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Data Centre Titans: Revolutionising Financial Industry Computing with James Lupton, CTO of Blackcore Technologies

Mon 18 Dec 2023

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In the sixth edition of Data Centre Titans, we hear from James Lupton, the Chief Technology Officer (CTO) of Blackcore Technologies.

Lupton shares his insights on the challenges in high-frequency trading, the future of data centres, and offers advice for those starting in the industry.

He brings a unique perspective on the role of a CTO, emphasising the importance of balancing expert advice with confident decision-making.

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What is your role and how did you get to your current position?

I was promoted to CTO in July 2023, after 8 years of working at Blackcore. During those 8 years I have shaped the product range and started key internal teams like support and research and development.

I know this company and the technology we use intimately. My role focuses on making sure our products and services fulfil client expectations for the high-performance, enterprise server industry and ensuring we have the right people in the right roles to deliver improvements, new ideas, and better services.

I am focused on how we achieve the next step, figuring out what are we lacking, communicating what the data says about our performance, and determining what we are going to be doing one, two, or five years from now.

What are some core qualities a CTO should hold?

I think the answer changes depending on the industry, but for me, a passion for technology that goes beyond your day-to-day job is a must.

Outside of that, as CTO, you get to a level where you are able to understand most technology topics, but you realise you can no longer be an expert in everything. You should be sure of your ability to make the right decisions, but these decisions should be based on the advice of the experts you employ. A CTO has to be open to change and new ideas; what worked five years ago may not be the best method now.

Can you share a pivotal moment in your life that has influenced who you are today?

I don’t think there is one key pivotal moment, some heroic story, and fortunately no terrible tragedy that befell me and changed my worldview. I think, for me, there are many small moments that have shaped me over time.

Growing up, my father worked hard to provide us with a relatively comfortable lifestyle. From a young age, I understood that my father had to make sacrifices to provide for us and the value within that – it definitely instilled a strong work ethic within me.

I always knew I wanted to be self-sufficient and successful, I wanted to move out of my parent’s home and have independence. I have worked hard since the day I started at Blackcore’s parent company, Exacta.

I have taken every role I have ever had very seriously and sacrificed my personal time to put in the extra work. Be that making sure a project gets completed on time, or ensuring a client is kept happy. At the end of the day, you make your own career path; and the harder you work, the greater chance of success. For this reason, I continue to push myself both professionally and personally to achieve my goals.

What is one major challenge you have faced in your career, and how did you overcome it?

The original launch of Blackcore was incredibly risky. The finance industry is tough. There are high expectations and high penalties for failure. Combine that with our product being an overclocked server system, which is something that very few companies offer due to the inherent difficulty of pushing computer hardware beyond its normal manufacturer specification, we had certainly picked a harsh niche.

Our first years were of significant learning and active development. At some point a decision had to be made. Had we overestimated ourselves and needed to bow out, or do we double down and build something worthwhile?

Fortunately, we chose the latter, swallowed our pride, and released a ‘Generation 2’ product four years later with all our learnings and client feedback rolled in. This was widely successful and propelled us to our current success, supplying many of the top financial companies in the electronic trading industry with some of the fastest hardware on the market.

Can you explain why overclocked servers are crucial for investment banks and large financial institutions conducting high-frequency trading?

High-frequency trading (HFT) is all about being the first to react to market data. In simple terms, it is a race, and like any race, being first gets you the gold. There are wildly varying server hardware out there, and these all have different performance metrics. To be first, you want the hardware with the lowest latency and the lowest time to react.

Overclocking is taking this hardware and then pushing it to operate above its standard manufacturer’s limitations. This means pushing it to faster clock speeds, utilising better cooling, and tuning system parameters for the best outcome. We look at each aspect of a server – the CPU cores, CPU cache, RAM, PCIe busses – and seek out extra performance whilst maintaining reliability.

The financial services industry, particularly the electronic trading fraternity, is incredibly secretive. All I can say for sure is, if they were not gaining a benefit, they would not be using our systems.

What are the benefits these servers deliver for the financial institutions as well as their customers?

In the financial industry, one key concept that we help with is latency

From the days of human-based trading pits, those with a closer view of the latest pricing always had an advantage. Theoretically for electronic trading, it’s no different.

Having a server that has a higher clock speed than others on a market allows our clients to react faster to incoming signals, and therefore, the reduced latency allows them to take advantage of fast changing market conditions before their competitors.

Some financial firms take this to the extreme by using field-programmable gate arrays (FPGAs) or application-specific integrated circuit (ASICs) to respond in the range of a handful of nanoseconds. But even in these cases, fast CPU processing can be leveraged to assist these hardware strategies to determine how they can trade with a lower latency.

However, low latency is only one side of the coin. We also have many firms leveraging our high density overclocked platforms to be able to crunch a lot of data quickly and efficiently for things like book building or comparing prices across the available markets. While this enables more complex decision making, it can also be used in conjunction with a low latency strategy to guide what parameters that strategy should use for trading.

What would be the consequences of a poorly integrated server?

Using the wrong hardware means you lose the race. Not only do you lose out on the potential profit from a successful trade, you may actually lose money by making a bad trade.

An overclocked server is a key requirement, but so is having the right software and networking environment.

It is important to fully understand the client’s environment and use case, so we can be certain that they will get the best out of the hardware.

Overclocked servers can be associated with high energy consumption. What should users do to ensure energy efficiency and sustainability while delivering high-performance computing?

Unfortunately, it is kind of the nature of the beast. The focus should be on data centre and supply chain sustainability as a whole, rather than single server systems.

How can we shift the perception from data centres being significant energy consumers to champions of sustainability and social impact?

The hardware industry is trending towards higher and higher power consumption. Advancements in CPU architecture is allowing incredibly dense CPUs or GPUs, where typically the per-core power draw is more efficient, but overall power requirements continue to increase.

A benefit of this density, and the advancements in compute power, mean that less and less hardware is needed to achieve a certain task. This means that on a large scale, total footprint should decrease, resulting in less power. Of course, this is balanced with the ever-increasing demand for more compute and increasing workloads.

I think sustainability can come from focusing on how we can capture the waste energy from these systems and re-use it. There have already been great experiments where nearby infrastructure has been heated using waste heat from a nearby data centre.

Thinking about the next five years, what is a bold prediction you have for the data centre industry?

I think there are some key constraints on certain data centres right now: space, cooling, power, and efficiency.

Most colocation data centres are only supplying 6-10KW to a rack. This is no longer enough for modern systems that can draw more than 2-3KW in 2U of rack space, which leads to half-empty racks that cannot support more systems.

Cooling is obviously a huge topic and the emerging solutions like rack-level liquid cooling and immersion solve some unique problems, but they are not simple for a data centre to implement.

A data centre is a significant investment and making sweeping changes to infrastructure is costly and disruptive. You cannot just replace thousands of standard racks with new ones that support rack-level liquid cooling or immersion cooling. This would be very difficult to implement in financial exchange data centres where a level playing field is a key goal, and even regulated.

I would predict that we will see the pendulum swing back from cloud experiments over the years where perceived cost was the driver, to more on-site, performance-focused hardware.

What advice would you give to someone starting in the data centre industry?

The data centre industry is constantly changing, whether that be from how interconnects work, to the types of processing capability available from CPU to GPU to FPGA.

It is no longer the world where one or two large vendors control the data centre tech space and I expect we will see a bunch more new innovations over the next few years. So, my one piece of advice would be, never stand still and always be investigating new technology.

Industry events are a great way to do this, and specifically for finance, you will see a lot of new technology incubated in the finance data centres.

Could you share a quote that inspires you as a leader or empowers you in your work?

“Taking on a challenge is a lot like riding a horse, isn’t it? If you are comfortable while you are doing it, you are probably doing it wrong.”

Whilst a funny quote, it also highlights that hard things are, well, hard. Overcoming challenges requires stress, uncertainty, and effort.

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