We recently had the opportunity to lay out our vision for Derivitec and its cloud offering in a short interview with the FinTech recruitment agency Harrington Starr. In particular, we focus on our move from desktop to web based applications, with all the benefits that brings to both Derivitec and our clients. As we say, “Above all, we’re here to make our clients’ lives easier”. Enjoy!
From Harrington Starr Insight Magazine, September Edition
Harrington Starr: Hi George, we really enjoyed hearing you speak at the New Finance event in July. Tell us what Derivitec is all about.
George Kaye, CEO, Derivitec: Derivitec, first and foremost, is a pure cloud solution for derivatives analytics. We offer market data, portfolio management, and risk analysis, straight from Windows Azure, with no installation requirements. Applications are completely mobile, and supplied at a price which scales with the client’s needs.
Harrington Starr: What is it specifically that Derivitec does that solves this problem?
George Kaye: By hosting our services in the cloud, we have access to an essentially unlimited compute and data resource, which can scale from standard end of day risk to full strategy backtesting and regulatory capital calculations. The scope is really defined by the client. If all you need is end of day price checks, that’s what you pay for. If you need full risk coverage, likewise. You can scale your costs up and down as the needs of your business dictate.
Harrington Starr: Tell us about how putting analytics in the cloud solves this?
George Kaye: When analytics sit in the cloud, they immediately become part of a scalable resource. Windows Azure provides us with all the components we need to make high performance analysis possible. Our services can consume requests from both desktop and web applications, distribute those requests, along with the corresponding derived market data, to an array of worker nodes, and feed the results back asynchronously to the front end. Simply by signing up in our web portal, any client, whether a sole trader, or a large institution, has access to the same, high performance, validated analytics. How much they consume is up to them.
Harrington Starr: Is it really as straightforward as that?
George Kaye: Ha ha! It wasn’t exactly straightforward to set up, and that’s perhaps one of the reasons we’re one of the first to do it. Building a cloud based business is a steep learning curve in itself, but when you add in the need to have long experience in the product and analytics space, to say nothing of the complementary skill set for the desk and web based front ends, and the need to have a robust market data process sitting in the background, the project becomes quite daunting. The key thing though is that it is as straightforward as that for the client.
Harrington Starr: So what’s the plan now?
George Kaye: Build up and build out. We’ve built our platform to handle the equity derivatives requirements of hedge funds, but we’re keen to expand both our asset space and our product space. And of course, as we’re web based, the needs of our clients can be incorporated quickly and seamlessly. That’s the beauty of this technology: everyone grows together. The more usage and feedback we get, the better this product is going to be, for everybody.
Harrington Starr: How do you think you differ from the existing systems?
George Kaye: Existing derivatives ISV’s have been quite reticent in embracing the cloud, and I think the reason for that is simple: they can’t afford to, either from a revenue point of view, or a development one. There are well established companies who do provide a cloud offering, but it tends to be as a computational add-on to their existing license model, so the clients really don’t benefit from the economies of scale. Of course, we can’t yet provide the same scope as businesses who’ve been around from 10 years or more, but most of the people we speak to complain that existing systems provide too much of what they don’t need, and not enough of what they do. When innovations to systems are requested, turnaround is just too slow for the client’s business cycle, and requires complex reinstallation etc. We cut through all of that. Requests can be turned round and pushed out quickly, with no need to reinstall anything.
Harrington Starr: When can we expect the first web based product launch?
George Kaye: We’re on track for a first push in December. The scope will be US based equity derivatives, but we would expect to expand on that shortly afterwards.
Harrington Starr: What, in your view, will define success?
George Kaye: Uptake and positive feedback. Having new clients blog on how Derivitec either allowed them to get up and running quickly, or provided a more flexible and cost effective alternative to their existing vendor, is really what it’s all about. Above all, we’re here to make our clients’ lives easier. When, and only when, we are shown to have done that, I’ll be prepared to say that we’ve succeeded.
Harrington Starr: George, thanks very much for talking with us and we wish you the very best of luck with Derivitec. We look forward to seeing the continuing success of the company.