Low Latency Private Lines Enable Operators Attract New Financial Customers

Low Latency Private Lines Enable Operators Attract New Financial Customers

At Mobile World Congress 2017 in Barcelona, Huawei presented its CloudOptiX low latency private line solution. The solution, coupled with transport software-defined networking (TSDN) and multi-service optical transport networking (MS-OTN), helps operators offer stable and millisecond latency private lines to their financial customers, such as banks and securities and futures firms.

The office and trading network connections of financial customers carry critical information, such as electronic transactions, market statistics, accounting, and documents, requiring secure, stable, and low latency private lines. Lower latency means faster trading, and faster trading means greater profit.

In the U.S., the volume of high frequency trading through low latency networks accounts for over 50% of the total trading volume, earning securities firms tens of billions of dollars each year. In the futures market, high frequency trading accounts for more than 30% of the total volume. In China, low latency networks and high frequency trading systems are also attracting investors looking to gain a competitive advantage in the industry. 

To meet market needs, Huawei has developed the innovative CloudOptiX solution, which combines MS-OTN and TSDN technology.

MS-OTN ensures stable and low latency

Having inherited Synchronous Digital Hierarchy (SDH) technology, the MS-OTN physical hard pipes ensure stable and low latency.

In the open system interconnection (OSI) model, layers closer to the physical transmission layer involve less complex processing and introduce less latency. OTN uses wavelength division multiplexing, which is a physical layer networking mechanism. Moreover, OTN devices have no statistical multiplexing, congestion, or jitter. Therefore, the latency of OTN is stable and close to the physical limit. 

Figure 1: 24-hour latency (in ms) between networks in Shanghai and Suzhou

As shown in Figure 1, OTN ensures stable and low latency up to two digits after the decimal point (in ms) regardless of whether the load is light or heavy. 

TSDN finds the lowest latency path

TSDN is the industry's latest and most popular network control technology. Huawei TSDN manages the resources of entire transport networks and selects service paths that have the lowest latency. 

The latency for light propagation in optical fibers is 5 ms/1,000 km. According to tests carried out by Huawei on the 700 km optical link between Shanghai and Suzhou, the latency of light propagation in optical fibers accounts for over 90% of network latency. Shortening the optical path for service traffic is therefore key to minimizing latency. 

Figure 2: Service path optimization through TSDN

As shown in Figure 2, to find the path of lowest latency, the TSDN controller manages and optimizes the latency in the entire network.

In brief, the CloudOptiX solution, which combines TSDN technology and MS-OTN, is a premium private line solution for the financial industry. It ensures high security, stable and low latency, and high quality, all of which are vital industry requirements. The solution also supports network slicing to create VPNs at the optical layer, minimizing latency and maximizing bandwidth and security. This will help both operators and customers gain a competitive advantage, and pave the way for greater service innovation and commercial success.