsoft Windows Server 2000 and 2003
- Microsoft SQL Server 2000
Technology: Hardware
- HP Integrity RX 8620 servers with six Intel® Itanium® 2 processors each
- HP Integrity RX 2620 servers with one Intel® Itanium® 2 processor each
- 7.7-terabyte XP512 storage
Introduction
The successful implementation of the Brazilian Payment System (SPB) on an HP-Intel-Microsoft Platform in April 2002 helped Bovespa make the decision to migrate all of its business applications - previously running on mainframes - to a new IT environment. Today, since a good deal of its systems is based on the HP-Intel-Microsoft Platform, Bovespa has much more peace of mind to follow the growth of the Brazilian investor market. In addition to gaining agility and flexibility to develop new products and services, Bovespa's IT staff already notices a maintenance cost reduction and higher stability of mission-critical applications on the new Platform. Benefits are expected to increase even further after full mainframe shutdown, which is expected in 2006.
Scenario
Founded on August 23, 1890, the São Paulo Stock Exchange (Bovespa) is a non-profit institution owned by brokerage firms. Through an integration agreement entered into with other eight Brazilian stock exchanges in March 2000, Bovespa is now the only place for trading securities issued by publicly-owned companies in Brazil. At Bovespa, several securities - such as stock, debentures, and investment fund quotas - are traded, as well as other papers issued by Brazil-based companies.
In response to the Brazilian market need to establish a modern structure for clearing and depository operations, Bovespa founded the Brazilian Clearing and Depository Corporation (CBLC) in 1997. CBLC is currently responsible for clearing operations of the entire Brazilian stock market. It is also the only central stock depository institution in Brazil.
Not long ago, both Bovespa's and CBLC's IT infrastructures were almost exclusively based on a mainframe platform. "Just like other financial market institutions, Bovespa had always been a heavy mainframe user, much of it because there were no choices in the early 70's, when it began to use this hardware," says Luiz Gonzaga de Oliveira Simões, CIO, Bovespa.
The first contact with the HP-Intel-Microsoft Platform was in the 90's due to the proliferation of the Internet. "We started to
use some applications on this platform, but still did not consider migrating mission-critical systems. This was only discussed after the Brazilian Central Bank launched the Brazilian Payment System (SPB) in 2000," says Gonzaga.
With the SPB, the need to develop a series of new systems in a short time frame emerged. To meet the goal of implementing the SPB determined by the Central Bank - which at first was six months, but was extended to two years - Bovespa's IT staff decided to develop the new applications on the HP-Intel-Microsoft Platform. "Development was faster and cheaper than on the mainframe, and this would be a great opportunity for our IT professionals to evolve their knowledge on the new platform," says Joel Ribeiro, System Development Manager, Bovespa.
Another advantage was the availability of a skilled labor force. "By choosing the HP-Intel-Microsoft Platform as the foundation to develop new applications, we had the chance to work with several partner companies," says Carlos Umberto de Faria, Production and Quality Planning Manager.
Bovespa's forecasts for the technology area turned out to be true: the project was successful, and the SPB was implemented
in April 2002. "Since we chose Microsoft technologies, we were supported by Microsoft Services for the two years of the project's
lifecycle. Consultants helped us define from application architecture and development standards to the whole infrastructure and
database design," says Gonzaga. At the time, about 80 internal staff members and other 100 external professionals from partner companies were engaged in the project.
Even though the SPB systems had been designed on the HP-Intel-Microsoft Platform, they needed to interact with the mainframe, which contained much of the legacy information that existed when the project began. Communication between these two platforms occurred in various ways by use of technologies such as DB2 Connect, which enabled access to DB2 database. However, this kind of communication caused some compatibility and performance stability problems. "This process of coexistence of two platforms tended to get worse. From a technical standpoint, this was one of the reasons why we started to migrate all applications to one single environment," says Ribeiro.
Solution
Bovespa decided to adopt one single IT environment so it needed to choose the right platform to support its business applications. One issue taken into account was the mainframe's maintenance cost compared to the HP-Intel-Microsoft Platform's cost. "The mainframe cost is higher, both in terms of hardware and software. In addition, there is vendor lock-in," says Gonzaga. "With mainframe, productivity tools are much less efficient, which makes developing new systems more difficult. With the new platform, this is easier," says Faria.
By choosing mainframe shutdown, the IT staff started in-house efforts to analyze how to make changes without affecting Bovespa, CBLC and the financial market as a whole. "We analysed upsides and downsides, assessed risks, defined how much we would invest in the new platform and what was our migration goal. Based on this information, Bovespa's executive officers approved the mainframe shutdown," says Gonzaga.
According to him, one major argument to convince Bovespa's top executives was a return on investment (ROI) study. "Especially for large-scale projects like this, it is important to calculate how much you will spend on the mainframe, how much you will spend on the migration process, and how long it will take the company to get the ROI back."
Upon authorization, the project started in 2003. Choosing which technologies would be used for the new platform was not difficult. Since Bovespa already used HP-Intel-Microsoft technologies and was satisfied with the environment developed for the SPB, it chose the same approach for the new platform. "We firmly believe on HP-Intel-Microsoft robustness. This is key in the process to choose technologies that will support business-critical applications since we cannot bet on a solution that we are not sure is future-proof," says Gonzaga. The process to migrate applications from the mainframe to the HP-Intel-Microsoft Platform involved Microsoft Windows Server 2000 and 2003 operating systems and Microsoft SQL Server 2000 database. Recently,
Bovespa also began a process to migrate to SQL Server 2005. Major business applications were designed on Visual Basic 6.0 through a three-layer development, but Bovespa also uses .NET technology to build new products and services.
By deciding to adopt the HP-Intel-Microsoft Platform, Bovespa's IT staff was visionary, has restructured its operations and now takes advantage of the benefits allowed by its pioneering migration.
HP is Bovespa's technological and strategic partner and as such is the preferred solution provider. The project involved 35 servers for the production environment and 40 servers for the development testing environment (HP Proliant and Integrity servers). Of this total, the mainframe migration project required only four HP servers - two Integrity RX8620 (with six Intel® Itanium® 2 processors each) and two Integrity RX2620 (with one Intel® Itanium® 2 processor each) - and one 7.7-terabyte XP512 storage. "In this migration, HP was able to protect Bovespa's existing investments, and at the same time proved there is a much higher performing platform called HP Integrity Servers that is capable of providing higher scalability and flexibility for business support," says Marcelo Baptista, HP Manager in charge of the Bovespa account. The HP Integrity family is based on Intel® Itanium® 2 processors.
"The Intel® Itanium® 2 architecture allows 128 processors in one single server. This is why today an Itanium® processor-based server has better performance and scalability than a mainframe," says Edison Rodrigues, Solution Specialist, Intel. In January 2006, a consortium formed by Intel technology partners - led by HP - announced investments of approximately 10 billion dollars in the next five years to develop products based on the Itanium® processor. In addition, in the next three years
HP is committed to invest 3 billion dollars in research and development for its Integrity server line.
Bovespa not only purchased HP Integrity servers, but also contracted HP's mission-critical system support service. The HP critical Services ensure availability of systems running businesscritical applications. HP Critical Services is to evaluate continuously all the conditions affecting system availability - physical environment, networking, applications, processes, hardware and operating system - and as a result bring enhancements to service levels, increase operating efficiency, and reduce or eliminate downtime. About 10 professionals from the company - among executives, consultants, and technicians - were engaged in the project. "The solutions adopted by Bovespa are based on the HP Adaptive Enterprise concept and technology, which provide a significant competitive edge by creating an IT environment that is more agile and supporting
business initiatives at the speed customers need, with higher performance, lower risk, and maximum ROI," says Maurizio Niccolai, Financial Service Industry Manager, HP Brazil.
The application migration was divided in two major steps. First, the whole online portion was migrated and then the batch portion was migrated. "We began to implement some systems in 2004, but most of them were migrated in 2005," says Ribeiro. According to him, Bovespa's goal is to complete the whole migration process for the online portion, which will take less time, and complete the batch portion still in 2006 - and finally shut the mainframe down.
The project also involved 350 official Microsoft training sessions (Microsoft Official Curriculum) for the development area alone. "There was a huge need for technology staff training, as part of the business knowledge was held by the older staff that used mainframe," says Deodoro José de Arruda Bruzadin, Technical Manager, Bovespa. From the end user's perspective, that is, the brokers, there were no dramatic changes. "Brokers had been using PCs and mouse for quite some time. The major impact was on the interface, which became more graphical and user-friendly," says Bruzadin.
The Benefits
By deciding to adopt the HP-Intel-Microsoft Platform, Bovespa's IT staff was visionary, has restructured its operations and now
takes advantage of the benefits allowed by its pioneering migration. "Bovespa showed strategic business insight when it decided to change its technology platform some years ago. Today, Bovespa has the benefits of cost reduction, ROI, and agility
without compromising high availability in mission-critical environments," says Eduardo Longano, Corporate Solutions Manager,
Microsoft.
Actually, the platform change is already beginning to have positive impacts on Bovespa. As we migrate an entire mainframe
system to the HP-Intel-Microsoft Platform, we have noticed higher performance stability and fewer problems compared to the previous scenario," says Gonzaga. "In terms of transaction volume, if you compare us with large banks, Bovespa is small, but
the criticality of its services is very high - which proves that our new platform based on Microsoft products is already mature to
support mission-critical applications," says Gonzaga.
Cost reduction is undoubtedly one of the greatest benefits of the mainframe shutdown project. "Bovespa does not rely on a single vendor, has a broader range of specialized professionals on the market, and will have a reduced total cost of ownership
(TCO) because the adopted solution TCO is much lower than the mainframe's," says Rodrigues, Solutions Specialist, Intel. Thanks to the Intel platform's robustness, Bovespa relies on an extremely stable and secure environment, which is critical to
provide brokers with reliability to perform transactions. Since it is a standards-based platform, there is great flexibility to adapt
to an increase in transaction volume without any need for huge investments.
Unlike what one could imagine, the mainframe shutdown did not cause employee layoffs. "This was one highlight of Bovespa's strategy because from the beginning it intended to relocate its old platform staff," says Carlos Faria. According to Carlos Faria, all the IT staff was included in the new process, from testing to development and production.
In parallel with the migration process, Bovespa decided to change its working patterns by adopting a new methodology for system development based on documentation processes. "Since systems running on the mainframe were very old and documentation was lost, we became more and more dependent on people who knew the platform. Today, this is not the case
anymore because it is all documented," says Gonzaga. Currently, all code lines developed at Bovespa - 4.5 million on the new platform - undergo a formal review process to find out if they meet predefined standards.
Since Bovespa and the financial market cannot stop, all of its systems rely on a contingency process with hardware, processes, and people on an alternative site and with real-time data replication, which ensures service availability. The migration of applications to the HP-Intel-Microsoft Platform also makes Bovespa more comfortable to adapt to a new market scenario. "In the last few years, we grew virtually 50 percent a year, and as the Brazilian interest rate gets reduced, we expect the amount of investments and business made by Bovespa's customers to be higher and higher," says Gonzaga. "In this aspect, a platform allowing Bovespa to scale out and scale up in a fast and flexible way will help keep up with market evolution."
