Listen to this article
When Australia seemed to be back with a fighting chance of defending the Ashes in last month’s pulsating cricket series in England, no one was watching more closely than staff at Betfair, the online betting exchange.
Several Betfair employees monitor sports events and feed the results directly into its betting platform. “People think that we take a data feed,” says chief operating officer David Yu.
“But we haven’t found one that’s fast and dedicated enough.”
It is one of the few functions that Betfair performs manually today. The company is not shy about declaring that technology is vital to its success, and has adopted a combination of buying best-of-breed products and developing core software in house.
Unlike most commercial websites, Betfair frequently sees brief spikes in traffic as punters rush to place their bets.
Initially, markets for each event had to be settled manually. “We typically start with manual processes and refine it until we’re happy,” says Mr Yu. “Then we try to automate it as much as possible.”
After a 2002 merger with Flutter.com, Mr Yu’s team embarked on a two-year process of reviewing and upgrading most of the technical infrastructure. The core betting markets system was at the time based on Microsoft’s Active Server Pages (ASP), but an upgrade to Microsoft’s .Net was weighed against a switch to rival web services platform, Java-based J2EE.
Betfair is unabashed about the importance it places on technology. Mr Yu was himself the chief technology officer until recently, and the company prides itself on a careful hiring process and attracting and keeping good IT staff.
Betfair’s inhouse strategy has caused grief for the provider of its online poker software, Cryptologic. Its share price fell sharply after announcing in August that Betfair was considering creating its own system.
But some third party performance tools are used, including Netscaler, a load balancing and caching system that has increased the speed of its application delivery and reduced bandwidth costs by a third since it was deployed in late 2004. About the same time Betfair also deployed Tangosol’s Coherence to avoid bottlenecks in applications running across clusters.
Although Mr Yu says much of the infrastructure design is trailblazing stuff, some decisions, such as the hardware mix and using Oracle dabatases, were no-brainers.
“You can go out and buy the very best hardware. And of course we wouldn’t build a database ourselves – we’ll leave that to experts such as Oracle.”
Betfair has invested about £30m in its IT infrastructure and has 120 engineers.
The hectic speed at which the company has grown means that technical changes have sometimes been more reactive than he would like, admits Mr Yu.
“Occasionally we’ve run into bottlenecks that affect how well the site runs and then have to drop everything to break through those bottlenecks,” he says.
“Sometimes, that has meant that we’ve had to react very quickly and make system upgrades.”
But the success of the business has also made it easier dealing with vendors, who view Betfair as something of a showcase.