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| With the
support of its scalable, stable Cisco network, Datek Online has been
named the leader in the online brokerage business by readers of
TheStreet.com. |
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Background
Founded in 1996 and based
in Jersey City, New Jersey, Datek Online
has quickly grown to become one of the nation's largest online
brokerage firms. It offers subscribers low-cost commissions,
real-time market information and account information, fast order
processing, financial charts and news, and a learning center filled
with educational resources to help them make informed investment
decisions.
Datek Online currently boasts more than 400,000
active customer accounts and executes about 100,000 customer trades
per day. Its employees number about 1,600. The company says its
success is due to its leadership in delivering cutting-edge
technology and real-time information.
Challenge
Datek Online's previous
networking partner couldn't provide the scalability that the company
needed to manage the explosive growth that it was experiencing at
that time. As a result, the company faced the threat of network
downtime. In the online investing arena, any downtime had the
potential to create serious inconveniences for customers, not to
mention the possibility of customer defections as a
result.
"Our transaction volumes were growing at a rapid
pace," says John Grifonetti, Datek Online's president and chief
operating officer. "In this industry, if you can't handle the volume
coming in, you won't be around very long." Datek recognized that a
change would be necessary in order to ensure that the system could
accommodate the company's growing customer base while providing
optimal service.
Solution
Rolando Garcia, Datek
Online's chief networking architect, decided to replace the
company's network with Cisco technology in 1997. "No one came close
to providing equipment with the kind of scalability that Cisco could
offer," Garcia says. "Plus, we knew that the company's reputation
for reliability and service were second to none."
From that
point on, Datek Online continued to grow, adding more than 1,200
employees and a phenomenal tenfold increase in trading volume. Its
customers are highly active, averaging three trades per month. (Most
online brokerage customers average about one trade per month.) With
the support of its robust Cisco network, Datek Online is the only
major broker—online or traditional—to waive its commission if a
marketable online order is not executed within 60
seconds.
Its Cisco network has helped Datek Online introduce
several innovative services and products. It was the first major
online broker to introduce trading in decimals for Nasdaq
securities, the first to offer a continuous 12-hour trading day for
Nasdaq stocks, and the first to deliver free, real-time streaming
quotes. Datek Online was also the first brokerage firm to rebate
payments that it receives for order flow. In 2000, Money
Magazine joined TheStreet.com and Forbes in naming Datek
Online as one of the nation's top Internet brokers for frequent
traders because of its fast executions, real-time quotes, and speedy
confirmations.
Datek Online recently rolled out options
trading and Datek Direct, a new direct-access trading product that
enables investors to route orders to specific electronic
communications networks and market makers.
Results
Datek Online's Cisco network
is providing the foundation for integrating voice and data at the
company's new, consolidated 410,000-square-foot operations center in
New Jersey, using Cisco Architecture for Voice, Video, and
Integrated Data (AVVID) technology.
"It's the logical next
step for us, and it has to be cheaper than a traditional PBX
[private branch exchange]," Grifonetti says. "We know there are
tremendous economic benefits because there are no separate cabling
requirements for the phones, we'll have much more flexibility in
adding and moving personnel, and we won't be tied to a single
equipment vendor. As a first step, we'll provide unified messaging
for our employees who are not directly supporting our customers.
Once the system is up and running successfully, we'll move to phase
two—providing our customer service personnel with this same
technology. That will offer even greater convenience for our
clients. Based on the number of phone connections involved, the
installation will make Datek Online one of Cisco's top AVVID
customers."
Grifonetti goes on to say, "We chose Cisco
because of its reputation for having network products that work and
enable us to grow. They also offer tremendous support. When we need
answers, we get them immediately. Everybody at Cisco, from bottom to
top, seems committed to strong customer service."
When asked
if he views Cisco as a strategic networking partner, Grifonetti
responds, "Our core network is all Cisco, and now we're adding voice
over IP [Internet protocol] with Cisco AVVID technology. When it
comes to a networking partner, you can't get more strategic than
that."
Next Steps
To expand business
opportunities, streamline processes, improve customer satisfaction,
and increase profitability, companies need to take advantage of
technology solutions that can transform the way they do
business.
These technology solutions must be able to:
 Support the
corporate vision
Be delivered via
reliable, high-performance networks
Scale with the
growth of the company
Offer maximum
networking power at the best cost
What Cisco
Offers
Cisco has set the standard for using Internet
technology to transform business processes. Its Internet Business Solutions Group has vast
experience helping companies make the transition from old-world
business to e-business. From helping companies determine their Net
readiness to installing networks for the integration of voice,
video, and data, the experience and expertise of Cisco can help a
business interested in any level of e-business implementation. Cisco
offers:
Internet-powered business methodologies
Internet-powered
application frameworks
Networking
reference architectures
Alliances with
best-of-breed companies with proven experience in building
e-business applications and solutions
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Datek
Snapshot
Founded in
1996
Based in Jersey City, New Jersey
More than
400,000 active customer accounts
About
100,000 customer trades per day
About 1,600
employees
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