Fujitsu to build new Tokyo Stock Exchange system

Fujitsu Ltd. has beaten out four other bidders to win the contract to build the Tokyo Stock Exchange Inc.'s next-generation trading system, the market operator said Tuesday.

The Tokyo Stock Exchange has budgeted ¥30 billion ($254 million) for the new system, which is expected to be in place in late 2009.

The decision amounts to a strong vote of confidence in Fujitsu's computer engineering expertise. A string of embarrassing and high-profile problems and failures with the current Fujitsu-built computer pushed the exchange to start shopping for a new system earlier this year.

The problems began on Nov. 1, 2005, when stock and bond trading was scrapped for the entire morning session because of a system glitch. It was traced to the incorrect patching of a file in mid-October during an upgrade to the trading system. The file had to be patched because it contained a bug, but Fujitsu provided incorrect instructions as to how to apply the patch. The problem was found later because it was related to a monthly data compression run that occurred on Oct. 31.

Fujitsu accepted responsibility for the error, and several high-profile members of its staff, including its president, Hiroaki Kurokawa, took pay cuts.

"Fujitsu declared that for this new system, they would like to make a very big effort," said Mitsuo Miwa, a spokesman at Tokyo Stock Exchange. "They said it would be a very big project for Fujitsu and be directly supervised by the CEO."

Plans for the new computer were first laid in March 2006, as the company scrambled to shore up its current trading system in the wake of problems that extended past the November software glitch to culminate in the unprecedented early close of trading on Jan. 18 because a system meltdown was feared.

Within a week of the early closure, the exchange named its first-ever chief information officer and a preliminary three-year plan followed with a basic vision for a new IT system.

The exchange began talking to five potential suppliers in August and a month later followed up with a details request for proposals. The bids were evaluated according to responses given to several questions, some of which were not fully answered by all bidders, said Miwa.

Precise planning will now begin, and more details of the system architecture and hardware design should be known in mid-2007.

Fujitsu said it was pleased to have received the order. In addition to the current system in Tokyo, Fujitsu servers are also used in the Osaka Stock Exchange and the Chicago Board Options Exchange.

Copyright © 2006 IDG Communications, Inc.

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