Strate, the licensed Central Securities Depository (CSD) for the electronic settlement of financial instruments in South Africa, has worked closely with Obsidian Systems to roll out an open-source strategy that has helped it to reduce operational costs in its technology environment with no compromise to reliability and availability.
The organisation today runs a number of its most important front-end applications on Red Hat Linux and the JBoss Enterprise Platforms, implemented and supported by Obsidian, South Africa’s leading provider of open-source solutions. By opting for professional open-source solutions where it makes sense, Strate has managed to achieve significant cost-savings over the past three years.
Strate's core purpose is to mitigate risk and bring efficiencies to the South African financial markets and for this reason they can tolerate no downtime in its IT environment. At the same time, the company is under pressure to offer its products to participants in South Africa’s financial markets at the lowest possible cost.
Says Manoj Puri, Strate's Head of Information Technology: “Strate has a pragmatic approach to technology: we will always use the right tool for the job. We are constantly striving to be as cost-effective as possible, while ensuring that we provide a stable and flexible platform that meets our clients’ needs,”
In line with this philosophy, Strate started to introduce open-source solutions into its environment several years ago. The company was satisfied with the cost and reliability benefits it was deriving from open-source, but realised that it would need to move to professional open-source from vendors and consulting partners to support its fast-growing open-source environment and limit their risks.
Advantages of opting for a flavour of Linux provided by a commercial open-source vendor such as Red Hat would include access to product roadmaps and the same level of professional support and service as companies expect from any other commercial vendor. For a mission-critical operation like Strate, relying only on the open-source community was not an option.
Strate sought out a consulting, services and support partner with certifications and proven experience in its open-source products of choice. Obsidian emerged as the partner of choice because of its track record, professionalism and willingness to enter into a true co-sourcing partnership with Strate, says Puri. “Since Obsidian came on board, our value and usage of open-source has grown 10-fold,” he adds.
Strate’s core back-office applications still run on its legacy mainframe and Unix platforms, and are likely to do so for the foreseeable future. Open-source solutions are used primarily for the front-end of financial applications such as Beneficial Disclosure, Securities Settlements, Money Market Products, and Corporate Actions Enhancement.
By opting for open-source for these solutions, Strate has been able to migrate users away from green-screen terminals to graphical user interfaces for most of its applications at an affordable cost. “Skills are readily available and affordable for the open-source products that Strate is using,” says Puri.
“In addition, Linux and JBoss run on affordable commodity hardware rather than on expensive mainframes,” he adds. Support and licensing costs for the open-source solutions are also lower than they are for any of the commercial solutions Strate considered.
“Organisations such as Strate that need stable, scalable and flexible solutions at the best possible prices are increasingly looking to professional open-source as an option,” says Muggie van Staden, managing director at Obsidian. “Working with professional open-source vendors and their services partners gives them the best of both worlds: the low costs, innovation and openness of open-source and the peace of mind of working enterprise vendors with extensive R&D capabilities and a massive support infrastructure.”