Toomre Capital Markets LLC

Real-Time Capital Markets -- Analytics, Visualization, Event Processing, and Intelligence

Event Driven Architecture - Event Processing Moving Forward?

There is considerable and growing interest in how to automate the intelligent processing of various information events (or more technically changes in state values like, for instance, changes in the price of a particular stock).

Various technical terms have been used to describe this new paradigm of processing information. Phrases such as Complex Event Processing ("CEP"), Event Stream Processing ("ESP"), and Business Event Management ("BEM") are bandied about. Potential users, business managers and IT managements are confused by what these various terms mean and how, if at all, they differ from one another. They often ask, "How does CEP differ from what they now do with custom C++, Java or C# coding and traditional SQL data bases?"

Toomre Capital Markets LLC ("TCM") would suggest that the all of above terms are really one in the same. As a result, as TCM continues its discussions with various financial firms, hedge funds, asset managers and financial intermediaries, henceforth we are going to refer to CEP, ESP and BEM all as part of the new (and likely) disruptive new technology paradigm called Event Driven Architecture ("EDA"). TCM is not the first organization to use this term, but have found that it is more easily understood by business managers in the financial services and capital markets vertical.

Wikipedia defines Event Driven Architecture (EDA) as "a software architecture pattern promoting the production, detection, consumption of and reaction to events." In software terms, an event can be thought of as "a change in state in excess of some minimum threshold". For instance, if a trader were to purchase additional securities that took him or her from an existing position total over predetermined trading limits, an event would be triggered as soon as the total calculated position value exceeded the preset limit.

Recently, Phillip Howard, Director of Research - Technology at Bloor Research published an informative piece entitled Event Processing Moving Forward. Mr. Howard argues that, apart from the move to toward a standard language of event processing, what will really drive the business community acceptance of EDA is the entry of IBM and/or Oracle into this space, and Progress Software's rollout of its Apama event processing product to its partner base in 2007. He suggests that the Apama roll-out likely will result in "a significant increase in the number of applications that embed event processing technology, which will dramatically grow the market. Indeed, it is the embedded market (which, incidentally, doesn't care much about standards) that is likely to be the biggest driver for growth in the event processing market."

Earlier in the month of February 2007, Rich Seeley of published a thought provoking piece entitled SOA + CEP = 'a new physics of computing'. In that article, he interviews John Bates, Vice President in the Apama Division of Progress Software. Mr. Bates, whose research at Cambridge University in the U.K. helped to pioneer the event-driven paradigm, argues that service-oriented architecture has already proven a disruptive force in the world of IT, but adding complex event processing (CEP) to it could create "a new physics of computing."

The balance of Mr. Seeley's informative article explains how EDA is different from the more traditional method of storing data and then running queries against subsets of the data base. In an EDA application, the relatively static data set queries are defined up-front and then the dynamic data is flowed through the various rules and pre-defined calculations as the various event states change.

Toomre Capital Markets LLC suggests that readers interested in Event Driven Architecture (or CEP) read both of the above articles for a better understanding of this newly emerging and disruptive paradigm of application deployment. TCM offers consulting services in the realm of CEP and EDA using one of the premier products produced by Streambase Systems, a TCM client.

Please get in touch with us at the contact information at the bottom of this page if we can help your organization move to this new paradigm of informatively processing events. There is far more to this type of technology than just algorithmic trading. Reader thoughts and comments are welcome.