eTrade 1999 Annual Report Download - page 6

includes direct links to many investment-related resources on the Web. Alternatively, accessing E*TRADE by dialing directly through
a modem offers a method for connecting to the trading system independent of either the Internet or a proprietary online service.
. Touch-tone Telephone. TELE*MASTER, E*TRADE's interactive investing system, provides customers with a convenient way to
access quotes, place orders and access portfolio information using their voice or touch-tone telephone keypad.
A majority of the Company's revenues come from U.S. online investing services, and the Company expects its U.S. online investing
services to continue to account for a majority of its revenues in the near future. E*TRADE, like other investing services firms, is
directly affected by national and international economic and political conditions, broad trends in business and finance and substantial
fluctuations in volume and price levels of securities and futures transactions. Severe market fluctuations in the future could have a
material adverse effect on the Company's business, financial condition and operating results. Certain of the Company's competitors
with more diverse product and service offerings may be better positioned to withstand such a downturn in the securities industry. See
"Risk Factors--Risks Associated with the Securities Industry; Concentration of Services" and "Risk Factors--Risks Associated with
Substantial Competition."
The market for online investing services, particularly over the Internet, is rapidly evolving. As is typical for new and rapidly evolving
industries, demand and market acceptance for recently introduced services and products are subject to a high level of uncertainty. See
"Risk Factors--Risks Associated with Dependence on Online Commerce and the Internet."
E*TRADE Transaction-Enabling Technology
The E*TRADE engine is a proprietary transaction-enabling technology that automates traditionally labor-intensive transactions.
Because it was custom- tailored for electronic marketplace use, the E*TRADE engine provides customers with efficient service and
has the added advantage of being scalable and adaptable as usage
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increases and service offerings are expanded. Beyond these features, the multi-tiered design of the E*TRADE engine and related
software allows for rapid expansion of network and computing capacity without interrupting service or requiring replacement of
existing hardware or software.
The E*TRADE Engine
The E*TRADE transaction-enabling technology engine includes a wide variety of functions and services that allow customers to open
and monitor investment accounts and to place orders for equity, option, mutual fund and fixed income transactions. E*TRADE's core
technology is based on E*TRADE's proprietary stateless architecture. The architecture provides the key drivers of the Company's
techno-business strategy (i.e. reliability, scalability, reusability and security). The primary components include a graphical user
interface, the session manager, the transaction process monitor, the data manager and the trade processor. See "Risk Factors--Risks
Associated with Systems Failure" and "Risk Factors--Risks Associated with Dependence on Intellectual Property Rights."
. Graphical User Interface ("GUI"). E*TRADE's GUI environment is based on Netscape's Secure Enterprise Server and currently can
be accessed by individuals utilizing Netscape Navigator or Microsoft Internet Explorer. E*TRADE's GUI connects to the session
manager server through a group of Sun E4000 servers. These "web servers" provide for load balancing using Resonate software and
offer immediate scalability. Access is restricted through the use of secured network servers and routers.
. The Session Manager. The session manager's primary function is to maintain session and state and provide a consistent, reliable user
experience. The session manager is based on the Netscape Application Server product and runs on a uniquely configured group of Sun
E4000 servers. The servers are redundant and configured dynamically so that even if a server has a problem, it does not impact the
user. By deploying dynamic load balancing capabilities, the servers dynamically re-allocate load if a server becomes non-operational.
If a server is added it will also dynamically allocate load, so additional capacity may be added without scheduling a system outage.
. The Transaction Process Monitor. The transaction process monitor provides transaction delivery and establishes the business logic by
which a transaction is or is not executed. Based on BEA's Tuxedo product, the monitor accepts a transaction from the session manager
and evaluates it using business logic written in Java reusable code objects, stored at the Tuxedo services layer. The transaction is
tagged, monitored and accepted or rejected at this layer. If accepted, it is then passed along to the data manager and, if appropriate, the
automated trade processing layer.
. The Data Manager. Storing and retrieving content and information for the Web and IVR interfaces is the role of the data manager.
Based on Oracle data technology, content is received from E*TRADE's content provider partners, stored in uniquely designed
databases and caching servers and passed on to E*TRADE users. E*TRADE data servers are based on Sun technology and are secure
2002. EDGAR Online, Inc.