Ross and I attended the Aite Group Roundtable on Event Processing today. For the unitiated, Event Processing (aka ESP or “Event Stream Processing”, CEP or “Complex Event Processing”, or as I heard at the panel today for the first time, “Complex Event Stream Processing”) is a relatively new class of application. Broadly defined, such systems are concerned with providing languages and execution environments that allow developers to quickly create event-driven systems, query and analyze streaming data, and perform computations over incoming data at a high frequency. As Aite describes it:

Event Processing has become an integral element in the algorithmic and strategy trading areas and is now moving increasingly to other areas, such as data monitoring, compliance, Transaction Cost Analysis (TCA), risk management, proprietary data derivations, market making, and others.

The panel discussion included Don Deloach, CEO of Aleri; Eric Weinstein, Director of Quantitative Research for the Natron Group (a hedge fund); Dr. John Bates, Founder and Vice President of Progress Apama; Bill Hobbib, VP Marketing for StreamBase; and Jeff Hudson, CEO of Vhayu; and the panel was moderated by Brad Bailey, Senior Analyst with the Aite Group.

It’s clear to me that the industry is at something of an inflection point. Homegrown CEP systems are over, and anyone building such as system from here forward will be foolish not to consider one of these platforms. I have personally seen the adoption of these platforms skyrocket even in the past year. And yet… the tools are still somewhat immature, the range of applications they are adopted for is somewhat limited (mostly they are considered in Algo trading, and to a lesser extend, pricing), the market is fragmented, uptake overall is tiny, and standards are nascent at best. Opportunity looms large in this space, and surely there will be winners and losers; consolidation, standardization, and homogenization.

Even basic awareness of what these types of systems can do is confined to a relatively narrow band of early adopters; if you were to poll 100 random developers in financial services, I bet less than 5 of have heard of these products and even fewer have practical experience with them. In fact, as I stated above, there is even still some debate as to what to name this stuff, though people seem to be coalescing around the general term “Event Processing”.

At Lab49 we’re working with these platforms quite often and in fact have run across all the major vendors above (plus others such as Coral8) and I expect they will move from the periphery to become a central component in most capital markets architecture stacks fairly soon.