brokerages this past year, financial institutions are beefing up the systems that support their on-line operations.

They are taking steps to increase capacity, improve system redundancy, "load-balance" incoming traffic, and troubleshoot, all in an effort to be better prepared for spikes in investor activity.

"We initially underestimated (demand) every time we rolled out a new product," said Darrell Davis, senior vice president of technical operations at Discover Brokerage. "My expectations are much greater, and I have a more jaded viewpoint these days."

On-line brokerages have been hit by unusually strong growth. The average number of daily on-line trades grew to almost 500,000 in the first quarter of 1999, up from fewer than 100,000 two years earlier, according to Credit Suisse First Boston.

Nor have banks been immune to the growing demand for on-line services. For example, on-line customers of Chase Manhattan Corp. encountered problems logging on to its Web site in July as new accounts and customer demand overwhelmed capacity.

"The Web has become just like ATMs, which are mission-critical and can't go down or else the brand will suffer," said Jim Bressler, director of strategic initiatives for worldwide financial services at Sun Microsystems Inc.

A basic step for many institutions, including Bank One Corp., Chase Manhattan Corp., Charles Schwab & Co., and Discover Brokerage, has been to ensure redundancy of the computer servers that host Web sites and perform critical transactions. If one system goes down, another can carry the load.

"At any single point of potential outage, we've built in both redundancy and fault tolerance," said Michael Mazza, vice president and technical director for Chase Manhattan's Internet project office. "For any server, we operate two servers. And there is a mirror image in a separate site."

Redundancy is one of the key recommendations that International Business Machines Corp.'s global services unit makes to clients, said David Smith, senior project executive in the unit. Mr. Smith managed IBM's role in helping to set up the Web infrastructure for WingspanBank.com, the Internet-only venture of Bank One Corp. IBM hosts the Web site on RS/6000 and Netfinity servers.

Efficient balancing of traffic going to separate locations or to different servers within a group can also increase the speed and reliability of a Web site, said technology professionals. IBM and WingspanBank.com chose software from Resonate Inc. of Sunnyvale, Calif. to do this on the bank's Web site.

Resonate, which has partnerships with both IBM and Sun, has notched other plum contracts in this field. Founded in 1995, the company has signed such customers as Bank of America Corp., Charles Schwab & Co., Citibank, and Discover Brokerage.

Discover uses Resonate's Central Dispatch software to manage retail traffic on its servers.

"At the time I evaluated Resonate a couple of years ago, it was one of the only games in town," said Mr. Davis of Discover, a Morgan Stanley Dean Witter & Co. subsidiary. "It works and it works well. It protects us seamlessly and without any intervention from Web server failure."

Resonate is also marketing software called Global Dispatch to manage traffic going to separate data centers, and a troubleshooting product called Commander. Bank of America is planning to use Commander at the Web site that serves its corporate customers.

"Commander brings a lot more statistics in terms of load on each of the boxes," said Chris Ravencroft, manager of Web administration and messaging services at Bank of America. "It also provides event management, so that when something happens to a server or a group of servers, it automatically takes steps to handle the problem."

Mr. Ravencroft said software like Resonate's that resides on a company's servers offers greater flexibility than traffic management tools that are hardware-based.

Even after Web sites are up and running, institutions continue to test the reliability of their sites.

"We have outside agencies that exercise each of our Web sites every few minutes to make sure there is connectivity at any time," said Mr. Mazza at Chase. "Next year we'll be monitoring the time it takes to get a specific transaction or Web page up."

Keynote Systems Inc. does similar testing for other financial service companies, and publishes a weekly index of on-line brokerage performance in transaction speed and success rates.

Recent results show brokerage sites are getting faster, said Daniel Todd, director of strategic marketing at Keynote. "You'll see one site improve a bit one week and then another improves the next week. They're working hard to improve performance because they want to improve customer satisfaction."

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