Cowen

Investment Firm Banks on Open Source for Highest Shareholder Returns.

Highlights

Cowen Group Inc. is a leading investment bank headquartered in New York City. Frustrated with the high cost and inflexibility of proprietary software solutions, Daniel Flax, Cowen Group Inc. CIO, developed a new way to increase cost efficiencies, strengthen competitive advantage, and provide greatest return to shareholders. His “theme” for every IT project at Cowen requires that two of three key elements (mobility, Software-as-a-Service offerings, and open source software) be part of the plan. Because it met all three requirement themes, Flax chose Ingres Database — the leading open source database that helps organizations develop and manage business-critical applications at an affordable cost — to serve as the backbone for Cowen’s Program Trading Capabilities project. Flax expects Ingres Database to perform as well as a proprietary database at 1/10th the cost.

Challenge

For Daniel Flax, traditional IT cost models couldn’t deliver the cost efficiencies and ROI that he wanted to show the shareholders. Proprietary vendor lock-ins and all the fees associated with them (including annual licensing fees, ever-escalating support and training costs, and continuous capital expenditures) were costing his company a fortune and had the potential to weaken competitive advantage. Determined to reduce operational and capital expenditures without sacrificing quality, performance, or investment in legacy products, Flax sought opportunities to build the most cost effective platform for the business. As a result, his team identified three strategic elements, two of which must be present in every IT project going forward:

1. Mobility: Flax and team value highly portable solutions that move easily from one platform to another.
2. Software as a Service or “SaaS” applications: Cowen and Company can significantly reduce Capex as well as maintenance costs by using subscription-based applications offered over the Internet.
3. Commercial open source software: Flax prefers proven open source software that is freely distributed with its source code because it is much lower cost than proprietary software and easily modified to meet unique business needs.

One of the first projects to address this mandate is the Program Trading Capabilities project that provides a self-service, online portal through which trading customers can access financial Information.

Solution

Meeting all three of Flax’s strategic requirements, Ingres Database was chosen to serve as the backbone of the Program Trading Capabilities project. According to Flax, “We are excited to initiate the Program Trading Capabilities project with Ingres, which has been proven time and again to perform under pressure in mission-critical environments. During our selection, we determined that no other database — proprietary or open sourc — would give us the reliability that Ingres provides. As an open source solution, Ingres Database will deliver tremendous cost savings and an ROI that we can immediately show the business.” These cost savings can be attributed, in part, to the fact that Ingres Database:

• Requires zero upfront licensing fees
• Can be customized quickly and easily
• Provides freedom from vendor lock-ins

Less obvious, the Cowen Group chose Ingres in order to reap the budget-saving benefits of compatibility with and similarity to the legacy products that are currently in use. “Neither our technical or business users will require much training to hit the ground running,” said Flax. “And if we do need support or training, we can get it on a pay-as-we-go basis. This alone presents huge cost savings because we don’t need to subscribe to expensive annual support and training programs.”

Results

The New Economics of IT, pioneered by Ingres, provides a strong foundation on which Flax can build his group’s new software business model. “Ingres has enabled us to move away from budget-busting vendor lock-ins and all the associated costs,” said Flax. By choosing a commercial open source solution, the Cowen Group will not have to pay for novation fees, multicore pricing, site license renewal fees, or escalating support costs. Instead, they will be able to re-direct significant portions of the budget to fund innovative IT projects that will strengthen competitive advantage, support long-term growth, and deliver favorable results to shareholders. “We think Ingres is better than sliced bread,” said Flax. “We expect Ingres Database to provide equal performance at 1/10th the price of the proprietary database solutions.”