Tradefair makes safe bet selecting ControlCircle as its datacentre services partner for new financial exchange

o New derivatives exchange designed to ultimately support up to 100,000 transactions per second on each instrument[1]
o Tradefair takes vast experience gained in extreme transaction processing from the Betfair sports betting exchange and applies it to investment speculation
o Datacentre design minimises latency crucial to Tradefair's operation

November 5, 2008 - ControlCircle, the data centre services company, today announced that it has been selected by Tradefair, the new financial investment exchange launched by the Betfair Group, to provide comprehensive datacentre services to support the business to meet aggressive timescales set to launch the exchange.

Tradefair allows people to trade on the world's financial markets including indices like the FTSE 100, and DAX, along with commodities and interest rates.  This can either be done through a binary or spread bet with Tradefair who believe that it is significantly cutting the cost and complexity of financial trading. 

Tradefair builds on the Group's know-how gained from 7 years' running Betfair, the hugely successful sports exchange, with similar concepts applied to investing on financial markets, namely people trading against each other via the exchange.  Currently the Tradefair site is an early release with the company in the process of testing new products and building additional systems and adding new asset-classes and contract types for the exchange with some exciting releases starting early next year.

With revenues for 2007 growing 30% to over £182 million, Betfair Group now has a million registered customers, 433,000 of them active (up 57% on the year before), with these bettors playing, on average, 9 times every month.  This means that Betfair handles more than 300 bets a second and 5 million transactions per day - more than all the European stock markets combined. 

Andrew Phillips, Tradefair's head of systems who joined from Betfair, says, "Betfair pretty much has a self sufficient approach to IT with virtually no outsourcing done at all. Our standards were extremely high and we felt we could do things better in-house rather than working with third parties. With Tradefair, the time scales between go-ahead and site launch have been so aggressive that we needed to get up-to-speed far faster, recruit an IT team and build a full production data centre which could cater for huge volumes. There was no option but to get outside help."

After reviewing various options and carrying out due diligence, ControlCircle was chosen as Tradefair's data centre partner to support this process. Phillips says, "ControlCircle offered value for money, has an impressive client base who have similar requirements to ours in terms of uptime, they're knowledgeable, practical and agile enough to deal with our changing requirements."       

Today, ControlCircle is managing Tradefair's presence in Global Switch London 2, Europe's largest purpose built carrier neutral data centre, while providing a range of associated services.  These include physical security such as CCTV and biometrics, 24/7 monitoring, BGP Internet connectivity and managing the data centre build and cabling. This covers installing Tradefair's numerous servers, load balancers, storage arrays, data bases, firewalls and tape back up systems.  Written in Java, the Tradefair site runs on LINUX-based servers and MySQL databases. 

Although a relatively small organisation, Tradefair's datacentre and networking requirements are that of a much larger company and it is taking advantage of ControlCircle's own fault tolerant 20 gigabit Ethernet network in London (offering active/active resilience) which ensures high quality of service to all customers and market makers. 

Robin Osmond, Tradefair's chief executive officer, says, "There are three prerequisites to make a derivatives exchange like Tradefair successful.  First, having the best retail exchange technology in the world, which is why we are building on what Betfair has pioneered and moving it to the next level of throughput and scalability. Second, architecting our IT infrastructure so that the technical deployment runs at exceptionally low latency and high availability.  And third, putting in place the best internal and external terms, with companies like ControlCircle, enabling us to operate day-to-day and deal with the ongoing operational challenges of running the exchange." 

As the site and new exchange rolls out, ControlCircle is doing all the installation of systems in the datacentre, while Tradefair's own internal specialist IT staff focus on building and testing the core trading engine, taking it  to full production environment.  Phillips says, "We just didn't have the time or resources to do all the datacentre build out and management ourselves like at Betfair.  With Tradefair, we've hired who we consider the best, and as ControlCircle have taken the time to assemble a team who really know what they're doing from a datacentre service perspective, we'd be silly not to take advantage of it."

Phillips says, "When we found ControlCircle, it was reassuring.  They had the right attitude and understood the standards and degree of perfection I expect in terms of process and documentation yet have been flexible and quick to respond to changing scope. In my experience, this is often mutually exclusive. Either suppliers are good at process, but not particularly flexible, or adaptable but poor on detail.  Our experience with ControlCircle is they're both."

For example, when Tradefair first designed the new exchange, it adopted a similar approach to cabling racks in the datacentres as had been done at Betfair, connecting each cabinet by a satellite switch to the core.  However, the resulting latency from this architecture did not meet the requirements of a financial exchange and the design was changed to a 'host looming' approach.  This minimises and makes latency more predictable.  Phillips explains, "In a betting exchange, latency of 35 to 300 milliseconds is acceptable - in other words, you place a bet and get a response 35 to 300 milliseconds later.  With a financial trading exchange that isn't enough.  Our target is to be 10 milliseconds or less, and ideally closer to 1 millisecond end-to-end per transaction at full load."

The impact for ControlCircle was significant as the project scope increased from just handling a few category 6 cables per rack, to over 48 per rack all of which had to be precisely installed.  Phillips says, "It is a good example of ContolCircle's flexibility. Once we changed the design, they went away, considered what needed to be done and came back with an approach which meant they could do it without affecting delivery times, even though there was more work to do."

Phillips continues, "In the world Tradefair operates in, small differences in latency have a huge effect on the tightness of the spread (the value to the customer) and makes all the difference between having a compelling product or not. It's the hottest issue among market makers, potential business partners and customers where it is common to measure response times down to micro-seconds."

Latency is crucial as it means that everyone participating in the market has less reason to be concerned that the underlying price may move while the systems process transactions. While the best traditional equity exchanges operate around 2 milliseconds, they are built on the premise that few brokerages and institutions connect to them. Phillips concludes, "Typically you're talking about a few thousand concurrent connections on private circuits which are fully optimised for that discrete number.  At Tradefair we're looking to interface with hundreds of thousands of concurrent users, all connecting over a mix of circuits - high speed private connections and even Wi-Fi from the home. To achieve this, the software, cabling and switches have to be lightening quick, and from a datacentre design and management, this is where ControlCircle is really adding value and helping us."

Damian Milkins, ControlCircle's chief executive officer, says, "In most companies, IT is seen as a cost centre.  At Tradefair, it's completely the reverse. IT excellence is seen as a key differentiator and a direct revenue driver so if there are any issues with systems under our management, their business suffers.  Uptime is critically important therefore and we're delighted that Tradefair has faith in our abilities and has chosen us as its partner for this crucial job."

[1] An exchange derivative such as a stock, bond or future

- ENDS -

About ControlCircle

ControlCircle, a City-based data centre services company, is focused on designing, implementing and providing ongoing monitoring & management of mission critical networks and systems for companies and e-commerce sites who need complete confidence in system uptime and security. 

Vendor neutral, with a consultative approach to meet clients' needs, ControlCircle offers an end-to-end solution covering data storage, network security, networking and connectivity, hosting and managed services.  And it is the breadth of its managed services, SAN and 24/7/365 monitoring and support which sets ControlCircle apart.   For further information about ControlCircle, visit www.controlcircle.com

About Tradefair and Betfair

Tradefair was launched as a subsidiary of Betfair in Autumn 2007 and was the first application of its exchange technology outside the betting industry. Focusing on financial markets, Tradefair uses the exchange for products like binaries and Hi-Lo, while relying on a white-label partnership for its spread betting product. Tradefair moves the Betfair Group into the online retail financial derivatives market and is expected to achieve FSA authorisation shortly.

Betfair is the world's biggest online betting community and pioneered the first successful betting exchange in 2000. Driven by cutting-edge technology, Betfair enables customers to choose their own odds and bet even after the event has started. The company now processes 5 million transactions a day from its 2 million registered customers. In addition to sports betting, Betfair offers a portfolio of innovative products including casino, exchange games and poker.

Betfair has twice been named the UK's 'Company of the Year' at the Confederation of British Industry's Emerging Business Awards and remains one of the only betting companies to win a Queen's Award for Enterprise, being recognised for Innovation in 2003 and most recently for International Trade in 2008.

Betfair currently employs over 1,350 people, principally in London, Malta and Tasmania. The company is a licensed betting operator in the UK, and holds licences in Australia, Germany, Austria, Italy and Malta.

Tom Herbst PR
T: 0207 274 9937
Mobile: 07768 145571
tom@tomherbstpr.co.uk