Nymex Trades on Optical

The New York Mercantile Exchange Inc. has finished putting into place business-continuity measures prompted by the 9/11 attacks on the U.S., having installed a fully redundant backup trading floor outside of Manhattan that replicates data over a 100-Gbit/s DWDM link (see Nymex Picks MFN's Optical Service).

The secondary site, which comprises about 30,000 square feet of space, was brought online at the end of March 2003. It's somewhere on Long Island (exchange officials would not disclose the exact location), designed to spring into action instantly if anything should disable the primary trading floors at Nymex's headquarters in the World Financial Center in lower Manhattan.

"It's really just about making sure that access to the global energy and metals markets are available in any eventuality," says Nymex spokesman David Garland.

Officials estimate the redundant trading floor -- the construction of which began in April 2002 -- cost about $12 million to build and will require another $1 million annually to keep operational.

The impetus for the project was the terrorist attacks of Sept. 11, 2001, which destroyed the World Trade Center towers and crippled much of the financial industry for several days. The New York Mercantile Exchange was forced to suspend trading for four days after 9/11 because its backup facility -- located a few blocks away from its primary site -- was without power, telecommunications, and other services.In addition, three federal agencies recently issued new regulations, also instituted in the wake of 9/11, requiring organizations that are critical to the functioning of the U.S. financial system to put into place exactly this kind of business-continuity plan (see Feds Set DR Regulations).

While it's not surprising that Nymex has put such comprehensive -- and costly -- disaster recovery measures into place, what is unusual is that the exchange is now revealing some details about its implementation. Normally, such information is closely guarded for security or competitive reasons.

Nymex is using a managed DWDM service provided by Metromedia Fiber Network Inc.(MFN) (Nasdaq: MFNX), a competitive local exchange carrier, and as part of that network it's using ADVA AG Optical Networking's (Frankfurt: ADV) FSP3000 equipment.

The ring-based DWDM network connects SAN and LAN traffic among five different sites operated by the exchange: its primary site in Manhattan; the backup facility on Long Island; and three other sites, in Brooklyn, uptown Manhattan, and Jersey City, N.J.

Still, exchange officials are withholding many other details. For example, Nymex wouldn't say which vendor or vendors have provided its SAN equipment or storage systems. But it confirms that it is using Escon, a storage protocol developed by IBM Corp. (NYSE: IBM) for mainframe traffic.Nor would Nymex say how far, exactly, the sites are apart from each other, except that the DWDM network ring is "in excess of 100 kilometers." The issue of distance between primary and backup sites became a bit of a hot potato as U.S. regulators formulated their guidelines for the industry. Many banks and other firms complained that fully replicating data synchronously -- which guarantees no data will be lost -- over 200 miles or even 300 miles as the agencies initially suggested would be cost-prohibitive or simply technically infeasible. In their final regulations, the agencies yielded on this point and chose to not specify distance requirements (see Post-9/11 Plan Meets Resistance).

For MFN and ADVA, the Nymex business continuity deployment is concrete proof that optical networking provides the only way to replicate large amounts of data across metropolitan-area distances.

"It's a real example of the scaleability and flexibility of optical networks," says Brian McCann, chief marketing and strategy officer for ADVA. "Now that they've interconnected the LANs and the storage, it's as if they're just a floor away in the same building."

Todd Spangler, US Editor, Byte and Switch