E*Trade Gears Up With Robust Network, Retooled Site

Palo Alto, Calif. -- As E*Trade Group hits adolescence, it's staking out room to grow.

The online investment services firm is spending about $25 million to fortify its network for a larger transaction load, while still leaving substantial room for the sharp peaks and valleys that characterize stock market activity. E*Trade Inc.'s ability to reallocate hardware and software resources on the fly should help serve more customers during market surges.

E*Trade, which bills itself as an online investment ser vices provider that is equal parts technology and financial company, said that last year more than 225,000 customers completed 4.1 million transactions through its online services. The company reported net revenue of $142 million last year. E*Trade's customers moved about $7.7 billion in combined assets through its system. In order to support a more scalable network architecture, the company last fall made plans to refurbish its Web site and rebuild its system around a multitiered transaction-processing application--built almost entirely of reusable code.

The reworked site, scheduled to go live in April, will be called Destination E*Trade. Currently, two data centers--in E*Trade's Palo Alto headquarters and in Rancho Cordova, Calif.--mirror each other. E*Trade is preparing to open a third data center in anticipation of a significant jump in Web hits and transactions.

At these centers, Digital Equipment's Alpha servers carry the heaviest processing loads and are supplemented by Ultra 2 and other servers fr om Sun Microsystems. Microsoft's Windows NT servers support local LAN services.

To minimize the number of hops customers make to access these centers, E*Trade uses six strategically placed ISPs that feed multiple lines to each data center.

In November, E*Trade's mutual fund service was the first to go live based on the new architecture. It took only six weeks to create an application and subject it to stress tests and focus-group critiques.

The payoff is twofold. Rebecca Patton, senior vice president for the company's Advanced Products Group, said the mutual fund service has garnered more than $150 million in assets since its launch. And since many of the components written in those 17-hour days prior to deployment are reusable, E*Trade's developers have lots of work behind them in preparation for the spring debut of Destination E*Trade.

"We are reusing maybe 90 [percent] to 95 percent of every piece of code we write," said Tim Fleming, vice president of technical planning and development. Component-b ased development is a critical piece of E*Trade's strategy to attract investors with new features and faster transactions.

"In the past, more processes had to be generated to allow customers to place transactions," said Debra Chrapaty, senior vice president and CIO at E*Trade. "We've created a scalable architecture and skinnied down those processes" to better meet customers' demands for ever-speedier execution of buys, sells and trades.

The upgraded architecture introduces several new layers. At the front end, customers may conduct transactions regulated by the Secure Sockets Layer protocol with Web browsers, telephones or a WebTV interface. In progress is another interface for 3Com's PalmPilot and other personal digital assistants.

Netscape's Enterprise Server links into transaction processing services and dynamically generates Web pages based on the tasks users initiate--typically a variety of transactions during one E*Trade session, Chrapaty said. "Customers may want to get a quote, do online researc h or buy and sell within many different types of E*Trade products," she added.

The application server layer interacts with BEA Systems' Tuxedo product, middleware that encapsulates business processes with data stored in several Sybase Inc. DBMSes. Tuxedo also ensures that transactions are completed in their entirety.

These resources can be geographically distributed; a customer database, for example, running at E*Trade's Rancho Cordova site, can interact with Tuxedo services at the Palo Alto site. However, when bottlenecks occur, they typically happen "at some point in the pipe between the databases and the BEA services," Fleming said.

Tuxedo also manages the system's access to the bread-and-butter data from the marketplace, the stock feeds from Nasdaq and news feeds from Reuters.

Using Tuxedo, "I can scale up the number of services that control orders, and then 15 minutes later I can scale down those and scale up the number of stock quotes that might be needed," Fleming said. Today, these resource al locations are made in Tuxedo 6.3 through a command line, Fleming said. But BEA officials said that some dynamic load-balancing capabilities are in version 6.4 of Tuxedo.