Read part two.
What SOA trends are you seeing in the financial services industry?
What we're seeing is that SOA coupled with a class of applications coined as extreme transaction processing or XTP is the future for financial services infrastructure. So IT continues to be seen as the enabler. We've seen some supporting data from Gartner/DataQuest that IT spending in financial services is going to reach $566 billion by 2010. Where SOA comes into the picture is that it enables IT to deliver new business services faster, while leveraging existing systems. At the same time the financial institutions are pushing limits that require more processing capability yet at the same time they don't want to see an exponential rise in their investment in hardware. So the extreme transaction processing class of applications has been most notably seen in areas such as fraud detection, risk computation and stock trade resolution. They're even pushing the mainframe to the limit. These types of applications require a new computing paradigm. What does XTP provide?
What XTP does is allow transactions to occur in memory and not against the backend systems directly due to the need for extremely fast response rates, but still including transactional integrity. So think of classes of applications that need to handle large volumes of data that need to be absorbed, correlated and acted upon. Typically that data processed by XTP applications comes in the form of large numbers of events and usually represents data that changes frequently. What is Oracle doing with the XTP paradigm?
We have some products in that area. We have Oracle Coherence, which is from an acquisition we made early last year of Tangosol Coherence and its products. That coupled with Oracle SOA Suite delivers the industry' first Grid-enabled SOA platform that enables extreme transaction processing applications. Where is XTP used?
There's some use cases around XTP. What we're seeing for instance in financial services have to do with collecting and correlating large volumes of events, which can tie into or overlap with complex event processing [CEP] applications. It's things like doing exception handling on large streams of events and looking for certain patterns that occur over spans of time. In financial services, for example, it might be that we're tracking ATM withdrawal activity across a span of time looking for specific events across a transaction network that aren't supposed to happen, doing fraud detection for example. There was something that happened to me recently where somebody had gotten hold of my credit card and was using it in a way that was automatically detected and identified, which I'm thankful for.
What does XTP add to CEP?
What XTP brings to the table is something that is really complementary to complex event processing engines. Usually, a complex event processing engine is something that can also capture, correlate and apply decision rules to look for specific patterns in events over time and look for exceptions. However, there are certain applications that operate on streams of event data that is so voluminous that typical backend solutions or storage solutions just can't handle it. There are some customers that we deal with that are saying there just aren't disks that spin fast enough to handle the volumes of data that we need to consume and process. So in that regard, a CEP engine by itself is not sufficient to handle those applications. XTP ties into CEP and SOA in the Oracle Coherence product, which is very adept at acting as a horizontally scaleable in-memory cache that can collect pieces of data that come in from events in a variety of high volume streams and basically act as a place to store the event data with high-speed in-memory access without necessarily requiring backend persistence storage to maintain high availability for that data. Where that ties in with CEP is when that data is collected it can be analyzed by a CEP engine, so patterns can be applied and looked for across that data. Then it also ties into SOA?
Where that ties into SOA is once the pattern matching engine, whether it's built directly into the XTP application itself or is identified by the complex event processing engine, is it identifies an event of significance such as ATM withdrawal fraud. Say for example your ATM card is used in different ATM machines or is used to make purchases in three or four states or even different countries within a matter of minutes, that's usually a flag that some kind of fraud is going on. Once that kind of a situation is detected then an SOA process in BPEL [Business Process Execution Language] can be kicked off to make the proper notification, send alerts to Business Activity Monitoring [BAM] dashboards.
In part two of this interview tomorrow, Chappell discusses the technology behind XTP and how it applies to industries beyond financial services.