Merrill Buys iDataPlex for Risk Management

The wave of mergers on Wall Street hasn't entirely slowed investment in IT hardware, but appears to have refocused it on a new priority: risk management. Just weeks after being acquired by Bank of America, Merill Lynch announced today that it will purchase IBM's new iDataPlex servers (pictured above) so it can pack more computing power into its data centers.

"Our goal is to rapidly adopt technologies like iDataPlex that reduce the power consumption within our data centers," said Jeffrey M. Birnbaum, chief technology architect at Merrill Lynch. "iDataPlex is a perfectly positioned platform for this new style of computing - giving us the ability to pack a lot more compute power into smaller, less expensive package and minimize power and cooling costs."

Merrill Lynch will use its new iDataPlex servers to "build and evaluate new risk-analysis programs," the company said. Merrill announced Sept. 14 that it would be acquired by Bank of America on a $50 billion all-stock transaction. The deal was struck on the same day that it became clear that Lehman Brothers would fail, triggering the current phase of the Wall Street crisis.

Financial firms have been big investors in high-performance computing (HPC) in recent years, often to support trading operations. But the write-downs on Wall Street have begun to boost HPC investment in risk management. Firms that were surprised by larger than expected losses in their subprime mortgage holdings are boosting the computing power dedicated to analyzing the relationships between complex financial instruments.

“There has also been demand from Wall Street firms that are looking to expand their risk management computational capability in this environment,” Digital Realty CEO Michael Foust said in March. “That’s driving need for more space on the data center side.”

iDataPlex, which was introduced in April, was designed to win business for IBM in the  emerging market for massive cloud computing systems. The new server was designed to support denser server racks and improved energy efficiency.   

At 15 inches in depth, IBM’s design is much more compact than traditional 1U “pizza box” servers, taking a page from half-depth servers designed by Rackable Systems (RACK), which are 15.5 inches deep. In recent years 1U server designs have been getting deeper, in some cases as deep as 30 inches. The server’s horizontal design also allows for more efficient airflow, with a shorter path through the server. The iDataPlex rack can also be outfitted with a liquid cooled wall on the back of the system, which IBM says will enable it to run at room temperature, with no air conditioning required.