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Thomson Reuters Acquisition Formalizes Vhayu Role in RMDS Technology Stack |
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A-Team Insight
08/26/2009 |
This month’s sale of Vhayu Technologies to Thomson Reuters appears to have been sparked by the realization by Thomson Reuters that the Vhayu Velocity analytics engine – and its role as foundation for the Reuters Tick Capture Engine – forms a key element of the Reuters Market Data System (RMDS)-based trading room technology stack and is too important to be left in the hands of a third party.
Vhayu’s star has been rising at Thomson Reuters, in part through the adoption of Velocity to underpin both Reuters’ real-time market data services and its DataScope Tick History product. Once on fully board at Thomson Reuters, the Vhayu platform, according to Vhayu, will become an integral component of the Thomson Reuters Quantitative and Event Driven Trading solution, which provides tools for developing pre-trade analytics and trading strategies. As part of the deal, Thomson Reuters also gets Vhayu’s Squeezer product, which uses hardware acceleration technologies to compact and store vast amounts of tick data.
All of which points to the huge importance to Thomson Reuters of being able to process increasingly high-speed and high-volume data as this capability goes mainstream. With alternative trading venues and traditional exchanges all raising the bar in terms of order turnaround times and data throughput, the ability to support clients seeking to develop high-end trading capabilities could translate into a key differentiator for Thomson Reuters.
Los Gatos, Calif.-based Vhayu, which started life as a complex event processing (CEP) platform, brings with it some 70 clients. It has sat within the Reuters trading technology stack since the original partnership agreement was signed four years ago (Market Data Insight, June 2005). And while other third-party-supplied elements of the stack have come and gone – the half-hearted relationship with OMS platform Orc Software springs to mind – Vhayu has remained, its position strengthened by the rise and rise of high-performance and algorithmic trading over the past three or four years.
Terms of the deal weren’t disclosed; Vhayu is a private company, and the fact that Thomson Reuters didn’t even announce the transaction indicates the relative lack of impact from a revenue standpoint. As with several other transactions in the space recently, the deal was managed the sale for Vhayu, its management team – led by CEO Jeff Hudson – and its investors, which included Menlo Ventures, Garage Technology Ventures, and Silicon Valley Bank.
It appears that Hudson and his team have set out to do what they said they would back in 2005 when the original Reuters partnership deal was consummated. Then, Velocity/Reuters Tick Capture Engine was pitched as a solution for allowing clients to use streaming and historical data across multiple market venues to build detailed analysis and back-testing of algorithmic strategies.
Specifically, TCE was aimed as a complementary capability to the then-recently launched Reuters Data Feed Direct. Under the broad arrangement, Reuters distributed and supported Vhayu Technologies’ application software optimized for Reuters’ data and feeds with value added capabilities around RDF Direct and RMDS. The aim intent was to offer customers support for deeper and broader tick-by-tick data combined with a more resilient and a higher performing interface to the market data required for increasingly sophisticated trading strategies.
Vhayu was founded in 1998 by former Intel technologists who were lead architects for the Pentium and Merced chips. The company was granted a patent in 2005 for its method of processing and compressing market data.
Its strange name originated in Hinduism, where Vayu is a primary god and represents the element of air. As the team says: “We put the letter H in there just for kicks so that no one could pronounce it (what’s that company called again, Vahayu? Vahahoo?).”
Let’s hope they don’t lose their sense of fun.
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