In the first category most of the buy-side OMS vendors tried this strategy. They pretty much all did not hit the heights to which they aspired. Why? They had a number of severe problems:
Let’s look at these issues in turn, starting with the technical platform. In order to maintain “state” the majority of buy-side OMS platforms had a single threaded main process that processed every request to update a position. This single thread would rapidly become the rate-determining-step in performance of the system. Once connected to brokers and receiving regular order executions this thread would take on more load. Change the game to include FIX connected algorithmic trading with a vast step up in execution volume and it’s clear that a single thread would become overloaded. Without extensive, very expensive redesign this kills the system. Since buy-side OMS vendors are not noted for a desire to engage in expensive, extensive redesign there were workarounds and limitations built into the systems.
An example of an OMS vendor acquiring an EMS was the spin-out from Convergex of Eze and Real Tick alongside the acquisition of Tradar. The covers a stack of
- Portfolio Management - Tradar
- Order Management - Eze
- Execution Management - Real Tick