Cisco Gives Low-Latency Switches an ‘Algo Boost' for Nanosecond Performance

Networking hardware giant Cisco has released a new high-performance data switch designed for high-frequency trading environments, which employs a new technology dubbed Algo Boost that slashes latency for some processes to double-digit nanoseconds.

The new 3548 switch replicates feeds to different ports on the switch for delivery of data to multiple destinations in 50 nanoseconds using a feature called Warp Span (Switch Port Analyzer), provides bi-directional multicast replication along with features such as security checks and audit processes for small to medium-sized Layer 2 and Layer 3 environments in 190 nanoseconds, and for larger environments in 250 nanoseconds. The switch also embeds Precision Time Protocol directly in its hardware to support accurate and granular analysis and correlation.

Officials say that the 190-nanosecond latency reflects like-for-like improvements of 75 percent over its previous Nexus 3064 switch, but that the new model will be available at a similar price point, and that clients of its previous platforms will find the migration almost seamless.

Dave Malik, senior director of solutions architecture in Cisco's Advanced Services group, says the new switch was developed in direct response to demand from financial market participants -- from exchange venues to connectivity providers and buy-side and sell-side firms -- concerned about maintaining low latency while avoiding packet loss during periods of high volatility and microbursts.

A cross-section of around 10 clients are already deploying the switch into their test environments -- which Cisco expects will move into live production by year-end -- and Malik says the vendor is seeing demand from risk and compliance staff wanting to investigate trades, events and outages at a highly granular level.

"Microbursts are where you can make or lose money -- so this gives you visibility into when they occur and how long they last... so that when a client calls and asks why their trade took longer to execute, you can look back and detect events at nanosecond granularity and correlate trades to events such as microbursts," Malik says, adding that while the switch has potential benefits to deliver individual competitive advantages to all participants in the data distribution, capture and trading process, the more participants that implement the technology, the greater the benefits overall.

"Exchanges are competing for order flow against other venues and dark pools, so they need to be faster than the competition [to attract order flow] -- and you're getting a competitive advantage if every switch point in the infrastructure is 75 percent faster," he says. Likewise, the switch could offer a differentiating factor for data vendors competing for latency-sensitive trading clients, he adds.