July 2006

In the fourth annual Waters Rankings, our readers pick the industry's best providers of tools and services.

The financial services industry would grind to a halt without the tireless efforts of those who design and build the technologies that sit on traders' desktops, provide connectivity, ensure compliance, execute trades, deliver data—the list goes on.

CIOs have their favorite compliance and outsourcing solutions. Traders have their favorite trading gear. Back-office technologists have their favorites, too.

BEST INSTITUTIONAL BROKERAGE
Goldman Is Golden

1st Goldman Sachs (23.5%)
2nd Lehman Brothers (9.6%)
3rd Citigroup (8.1%)

Not surprisingly, after winning Best Execution Provider in 2005, Goldman Sachs returned this year to win the Best Institutional Brokerage for 2006, beating out 17 other broker-dealers for the honor.

Goldman Sachs follows the simple business philosophy of knowing its customers and providing them with all the services and tools they need to thrive in an ever-changing market. The firm provides one of the broadest and deepest sets of offerings to institutional investors available on Wall Street.

One of the firm's popular offerings is its hallmark REDIPlus trading interface, which provides buy-side traders with easy access to pools of liquidity across North America, Europe and Asia for trading equities, options, exchange-traded futures and FX. It also provides real-time quotes, news, charts, and time and sales, as well as order management and position management capabilities, and real-time profit-and-loss tracking. Also gaining popularity among buy-side clients is the firm's Goldman Sachs Algorithmic Trading (GSAT) suite of pre-trade, real-time and post-trade analytics, which brings a systematic approach to trading by utilizing sophisticated techniques to minimize transaction costs in a complex trading environment.

Traders can access these capabilities via REDIPlus, a FIX-enabled order management system or directly from Goldman Sachs.

Electronic execution is just one of the many factors that have endeared Goldman Sachs to the buy side. It also excels in asset management, investment and merchant banking, private wealth management, global investment research and securities services.
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BEST SELL-SIDE CLEARING
JPM Gets the Glory

1st JPMorgan Securities (12.4%)
2nd Goldman Sachs (10.9%)
3rd Bear Stearns Global Clearing Services (10.1%)

The sell-side clearing provider contest was as close as it was last year, with two percentage points separating first place from third place. JPMorgan Securities, last year's third-place winner, came out on top this year with 12.4 percent of the votes.

Last year's winner, Bear Stearns, slipped to third with 10.1 percent. Goldman Sachs leapfrogged into second with 10.9 percent.

JPMorgan Securities is a top global US dollar treasury and commercial clearer, moving more than $2.33 trillion daily; and is the third-largest global euro clearer. The firm's US dollar operations process more than 200,000 transactions per day, 97 percent on a straight-through basis.

The Multibank Payment system offers single facility access to all banks, allowing wire transfers to a variety of payment destinations worldwide, via a number of funds transfer initiation services. Toward the end of last year, JPMorgan Securities announced that Rabobank, Holland's largest financial services provider, was slated to use the bank's US dollar cash and securities clearing services.

The firm offers clearing access and transaction management through its eServe for Global Clearing product, which includes facilities for sending and receiving text messages with client services personnel, as well as access to historical data and performance reports. Through its Infrastructure Solution product, JPMorgan offers an outsourced US dollar clearing platform, giving its clients access to its transaction processing, fund control, messaging, treasury management, customer service and disaster recovery.

Goldman Sachs Execution and Clearing, which took second place, did not appear in last year's top three. It was formed with the acquisition of Spear, Leeds and Kellogg LP in 2000—Goldman's record buyout at the time—and it now offers global execution and clearing through the REDIPlus platform. Coming in third, Bear Stearns Global Clearing Services provides clearing services to prime brokers and broker-dealers, as well as to hedge funds and independent investment advisors on the buy side.
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BEST INVESTOR SERVICES
JPMorgan Tops Investor Services

1st JPMorgan Worldwide Securities Services (29.5%)
2nd State Street (25.4%)
3rd Bank of New York (19.7%)

When it comes to serving the needs of institutional investors, JPMorgan Worldwide Securities Services (JPMWSS) leads the pack. Active in more than 80 markets, with $11.7 trillion in assets under management, and servicing $7 trillion in debt worldwide, JPMorgan Worldwide Securities Services leverages its massive scale to help clients optimize efficiency, mitigate risk and enhance revenues via the firm's custody, trust, securities clearance and investor services.

Created in April 2005, JPMWSS' offerings include: American depository receipts, broker-dealer services, clearance and collateral management, domestic and global custody, fund services, investment and liquidity solutions, outsourcing solutions, performance management, securities lending, settlement and clearing, and specialty trust services.

Since the beginning of the year, JPMWSS has won several major buy-side contracts. In February, the unit announced plans to acquire the middle- and back-office operations of Greenwich, Conn.-based Paloma Partners Management Company, a privately owned investment fund management group. This acquisition also marked the launch of the bank's alternative investment services business unit, which offers services for hedge funds, private equity funds, global derivatives and leveraged loans.

Cazenove Capital Management is also live with JPMorgan's global custody, fund administration and fiduciary solution. Cazenove chose JPMorgan as its main securities services provider for its £4 billion ($7.4 billion) in UK and Irish funds.

More recently, British asset manager Henderson Global Investors, which has £67.7 billion ($126.3 billion) in assets under management, announced that it would outsource the middle- and back-office services and employees for its 14 hedge funds representing $2 billion in assets to JPMorgan Hedge Fund Services (JPMHFS). Henderson has signed a multi-year contract for JPMHFS to provide daily operational services and fund administration for its hedge funds.
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BEST PORTFOLIO MANAGEMENT
Charles River Development Keeps its Crown

1st Charles River Development (26.1%)
2nd SunGard (18.7%)
3rd Advent Software/Eagle Investment Systems (8.2%)

Lightning can indeed strike twice, as the Waters readership voted Charles River Development the best portfolio management system provider for the second straight year.

The firm's Charles River Manager, which can be implemented as a stand-alone application or as part of the Charles River Investment Management System (Charles River IMS), aids asset managers in their investment decision-making process by consolidating all the necessary data, tools and connectivity to provide complete trade-cycle support from "what if" analysis, modeling, rebalancing, security swapping, cash forecasting, pre-trade compliance, gain/loss/income projections and tax impact analysis. These are just a few of Charles River Manager’s popular features for asset managers managing single or multiple portfolios.

In the second quarter of this year, Charles River Development announced that it would integrate Markit's credit pricing and reference entity data into Charles River IMS. The XML data feed, available in Version 8 of Charles River IMS, will initially include data such as Markit REDTM, iTraxx and Dow Jones CDX constituent data, credit curves and reference entity information.

Throughout the first half of this year, Charles River Development announced several contract wins for its Charles River Manager platform. In January, Japanese asset manager Daiwa SB Investments Ltd. selected Charles River Manager, as well as the firm’s trade, post-trade and compliance applications, to help manage its $31 billion in assets under management. Cape Town's Metropolitan Asset Manager also recently adopted Charles River Manager to help manage its assets, totaling $6 billion. On the other side of the Pacific, Charles River signed Melbourne asset manager Cooper Investors P/L.
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BEST SELL-SIDE OMS
SunGard Burns Rivals

1st SunGard (26%)
2nd Fidessa (18.9%)
3rd Lava Trading (18.1%)

It was a close fight in the sell-side order management system category this year, with first and third place separated by only 8 percent. In the end, SunGard finished on top with 26 percent of the vote, followed by Fidessa with 18.9 percent and Lava Trading with 18.1 percent.

SunGard's Brass sell-side equity OMS is used by 170 clients worldwide, offering fee-based trading, Nasdaq agency and market making, NYSE block, listed market making, and sector-based trading. This year, Janney Montgomery Scott LLC adopted the entire Brass suite, which offers direct market access and automatic indications of interest. AG Edwards signed on in late 2005. SunGard expanded the capabilities of Brass through a tie-up with Portware, a New York-based trading software provider, which saw a private label version of the trade management system, Portware Professional, included in the OMS

SunGard's victory may raise a few eyebrows in Europe, where the vendor has so far failed to recreate the popularity it maintains across the Atlantic. The Brass OMS system has lost support due to a lack of connections to European exchanges, and has suffered major client losses, such as Jeffries UK, which switched to Fidessa in October 2005.

SunGard has continued to cut back the presence of Brass staff in Europe, according to reports. In the US, Jeffries remains on Brass, and the platform is still the most commonly used in the US.

Royalblue's Fidessa, by contrast, continues to enjoy success in Europe, pushing out SunGard at Jeffries UK and moving in at Dutch merchant bank Kempen and Co., in place of a combined GL Trade and proprietary system.
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BEST BUY-SIDE OMS
Bloomberg Manages a Win

1st Bloomberg (27.1%)
2nd Charles River Development (26.5%)
3rd Reuters (11%)

Buy-side providers dominated the 2005 order management system award, with Charles River Development leading the pack, attracting almost twice the number of votes of its nearest competitor, Bloomberg. This year, the category has been split, but the names in the buy-side category remain the same. The order, however, has changed. Bloomberg took the lead with 27.1 percent of the vote, while Charles River came in a close second with 26.5 percent, and Reuters came third with 11 percent.

Bloomberg's order management offering consists of four products. The Portfolio Order Management System (POMS) is a front-end asset management tool with pre-trade, trade and post-trade analytics and compliance functions, including an array of global compliance templates. A version of POMS for alternative investments, POMS-AI, is also available and it emphasizes analysis over execution. Bloomberg Trade and Order Management System is a comprehensive trading system that incorporates pricing and offering engines, liquidity platforms, auto-execution, position management, and compliance modules for broker-dealers. A sell-side OMS for equities, SSEOMS, completes the set.

Bloomberg's reputation as an OMS provider has vaulted the vendor over Charles River Development, which led by a significant margin in the 2005 OMS category. This may reflect a greater affinity for the company on the buy side than on the sell side. Bloomberg's gain appears to be to the detriment of Reuters, which has lost favor. In 2005, Reuters was less than half of a percentage point behind Bloomberg.

A significant increase in Bloomberg's global fixed-income clients may have narrowed the gap between Bloomberg and Charles River, which has continued to win clients, including the start-up hedge fund ClariVest; Metropolitan Asset Managers, a South African company; and White Mountains. The Charles River Investment Management System (IMS) remains popular due to its connectivity with more than 300 brokers, ECNs and ATS platforms, and the consequent benefits to trade execution.
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BEST EXECUTION MANAGEMENT
Bloomberg Rules the Roost

1st Bloomberg (37.4%)
2nd Lava Trading (18.3%)
3rd TradingScreen (8.4%)

The readers of Waters have spoken: When it comes to execution management, Bloomberg is the best. By winning this award, Bloomberg becomes only the second vendor in rankings history to win a hat trick, with IBM being the first in 2004. Bloomberg received more than twice the votes of second-place winner Lava Trading and four times the votes of third-place finisher TradingScreen.

Launched in the beginning of 2005, Bloomberg Execution Management System (EMS) provides Bloomberg users with a multi-broker global equity and fixed-income trading tool that combines data, trade-blotter analytics and extensive order routing options free for all Bloomberg subscribers.

Buy-side traders can create their own custom trading blotters as well as use the wealth of real-time pre-trade, working and post-trade analytics that can be custom designed, or rely on the vast library of pre-defined benchmarks. The platform also provides a real-time sorting and filtering option that enables traders to identify orders that need special handling versus the selected benchmarks. Orders can be routed to more than 1,000 broker-dealer destinations globally that are on Bloomberg's Global Order Routing network, or to other third-party broker-dealers' algorithmic trading offerings or block trading desks.

By offering a no-cost solution that ties data, analytics, and execution routing together into one ubiquitous platform, Bloomberg has won the hearts of asset managers large and small.
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BEST VISUALIZATION
Fractal: Edge Wins a Colorful Race

1st Fractal:Edge (37%)
2nd Panopticon (15.4%)
3rd Primena (12.8%)

For traders, asset managers and risk analysts, information overload is a very real concern, as data volumes continue to grow. Fractal:Edge's desktop-based Fractal Intelligence gives end-users a top-level overview of their data while providing intermediate summaries of the underlying data, which can display previously hidden interrelationships.

The platform can show more than 1,000 items in a single screen and provide access to several million items with just a few clicks of the mouse. For enterprise distribution, the vendor also offers Fractal:Server, which provides the capabilities of its desktop application via Web-based applications and services.

In April, Fractal:Edge introduced version 2.1 of its client- and server-based platforms. The key feature in the latest release is the new DHTML Web client that works alongside the platform's existing Web client stack, which includes ActiveX and Mozilla plug-ins. The new capability lets programmers deliver interactive fractal maps to the Web and intranet users whose firewall or browser permissions prevent them from installing plug-ins. By using the standard HTML image map, Javascript and style sheet functionality, the DHTML Web Client offers an alternative that will work on almost any Web browser and operating system platform, from Internet Explorer running on Windows, to Firefox or Opera running on Mac, or Linux.

Earlier this year, Fratal:Edge and HedgeFund.net joined forces to provide the hedge fund industry with a new visualization tool, which would allow its traders to identify potential hedge fund opportunities involving the more than 5,300 hedge funds and commodity traders that report to HedgeFund.net on a monthly basis. The HFN Fractal Map allows traders to locate funds in HFN's database that are generating significant returns through the use of visual cues to spotlight well-performing investment regions, hedge fund strategies and individual funds. The platform helps identify points of interest within the hedge fund industry and lets investors explore these areas easily and efficiently.

One major US bank that implemented the platform in its London office saw improved visibility of its position data across its trading floor.
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BEST MARKET DATA
Bloomberg's Data Dominates

1st Bloomberg (43.5%)
2nd Reuters (32.6%)
3rd Thomson Financial (9.4%)

Unquestionably, it's been a good year for market data providers, as data revenues from Bloomberg, Reuters and Thomson swelled during 2005. The overall data market grew to an estimated $11 billion. But it's been an especially good year for Bloomberg.

The vendor's dominance in this category slipped slightly in 2006 over 2005, but it still finished out in front with 43.5 percent of the vote. Bloomberg surprised some market observers in April when it acquired BrainPower in a €1.88 ($2.37) per-share offer. The small Swiss company specializes in data management systems, but some analysts questioned why Bloomberg had not followed its usual route of organically growing its product line.

Throughout 2005 and into 2006, Bloomberg focused a lot of attention on its datafeed product, PhatPipe, which debuted in July last year. It has since been renamed B-Pipe, with a full release scheduled for this summer. The unveiling of the feed marks a change of strategy for Bloomberg, which has traditionally dealt only with end users. With its new system in place, the company is going to have to deal directly with market data managers, analysts say. Reuters has said that it will unveil a feed handler for B-Pipe as soon as the product is rolled out.

Bloomberg also announced that it would deviate from its proprietary Bloomberg Industry Classification System (BICS) benchmark for securities with the adoption of the Global Industry Classification Standard from Standard & Poor's and MSCI and the Industry Classification Benchmark (ICB) from the Dow Jones and the FTSE. The switch to ICB should improve efficiency in communications between the buy side and the sell side, and could see Bloomberg take a lead over Reuters, which does not use the standard.

Reuters released an update to its own flagship product, the Reuters Market Data System (RMDS), in April, introducing a new data format, the Open Message Model (OMM), which supports higher update and data processing rates.
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BEST ENTERPRISE DATA MANAGEMENT
IBM Knows EDM

1st IBM (23.7%)
2nd SunGard Data Management Systems (22.5%)
3rd Asset Control (15.3%)

A report from consultancy Aite Group predicts that spending on enterprise data management (EDM) will grow to more than $2 billion by 2009, a forecast that is likely to please IBM, which narrowly beat SunGard Data Management Systems (SDMS) in the EDM category, achieving 23.7 percent of the vote. Last year's leader, SDMS, came in at just over 1 percent behind IBM this year, with 22.5 percent of the vote, while Asset Control garnered 15.3 percent of the vote.

In 2005, SunGard, IBM and GoldenSource established the EDM Council, whose goal is to promote the use of EDM to the financial services industry. IBM's Enterprise Data Management offering assists companies in synchronizing data and supply chain operations on their existing infrastructure. In the fall of 2005, the company acquired DWL Systems, a data integration middleware provider. IBM's information management business has made nine acquisitions to strengthen its overall data services since 2001, including a $1.1 billion deal for Ascential Software, a data integration company.

Second-placed SDMS was formed in April 2004, when SunGard acquired Fame Information Systems, and since then the company has become one of the leading providers of EDM solutions. The SunGard solution sources data from more than 100 third-party locations, and boasts a high level of data quality.

Asset Control is a centralized data management provider that has seen its efforts partially eclipsed by the increasing prominence of IBM in this market. Two years ago, Asset Control came second in this category, but now it seems likely to be an area dominated by the big players, SunGard and IBM.
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BEST STREAMING DATA MANAGEMENT
SunGard Rises Over the Rest

1st SunGard (26.6%)
2nd Vhayu Technologies (21.1%)
3rd Progress Software (11.9%)

Handling streaming data is the lifeblood of any financial services organization. When Wall Street looks for a proven vendor to perform a task, it turns to SunGard and its wide array of offerings.

SunGard meets the data management challenge head-on with its three offerings for data management: PowerData offers management of real-time, delayed and end-of-day exchange and market data feeds; Fame provides a solution for storing and managing high-volume time series data; and referencePoint supplies an enterprise data management solution to solve the problems associated with managing reference and market data across the enterprise.

During the second quarter of this year, Banc of America Securities announced that it had selected referencePoint Managed Data to collect, cleanse, format, enrich and store pricing reference data to distribute to a variety of its downstream trade order management, risk management and back-office processing systems. About the same time, SunGard also announced that it had expanded Fame's capabilities by integrating it with Insightful's statistical data analysis and predictive analytics platform, S-Plus, via the new Fame S+Connector. The integration should improve the speed and ease of optimizing portfolios, assessing risk exposure, conducting alpha tests, and identifying market opportunities. When it comes to streaming data management, the industry follows SunGard.
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BEST MARKET DATA ORIGINATOR
Nasdaq's Data Is Divine

1st Nasdaq Stock Market (20.3%)
2nd Chicago Mercantile Exchange (18.9%)
3rd New York Stock Exchange (18.2%)

Life is anything but boring at the Nasdaq Stock Market. Its surprise grab of London Stock Exchange shares caused a global stir and the industry is holding its breath in anticipation of what's to come in the exchanges space. But courting the LSE is not the only thing keeping Nasdaq busy. It is in the midst of consolidating the Brut ECN and Nasdaq Market Center matching engines onto the Inet ECN platform, which is expected to go live by the end of July. Yet somehow, Nasdaq still finds time to innovate.

Earlier this year, Nasdaq announced that it will be generating a new data feed, dubbed Nasdaq Market Velocity, that detects the level of market activity in Nasdaq stocks prior to the activity's appearance in price or volume data. In other words, it plans to provide traders with electronic versions of market noise that floor traders have been using to their advantage since the inception of the trading floor. Although still in development, the new data feed is expected to become available later this year and will be initially distributed via vendors.

Other innovative product offerings include Nasdaq Market Forces, which indicates market direction as a number of shares or percentage of shares in buy versus sell orders; and Nasdaq Competitive VWAP Benchmark, which is a custom query-response system that complements institutional investors' use of the volume weighted average price (VWAP) benchmark.
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BEST ANTI-MONEY LAUNDERING SOLUTION
SAS Steals First Rivals

1st SAS (38.1%)
2nd Mantas (31%)
3rd SearchSpace (8.3%)

Anti-money laundering (AML) actions have become more prominent since the instigation of the USA Patriot Act and the Third Money Laundering Directive issued by the European Union. This year, Waters readers picked SAS as the leading provider of AML solutions. SAS took 38.1 percent of the poll, with last year's winner Mantas coming in second with 31 percent. SearchSpace was third, attracting 8.3 percent of the vote.

SAS creates bespoke, risk-based solutions that allow financial institutions to monitor customer behavior to prevent money laundering and funding of criminal activities. The company's products work alongside rules-based monitoring systems to address willful blindness by identifying high-risk entities, whether or not a suspect transaction has occurred. SAS also provides hosted solutions for smaller enterprises. Major customers include the Bank of America.

Mantas, which won the award in 2005 and was narrowly defeated in 2006, added several new products to its line, including operational risk, fraud detection and client assurance tools late last year. Its anti-money laundering system detects "behaviors of interest" transactions by suspect parties or those in high-risk areas. The system also tracks secret relationships between entities and accounts, and monitors other behavioral parameters that suggest illegal activity.
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BEST MESSAGING COMPLIANCE
Symantec Clinches the Title

1st Symantec (29.1%)
2nd EMC (24.4%)
3rd Orchestria (19.8%)

To quote the great William Shakespeare: "What is in a name?"

The ink is barely dry on the newly branded Symantec IM Manager and the Symantec Real-Time Threat Protection System brands, but Waters readers realize that these are the same platforms that Symantec acquired when it completed its acquisition of IMlogic in February of this year.

Symantec's granular policy control for text messaging, file transfers, audio, video and voice over Internet protocol (VoIP) as well as application sharing and other communication capabilities have won Symantec a revered space in the compliance toolbox.

Aside from keeping the regulators at bay, the platform protects the enterprise network from the growing threats of instant messaging viruses, worms and other types of malware using behavior-based threat protection and file-based anti-virus scanning.

The platform offers leading support for all major public instant messaging networks and enterprise platforms, including AOL Instant Messenger, GoogleTalk, MSN Messenger, and Yahoo! Messenger. It also supports enterprise instant messaging offerings like Microsoft Live Communications Server, IBM/Lotus Sametime, and Jabber.

Through comprehensive control of internal and external instant messaging usage, including internal message routing, regular expression pattern matching, and real-time user monitoring, organizations are protected against the loss of sensitive information and intellectual property over instant messaging.

Symantec's platform also provides fully integrated management and compliance archiving for corporate policy enforcement, human resources data, legal risk management, and regulatory compliance requirements, including those mandated by the US Securities and Exchange Commission (SEC) and the National Association of Securities Dealers (NASD). It also aids in compliance with such mandates as Sarbanes-Oxley, and Gramm-Leach-Bliley.
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BEST OP-RISK COMPLIANCE
Algorithmics Measures Up

1st Algorithmics (57.6%)
2nd SAS (16.3%)
3rd MethodWare (9.8%)

After continually coming in at second place in this category, Algorithmics is finally victorious, winning the prize for its Algo OpVantage platform in the only landslide victory in this year's Waters Rankings.

Designed to reduce the cost of compliance, facilitate improved capital management and enhance a firm's reputation, the end-to-end platform identifies, collects, manages and measures qualitative and quantitative operational risk. The platform provides a one-stop shop for key features such as external loss data, internal event/loss tracking, self-assessment, key risk indicator definitions and tracking, frequency and severity estimation, exposure calculation, scenario analysis, capital calculation and internal regulatory reporting. Once firms develop their action plans to address their operational risk issues, the platform helps them monitor the progress of those plans.

Knowing that a solution is only as good as the intelligence behind it, Algorithmics employs industry thought leaders, risk practitioners and academic specialists that bring expertise gleaned from working with more than 70 operational risk clients from around the world to support Algo OpVantage.
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BEST TURRET PROVIDER
IPC Wins a Turret 'Threepeat'

1st IPC Information Systems (42.9%)
2nd BT Trading Systems (33%)
3rd Siemens (16.1%)

Talk about a dynasty. For the third year running, IPC Information Systems has been voted top turret provider, attracting 42.9 percent of the vote. Likewise, BT Trading Systems and Siemens once again fill up the second and third spots.

IPC has continued to benefit from its strong position in voice over Internet protocol (VoIP), and the company recently revealed that 38 percent of its total installations now use IP technology. Last October, IPC completed a major rollout at Wachovia in New York, bringing its total number of IQMX trading positions to 40,000. The company says that over 85 percent of its turret shipments this year included IP products.

In March, IPC launched IQ/MAX, the successor to its popular IQMX desktop. IPC has redesigned its user interface from the ground up, using the visual layouts of popular sources of information as a model. The console has been restyled into a smaller, ergonomic design, and incorporates a thin film transistor (TFT) screen. The product is packaged in individual units, enabling rapid upgrades and repairs. Deskshare, a new collaborative tool, enables traders to share some functions of their desktop and a recall function records and replays the last 20 seconds of any speaker channel traffic.

BT Trading Systems, runner up for three consecutive years, has moved toward VoIP, with an IP version of its ITS Trading Platform now on the market.
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BEST NETWORK PROVIDER
BT Radianz Makes the Connection

1st BT Radianz (45.3%)
2nd Swift (28%)
3rd Transaction Network Services (12.7%)

For the third year in a row, BT Radianz wins this category. Formed in April 2005 as part of a wider deal between Reuters and the former British Telecom and re-branded in June of the same year, BT Radianz has continued to attract a high degree of support from the Waters readership, picking up 45.5 percent of the total vote. Swift and Transaction Network Services came in second and third, with 28 percent and 12.7 percent of the vote, respectively.

BT Radianz has not been resting on its laurels since last year, however. It has leveraged the global operations possessed by the BT Group to offer its Extended Reach product, which gives institutions access to emerging markets without the need for private lines. It has also launched its hosted service Proximity Solution. The new service provides trading firms with low-latency connectivity to data sources and execution centers, debuted in Europe in January after success in North America. At the time, BT Radianz officials said that an expansion of the system to Asia was in the pipeline, with the company hoping to go live in the second half of this year. This move will be aided by the parent group's existing infrastructure in the region.

BT Radianz has signed up major clients over the past 12 months, including a deal with Deutsche Bank, which allows the bank's customers to host exchange access hardware in the network provider's data centers. Barclays Capital took a similar solution in April, to solve message latency issues experienced by its buy-side clients. The bank decided to co-locate the hedge fund's servers to a BT Radianz-managed facility and connect them to local exchanges using Proximity Solution.
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BEST TELECOMMUNICATIONS PROVIDER
Verizon Vaults Ahead

1st Verizon (28.3%)
2nd AT&T (26%)
3rd BT (15.7%)

Financial institutions are acutely aware of the importance of telecommunications. The battle for the top spot in this space was close, resulting in a neck-and-neck race for first place between Verizon and second place finisher AT&T.

The crucial factors that sent Verizon to the winners' circle include the recent creation of the Business Resilience Solutions from the Verizon Business unit, which was recently formed when Verizon completed its merger with MCI earlier this year. The new portfolio of offerings includes resilient voice and data networking, high-availability and network-embedded applications, new storage offerings and professional services capabilities.

Other services introduced to the European market include the recently launched Verizon IP Trunking, which is designed for organizations that have already deployed an IP PBX and want to connect to the Verizon VoIP network. The new service eliminates the need to purchase and manage multiple locations by letting firms connect their IP PBX to the public voice network and their enterprise data network using a single IP connection. The new service is currently available for customer trials in the US, the UK, France, Germany, the Netherlands and Belgium. Verizon expects to expand its European footprint in the second half of this year to include Ireland, Italy, Luxembourg, Norway and Spain.

Initially, the service will be available on the Cisco Call Manager 4.1.3, but additional platforms, such as Call Manager Express and Avaya Communication Manager 3, will follow, sometime in the third quarter of this year.
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BEST GRID PROVIDER
IBM Nets Best Grid Award

1st IBM (48.2%)
2nd DataSynapse (21.2%)
3rd Platform Computing (15.3%)

Over the past year, grid computing has been increasingly touted as a viable solution for the power demands of complex structured products and derivatives. Once a luxury item, analysts have predicted that most major investment banks will implement virtualization programs to reduce their run-times on analytics and take advantage of advances in business continuity.

Several major vendors have thrown their hats into the grid-computing ring, and Hewlett Packard, IBM, Sun Microsystems and Intel came together in early 2005 to form a trade association, the Globus Consortium, for the nascent industry. In 2006, the foremost of these was IBM, the winner in this category. IBM captured 48.2 percent of the vote. DataSynapse came in second with 21.2 percent, while Platform Computing finished in third place with 15.3 percent.

IBM started its grid computing push back in 2003 when it announced that it would be targeting nine sectors, including the securities industry, and partnering with software providers such as DataSynapse. Since then, Big Blue has emerged as a leading supplier to financial services firms, counting Wachovia, Morgan Stanley and Charles Schwab among its clients.

IBM has continued to improve its virtualization systems by adding data caching to its WebSphere solution and launching utility computing services.
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BEST SERVER VIRTUALIZATION PROVIDER
VMware Is the Real Deal

1st VMware (42.2%)
2nd Orchestrator (18.1%)
3rd Enigmatec/Gigaspaces (14.5%)

The server virtualization category is new to the Waters Rankings. It was included to reflect the application's growing importance in the financial community. Virtualization allows the management of multiple server resources while masking the details of distinct servers, increasing efficiency and building in scalability. California-based VMware led the pack in this year's rankings by grabbing 42.2 percent of the vote, ahead of Orchestrator, which earned 18.1 percent of the vote.

VMware has been operating in the server market since 2001 and has a broad base of institutional clients, including Merrill Lynch, Commerzbank, SEB and Russell Investment Group.

In February, VMware released a beta version of its latest server virtualization application for Linux and Windows machines. It is available as a free download in order to attract entry-level customers to its technology and give it a competitive advantage over others looking to exploit the market for x86 software. The application's predecessor, GSX Server, had sold for $1,400 for dual-core servers. VMware claims that its server product is the first commercially available solution that supports 64-bit virtual machines and Intel's virtualization-optimized hardware platform, Intel Virtualization.
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BEST BUSINESS PROCESS MANAGEMENT
Tibco Stays on Top Rivals

1st Tibco Software (29.6%)
2nd IBM (25.9%)
3rd BEA Systems (12%)

The results in this category match the results of the previous two years, with Tibco Software narrowly beating IBM to capture first place and BEA Systems taking the third slot. This year, Tibco amassed 29.6 percent of the vote, with IBM and BEA taking 25.9 percent and 12 percent, respectively.

The Tibco Staffware Process Suite, which was born out of the 2004 acquisition of BPM provider Staffware, has proved a popular solution within financial services and in the wider administrative community. The software enables managers to observe process performance and benchmark results against historical records, and encourages collaboration with IT departments by creating maps based on business goals, which can then be translated into technology solutions. The system includes components for process modeling and analytics, and rules and execution engines, and is compatible with most leading IT infrastructure standards.

In February, Tibco consolidated its service oriented architecture (SOA) product, BusinessWorks, with its BPM suite, hoping that the combined solution would offer more value to securities firms by combining risk management, exception handling and compliance tasks with access to reference data and other tools via an SOA. The links between BusinessWorks and Staffware Process Suite allow users to map "libraries" of business processes alongside services.

IBM, which earned the second-place spot in this year's rankings, is also marketing the link between BPM and SOA.
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BEST CONSULTANCY
McKinsey & Co. Has the Answer

1st McKinsey & Co. (15.5%)
2nd IBM Global Business Services (13.2%)
3rd Accenture (12.4%)

In one of the closest finishes this year, McKinsey & Co. walks away with the top award in this category.

Known around the world, McKinsey blends deep knowledge of the wholesale and retail banking, asset management and payments world with expertise in managing IT operations, infrastructure, governance, architecture and cost.

In the wholesale banking space, McKinsey has worked with leading markets, and investment and corporate banks to develop overall strategies for the wholesale business and for specific products, client segments or geographies.

The firm helps address organizational issues that include "people and culture" and institutional processes; and performance improvement and mergers and alliance issues, such as identifying, negotiating and implementing mergers, acquisitions, joint ventures and alliances. With support from its specialist practices, McKinsey also undertakes a wide range of functional issues for clients, including information technology, risk management, branding and customer relationship management.

McKinsey helps asset managers grow into new markets and market segments as well as to manufacture and distribute distinctive alpha propositions to their clients.

The consultancy also supports client operations in the design and implementation of superior processes, and in the front and back office, covering research, portfolio management, risk management, operations and distribution. It also aids in the development of organizational structures and processes to support the alpha factory and distribution businesses, and to attract and retain talent.

When firms need advice they can trust, they call McKinsey & Co.

It was exciting to see an ambitious if relatively smaller player do well on this year's list. Though it didn't make the top three, MA Partners has a bright future, according to our voters.
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BEST OUTSOURCING PROVIDER
The World Partners with Accenture

1st Accenture (19.5%)
2nd IBM Business Consulting Services (17.1%)
3rd EDS/Infosys Technologies (12.2%)

Outsourcing has become a fact of life for most financial services organizations. When the Waters readers think of outsourcing, Accenture is their preferred partner.

The firm's expertise in business process outsourcing, global corporate actions processing, managing market data, securities operations and other managed services for the capital markets, kept it one step ahead of second-place winner IBM Business Consulting Services and tied third-place winners EDS and Infosys Technologies.

Among its contract wins over the past year, Accenture inked a deal with China Minsheng Banking Corp (CMBC) to help the commercial mainland bank implement a core banking solution along with SAP. The project entails setting up a banking system infrastructure based on service-oriented architecture that will enable the bank to accelerate its development and launch of new products as well as provide it with strong technical support. The solution, which includes deposit and loans, treasury management and general ledger processing functionalities, and a front-end solution for tellers, is designed to enable CMBC to manage all transactions through one integrated system. The software will help CMBC streamline its operations, better manage costs, increase profitability and reduce operational risk.

With the abilities to handle these sorts of challenges, it's easy to see why Accenture rose to the top.
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