Open source becoming increasingly important for Wall Street

Open source becoming increasingly important for Wall Street

on Aug 5, 14 • by Chris Bubinas • with No Comments

Jim Zemlin recently delivered a speech to several hundred Wall Street executives, highlighting the role played in this sector by open source solutions and how their impact is likely to expand in the future...

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By now it is clear that open source software's influence is growing. Organizations in every industry are increasingly turning to these solutions, eager to take advantage of open source's lower costs, greater flexibility and myriad other benefits.

One crucial area where this trend is particularly pronounced is Wall Street. Jim Zemlin, executive director of the Linux Foundation, recently delivered a speech to several hundred Wall Street executives, highlighting the role played in this sector by open source solutions and how their impact is likely to expand in the future, ZDNet reported.

Open source and finance
The news source noted that open source is already a prominent component of Wall Street's bedrock. The New York Stock Exchange, NASDAQ and New York Mercantile Exchange all run on Linux. According to Christoph Lameter, a specialist in high performance computing and high frequency trading solutions, this is due to the fact that Linux offers faster speeds than Windows and other options. This is essential in a world where a matter of milliseconds can have an impact on a firm's performance.

"[S]hared development is enabling faster development with higher quality and lower costs," Zemlin said, speaking of open source, the news source reported. "This is causing the software value chain to change."

Zemlin noted that many companies, on Wall Street and beyond, now hire professionals to manage external open source resources full-time. By 2020, he argued, half of all professional corporate developers will be focused on open source systems.

Security concerns
Zemlin also spent some time noting the potential downsides inherent to open source. Most notably, he addressed the Heartbleed security flaw, which he described as "a market failure in open source," ZDNet reported.

The problem, according to Zemlin, was primarily attributable to a lack of communication.

"[C]ompanies don't talk to each other about security problems," he said, the news source noted. "Every CIO said the same thing about OpenSSL. They all thought someone else was taking care of its security problems."

This is a key issue for firms on Wall Street and beyond as they move more and more of their operations toward open source solutions. While open source is theoretically extremely reliable and secure, this is only true when organizations follow best practices and ensure that solutions receive a sufficient amount of attention. As Heartbleed proved, this is not always the case.

Protecting open source
One effort to avoid repeats of this event is the Core Infrastructure Initiative. As ZDNet pointed out, the CII is an open source community dedicated to reviewing under-funded, critical open source software projects – including OpenSSL.

Highlighting the CII, Zemlin argued to his audience that companies should consider making three-year commitments to donate $100,000 annually to the group. He recommended that companies consider this an investment, one that will prove far cheaper than a serious security breach. With open source's role on Wall Street growing rapidly, executives at financial firms have a powerful incentive to make sure that the open source community at large is as well protected as possible.

Another key consideration is open source resources. For a firm to leverage open source solutions as effectively as possible, it needs to both invest in open source support and the personnel to utilize these tools. The former is much easier to find than the latter. While high-quality support tools are readily available, there is a high demand for open source experts. Yet if Wall Street firms or other businesses hope to fully leverage this technology, they need to invest in the talent to oversee such operations.

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