Confinity Solutions: Developing High Volume Low-Latency Solutions with Confinity Low-Latency Messaging 

Confinity Solutions | Stefan Ott: Developing High Volume Low-Latency Solutions | The Enterprise World

From financial inclusion to embedded finance, fintechs are continuing to steadily transform the financial landscape on a global scale. Our leaders of 2023 are those who have survived and thrived both boom and bust within 24 months. They have also exhibited outstanding resilience and they offer optimism for the year ahead too. Stefan Ott (CEO and co-founder of Confinity Solutions) is a fintech leader who is shaping the industry at a global level by leading with an example. His work has changed the perception of finance and contributed to innovation in the industry. 

Future-Proof Material

While working with IBM, Stefan thought of an idea to start his own company. He founded Confinity Solutions in 2016 to buy out two special products from IBM. When IBM was rationalising its software portfolio, it realised that out of 4,000 plus software products, some products were niche products and market-specific , eg. belong to the financial industry. However, IBM realised the lack of potential in those products and decided to retire them. It triggered Stefan’s thought process to do a management buyout and acquire the source code of these two products. 

Since he was not happy with IBM’s decision of cancelling these products, Stefan decided to give new life to those two products. They were serving customers successfully and now Confinity continued the same and built new happy customers. Confinity Solutions not just revived those two products but also enhanced and built them as future-proof material in leading-edge technology. The decision resulted in framing a new customer base and expanding the services of the company. 

Steep Learning Curve

After taking over the products, Confinity Solutions experienced a steep learning curve to understand how sophisticated these products were. When IBM developed them, it received a number of  authentic patents for them which were part of leading-edge technology for ultra-low latency and multicast messaging. IBM-patented products were used by several high-frequency traders and stock exchanges in the financial markets for ultra-low latency messaging. Later on, when Confinity Solutions took over the products, it tried to keep customers happy and continued      the maintenance, error correction, and bug fixing. 

Adapting to Local Culture

Stefan has come a long way in his professional journey. He started it in 1988 as Head of Marketing Information-Systems at Deutsche Boerse AG in Frankfurt. Here, he was responsible for TPF, pcKISS, and BIFOS. In 1995, he joined      Reuters (later Thomson Reuters) and performed the work of Global Head of Common Platform for Content Management. Later, he started handling worldwide sales and business development for financial markets software at IBM Deutschland GmbH.

Stefan was a part of a team responsible for marketing and selling Websphere Front Office ( a market data distribution system) and  MQ LLM (Low Latency Messaging) products, as well as the financial markets framework offerings. He found the job role interesting as it allowed him to adapt to the local cultures, the local people, etc. 

Remote Working Solutions

While handling the responsibilities at the global level, his experiences in the previous companies helped Stefan to deal with his employees and customers who belong to different geographic regions. Due to this, Confinity Solutions has now a presence at the global level in terms of customers and spreading services at the international level. Its customers have spread from China to Mexico and Europe who speak different languages and have different cultures in terms of negotiating methods and contractual agreements. 

The company is based in Frankfurt, Germany and has a development and maintenance centre      in India. It shows different language skills as the Indian base provides services to customers based in Latin America who can speak only Spanish or to the customers based in China and Taiwan who know only Chinese. Therefore, Stefan has hired people with different language background skills. So that it becomes easy to cover different customers in different languages. It helps to communicate with the customers on a local basis in their local languages which creates one of the biggest differences. 

Connecting with Customers around Globe

Confinity Solutions had begun its journey 6 to 7 years ago as a startup when Stefan was in the late phase of his career and professional life. Today, at the age of 62 years when he looks back on his journey, it amazes him that at the age of 55 when he established a new company, he would be thinking of taking early retirement. However, he thought of starting something new and fresh and connecting with customers around the world through a startup. He expanded his startup around the world and established a strong customer base and doubling the amount of revenue is itself a big achievement according to him. 

User Group Conferences

After getting familiarised with the product in a short period, the company started serving its customers better than before. It asked the customers for their interest in working together with it in enhancing the product. For example, Confinity Solutions invited its customers to user group conferences and asked them to express their opinions and enhancement requests. The program provided a platform to discuss modifying products according to customer needs and their benefits. It led to selling more licences of the products and serving all customers and receiving no single cancellation from any of them. 

High-Performance Messaging Industry

The replacement for IBM WebSphere MQ LLM is Confinity’s Low Latency Messaging (CLLM). It is a solution created for the high-performance messaging industry, which is distinguished by extremely large message volumes and requirements for a latency of less than one millisecond. The front-office messaging needs of financial institutions are the main focus of the current version of CLLM. Whilebeing introduced as a product in November 2007, Reliable Multicast Messaging, a project from the IBM Haifa Research Lab, had been in development for some years prior. Despite being marketed as a member of the IBM WebSphere MQ messaging family of transports, LLM from IBM has always been a distinct product.

Started as a Fintech Startup 

Confinity Solutions was founded in 2016 to acquire IBM WebSphere Front Office for Financial Markets and IBM WebSphere MQ Low Latency Messaging (LLM). Confinity Solutions is a fintech startup with an established global customer base (25+ customers) and mature solutions (8+ years on the market). The following message types are typical in financial market applications that would need CLLM performance characteristics. It includes order data, market data, trade data, events data (notifications, alerts, and so on and so forth. It does not prevent its usage in other market areas, including telecoms and automotives, where similar messaging qualities of service may be necessary, even if financial markets are one of CLLM’s initial target markets.

Robust Market Data Platform

Confinity Market Data Solution for financial markets is a robust market data platform providing ultra-low latency connectivity to exchanges, consolidated data feeds, and electronic markets. It provides the following unique services and keeps upgrading them: 

  • Ultra Low Latency: IT teams are assisted by Confinity Market Data Solution in prioritizing speed. Confinity Market Data Solution offers high-speed multicast and unicast messaging functionality through integration with Confinity’s Low Latency Messaging (CLLM).
  • High Throughput: To facilitate the delivery of market data to nearby or distant clients, Confinity Market Data Solution includes both multicast one-to-many distribution and point-to-point (unicast) messaging capabilities.
  • Modular Design: Confinity Market Data Solution redundant feed handlers comprehend feed formats, create a cache of objects that are only published upon request, and then send the objects to the object distributor for distribution. Within an enterprise setting that uses a LAN, WAN, or the Internet, numerous object distributors can be implemented. Self-managing object distributors converse with one another to create a group middleware layer that routes traffic and requests from clients that have subscribed.
  • High Availability: Confinity Market Data Solution uses redundant components at all levels of its distributed architecture, which is optimised for high availability. The system can be set so that even many component failures do not result in service interruptions, meaning that no single component failure can ever result in a service interruption.

Employees as Crucial Resources

Employees are the crucial resource of every company. Developers in India have to understand customer requirements and translate them into software code. Employees who communicate with the clients daily are also equally important as they listen to customer demands. Stefan makes sure that he is leading by example rather than leading by order. He tries to make the teamwork non-hierarchical and therefore the teams meet regularly irrespective of the location they are working. Having proper communication with the team, understanding the different cultures with different nationalities from Venezuela or China, etc. 

Seamless Experience for Customers

One of the unique characteristics or features of the product of Confinity Solution is reliable multi     cast messaging with very low latency and high throughput. While explaining the seamless experience of customers at Confinity Solutions,      Stefan gives an example of the traditional      old stock exchange businesses, eg. the New York Stock Exchange or      the Frankfurt Stock Exchange. Traders and brokers were running around on the trading floor and one was shouting out loud bid / ask pricesto all the traders and the market participants.

It was a traditional way to trade stocks and instruments in the financial markets. Therefore, shouting out or asking for prices in person can be achieved if everyone is in the room. If someone wishes to do a similar act in the electronic world then the product CLLM of Confinity Solutions comes into the picture. It provides reliable multicast messaging for example with      one sender transmitting messages to many recipients. 

Electronic Open Outcry System

Receivers could be tens or hundreds of market participants. The products of Confinity Solutions guarantee that the sender is notified by each receiver that the message was received, acknowledged, and confirmed. Hence, the sender is aware that everyone has received it and the sender can even resend, retransmit the message again. It is handled by CLLM software that makes the product unique from any other product in the market. Furthermore, the software digitalizes this traditional open outcry system on financial markets. It helps the customers to move out from the traditional open outcry market to the electronic market. The majority of the customers of Confinity Solutions are the stock exchanges or derivatives exchanges around the world.   

Consistently Improving

Every industry has to stay innovative and competitive in the market to sustain for a longer time and Confinity Solution is no exception for that. Being from a niche market, there are not so many competitive players in the industry. Its competitors with similar products and services lack multicast messaging services which Confinity Solutions has. To stay ahead of the competition, it is consistently trying to improve its products. 

Currently, CLLM  has a latency of two to four microseconds. Still, the company      is trying to build the next generation version of its product that will utilise a kind of hardware chip, silicon even. With that some of CLLM’s functionality which runs in the CPU of a computer now; will be processed on a chip thus further improving throughput and decreasing overall latency. This is another leading-edge improvement that stimulates new opportunities inside and outside financial markets

Balance of Experience and Entrepreneurship

Being a successful as well as a decorated leader, Stefan wants upcoming entrepreneurs to have clarity over vision and mindset. The most appropriate advice for them depends upon when they start their journey and they must have good ideas and unique ways to tackle them at work. A balance of having experience in the industry and enthusiasm to work together can go hand in hand and make the ideas work out. Stefan adds, “ Nowadays, many entrepreneurs have bright ideas but lack the business angel side and experience in general. In short, there should be a good balance between experience and entrepreneurship.”

Leading by Example not by Orders

Being a leader in the market, Stefan says, “The most important responsibility of the leader is to be able to adapt to the changes in the market, to convince your community about your ideas, lead the team by assuring them and not giving orders to them.” He believes in focusing on the customer’s demands, listening to them, and being open about new suggestions from teammates as well as customers. According to him, listening is more important than speaking or giving orders as it gives a major perspective about various things at work. 

Did You like the post? Share it now: