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Dell Accelerates Servers For High Frequency Algo Trading

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Dell has developed a speed edge for high frequency traders (HFT). The computer company has created firmware, the Dell Processor Acceleration Technology, for several of its high end Intel-based servers. It allows users to increase the speed of PowerEdge R620, R720 and R720xd servers with the Intel E5-2690 processor by 13 to 31 percent just through downloading a free BIOS update.

The Dell servers run on the latest Intel eight-core processors which have a provision to go to turbo mode when that’s required to handle high volumes of work. Moving in and out of turbo mode, however, creates jitter, something that traders want to avoid. Dell’s proprietary technology, which the company plans to patent, turns off seven of the cores and locks the remaining processor into turbo mode running at 3.8 GHz with access to all the cache on the processor.

“We can lock it into that clock speed to minimize jitter and it is fully warranted for three years, can run 24x7 and costs no more than a standard server,” said Bob Barris, vice president of sales at Dell.

This solution is designed to work with all supported operating systems for PowerEdge 12th generation servers and also supports Dell’s agent-free OpenManage Essentials monitoring solutions. Customers may also pre-install other high performance components to the servers from the factory, including low latency network cards, high performance memory, and hot swappable front-facing PCIe SSD storage.

The company said that an IT Director at a large algorithmic trading firm in Chicago reported an improvement in its application performance by approximately 10 percent over the previous test unit – just by updating the existing server to the new firmware.

Dell’s previous effort at high speed servers, the 710, ran on a six-core Everest processor operating at 3.4 GHz. Intel turned off most of the cores to increase the speed to 4.3 GHz, although the processor was commonly referred to as a 5 GHz chip. The processor threw off a lot of heat, could be used for only 12 hours a day, cost two to three times as much as a standard server because it was produced in small numbers, and had an Intel processor warranty of just one year. When I looked around for users a year ago I could find only one New York trading firm and they weren’t willing to talk. Dell’s new approach is much more mainstream but provides a significant speed improvement that gives high frequency traders an edge.

Coming from Dell whose dull gray commodity computers were probably a major impetus behind the Bring Your Own Device (BYOD) movement by users who wanted something more attractive to work on, is something of a surprise, but Barris says Dell is an HFT powerhouse.

“We have been an arms dealer to the HFT space for years,” Barris said. “When we get a hard look at our technology in comparison to benchmarks, we tend to win more than we lose. We always lose when nobody looks at us,” he added, in tacit admission that the Dell brand doesn’t necessarily spring to mind when companies are looking for the latest and greatest tech.

In reality, he added, Dell is usually first to market with the latest Intel processors, often months ahead of its competition. Dell plans to run the new servers and BIO upgrade through STAC, the financial services industry benchmarking test firm.

“For the last several years we have focused on the HFT space. It’s not a lot of units but it is a profitable market and they buy the leading technology. About two years ago we were the first, and maybe the only, OEM with the Intel Everest chip.” Dell must be hoping this new approach leads to larger sales than Everest; one computer magazine estimated each Everest chip cost around $10,000, making them the most expensive x86 processors ever.