Lehman Brothers spent $1.14 billion on information technology in 2007, while Merrill Lynch invests up to $4 billion annually in communications and IT. Those numbers hint at the potential impact of the current Wall Street crisis on the IT industry.
Many of Lehman's IT operations and assets may find buyers in the wake of yesterday's Chapter 11 filing by the investment bank's parent company, according to Computerworld. Lehman was an active player in algorithmic trading and "dark pool" equity markets, often partnering with other Wall Street firms or specialists in financial trading technology. Those partners are likely candidates to line up to buy Lehman's IT assets, which will likely be auctioned off to the highest bidder by its administrators, PricewaterhouseCoopers, according to Finextra.
Merrill Lynch, which has been bought by Bank of America, also had an ambitious IT operation, which will presumably be integrated into BofA's operations over time. Analysts say the deal may not result in enormous cuts in redundant IT staff and assets.
“There is clearly identifiable synergy between Merrill and Bank of America, which should manifest itself in IT, as well as other business areas,” Robert Iati of the TABB Group told Network World. “Their businesses are quite complementary, which should minimize the redundancies between their technology.”
At the recent Next Generation Data Center conference, Merrill Lynch Chief Technology Architect Jeffrey Birnbaum discussed “stateless computing” and Merrill’s plans to deploy a centralized virtual infrastructure. Birnbaum described a cloud-based enterprise file system (EFS), in which applications are managed by a “placement engine” that seamlessly allocates virtual machines and applications to hardware based on policies that set priorities for resource usage.