Despite Cloud Security, Performance Concerns, ‘Adopt It Now’

Many sectors in the financial services industry have embraced cloud computing, but one group—high-frequency traders—remain reluctant to adopt shared clouds. This is due to two factors, according to one high-frequency trader in the audience. The first is that he says he needs high performance, not just data storage, and he's not sure that cloud can deliver that level of performance computing. Another factor is cultural. As he puts it, the low-latency desk has a "blank check" from the organization. There is no need to seek out cost-saving measures like cloud because no one demands it.

"It's difficult to convince the skeptics, especially when the skeptics have the pulse on a significant revenue generation for the organization," says panelist Nathan Boylan, head of IT operations at Lord Abbett. "When cost is not as important as driving revenue, it's not going to happen."

Another high-frequency trader in the audience says he would be willing to look into cloud if it were possible to cordon off dedicated servers within that shared cloud environment. He did not elaborate on how that would work, but conceivably that kind of arrangement would resemble a hybrid cloud. Graham Hill, vice president of cloud infrastructure at Citi, threw a bit of cold water on that notion.

"Hybrid is hard,” Hill says. “The way we're practically seeing it happen is the cloud services are completely outside. They do their thing. And the internal private cloud is what we develop. There are not that many well-integrated hybrid solutions that do a bit of processing and a bit out." He says one exception is salesforce.com, which engineers an effective hybrid.

Bloomberg Trading Solutions does offer a hybrid option to its customers, according to CTO Brian Cunningham. "We want to offer clients across the spectrum the option of whatever they like," he says. "If they want to have a fully hosted solution they can. However, if they want to keep external systems for parts of the workflow because they're legacy systems and they want to keep what differentiates them as a firm, we have open workflow interfaces that allow exactly that type of interaction between us and an external system."

“We need to change the way we operate. Some of those roles will move to service providers. Some of those roles will remain in the organization. But the important thing to note is that you either empower yourself to drive that change, or the business will drive the change for you." —Nathan Boylan, head of IT operations, Lord Abbett

Madge Meyer, State Street's chief innovation officer, says "cloud" should not be considered a monolithic concept. There are public, private, and hybrid clouds, but there are also sets of services within clouds that differentiate them. Potential customers should go beyond the "to cloud or not to cloud" question and decide exactly what they are looking to get out of it, and which vendors can supply that.

"Every providersays, ‘Oh, we do cloud.' As you dig in deeper they may never back up files or something else," said Meyer. "Then you can't use it. As a company we're very serious about backing up data. Can you recover if you have a major disaster? And then Massachusetts [where State Street is based] has a data privacy law. You have to be able to meet regulation. So you have to be careful. These clouds are not all the same."

Finally, Boylan says IT professionals must take the bull by the horns while cloud is still young. Keep it at arm's length too long and the business side of the organization will cut the check sometime down the road, and then IT will have relinquished control. Adopt it now, on your terms, and you'll be able to dictate the parameters, he says.

"The mere mention of cloud in my organization causes people to run around flailing arms thinking we're all losing our jobs," he said. "I wouldn't go so far as to say people are losing their jobs. I think we need to change the way we operate. Some of those roles will move to service providers. Some of those roles will remain in the organization. But the important thing to note is that you either empower yourself to drive that change, or the business will drive the change for you."