Rick Lane has been looking into the future for some time now. The former co-founder of Tickit Trading, which was acquired by Trading Technologies in 2010, has quickly risen from chief technology officer in April 2012 to the new CEO of TT.
His Tickit software has become a key product for TT, which rebranded the technology as Algo Design Lab, a system of algos that are easily pieced together and allow traders to make new trading systems quickly and safely in a virtual Lego-like fashion.
As CTO, he’s also been busy overseeing a major rebuilding of TT’s technology, which is soon to be unveiled. He now succeeds industry legend Harris Brumfield, who has run the company for the past 11 years. Brumfield will take on the role of chairman of TT.
Q: What is your approach and strategy as the new CEO at TT?
A: The plan is to transform the way our products are built and delivered. This is something that we will be open and transparent about in the coming weeks and months.
As a technologist, I believe that technology can solve all of our problems. That may not always be the case, but in TT’s case we have an aging platform and a company that has been built around supporting it and maintaining it. We need to start at the source and transform the way in which our products are built and supported. A more efficient company will revolve around that. A lot of that is well under way, but that’s the first major goal.
Q: What are your thoughts about succeeding Harris Brumfield, a legend in this industry?
A: I have big, big shoes to fill. Within the company, he is revered. His ways are not always the most orthodox in running a business. But he is very passionate about the company and about the products and people here. They know that and feel that. I have big shoes to fill to bring that passion to the table every day.
Externally, yes, he is a legend in the industry. He certainly made a name for himself as a trader. People trusted him and his decisions as they impacted our products. I come from a technology background, which in some sense reflects the evolution of this industry. Traders today do not look like traders from 10 or 15 years ago. I think I bring that aspect to the firm, but I still have a lot to learn. It’s going to be a challenge.
Q: How will Harris continue to interact with TT as chairman?
A: He will still be involved. In matters of the day-to-day business, he will not be involved. Harris still remains very passionate about the company and the direction of it and people here. We’ll still see him here in the hallways, which is good.
Q: You wrote in October 2012, that some components of TT’s architecture have become commoditized – messaging middle-ware, market data feed technology – and announced the plan to rebuild the entire architecture. What can you tell us about that project?
A: The project has progressed nicely and we’ll be announcing more details about it at FIA Boca and beyond. We’ve tried to be very prudent in identifying which aspects of TT’s technology that really differentiate us and which are a waste of resources when a better or equivalent product can be bought off the shelf. And so, we’ve had to take a hard look in the mirror and be honest with ourselves. I think we went into the project knowing what some of those components were – whether it was a price feed handler or messaging middleware, a lot of those lower level plumbing components.
And that has allowed us to concentrate on the fun stuff at TT and focus on building trading solutions on top of that. That allows us to focus on accessibility and build things like mobile applications and build more ways for our customers to access the markets, and access our software. And most importantly, it gives us a platform that we can iterate and innovate and make changes, especially in an industry like this which changes from week to week. And having a platform on which we can be nimble is probably most important.
Q: You designed the Algo Design Lab technology. How is that technology working for customers and what is its utility for TT going forward?
A: It’s working really well. It’s our fastest growing product and the adoption rate hasn’t slowed. Upfront was the education piece, which we had to go through before firms felt comfortable turning on that type of technology. But now that we have the upfront education piece as well as a more robust in-house training program for firms, we are seeing more FCMs or large buy-side firms getting comfortable with the technology. As soon as they do that, you see the flood gates open.
One of the keys to its growth has been our online forum for ADL, which is one of our most active. There is a lot of community involvement, where users are answering each other’s questions.
Going forward, it’s one of the automated tools TT will continue to build. In 2014, you’ll see some more flexible way to use ADL. And as it pertains to our platform rebuild, using ADL and accessing it will become much simpler, even if they are not customers. Even if it’s someone who wants to see what this world of visual programing and low latency trading is all about. There’s more to come on that.
Q: The industry has been struggling in the wake of the financial crisis, MF Global and poor interest rate markets. ISVs have also been hit hard. How is TT positioned going forward?
A: We’re well positioned. We’ve got really great relationships with the banks and the global FCM community. Obviously, with the release of TT Multi-broker last year, we’ve been making significant in-roads in the buy-side area and have a strong prop trading base. From a distribution standpoint, with an improved way to build and distribute our software, that’s really going to allow us to grow our business. It will also allow us to explore and add additional asset classes. All of these things, which have been just off our “to do list” because of the cost of maintaining the platform we’d maintained for nearly 20 years, is now moving closer to the top of the list.
Building something new when you have a very ingrained and sticky product out there is tricky. We’re now building something new. And while this industry changes a lot, some things people do not like to change. So it’s going to be interesting and a challenge.
Q: When you look at the broader ISV space what does it look like?
A: Generally speaking, you’ve seen consolidation over the past several years and we’re going to continue to see that. I don’t think ISVs are making money hand-over-fist. And you’re seeing firms cutting back on technology spend in the larger banks and larger buy-side firms.
The place for growth is to expand horizontally – offering additional asset classes, offering access to markets that otherwise would be difficult. It’s changing the way we deliver software to our users. Roughly half of our users are in our own hosted environment. That is the future.
In terms of trends, I think you’ll see software as a service prevail in the long run.
We’ve made some great inroads on the fixed income offering and will continue to do so. But we’ve largely been considered a futures-only platform, so there is real opportunity for us. For example, we expanded connectivity to US cash treasuries such as eSpeed, BrokerTec and Eris last year. But beyond that, we’re looking at equities.
Q: TT has not been a big player in the M&A space, with the exception of Tickit Trading. Would you consider making an acquisition in the ISV arena?
A: I’ll never say never, if something complements our current product offering. But I can’t say there is anything big on the horizon or even things we’re looking at.
Q: Any plans for TT to go public in the future?
A: If I was sure that at the end of the day it was going to help us build a better product and platform for our end users, I wouldn’t take it off the table. That’s certainly something Harris would be intimately involved in. But nothing in the works.