RE: Banking on the Cloud

I think there is a “Verticalization” opportunity on top of the proverbial cloud. At my company, we provide a niche product to securely & virtually facilitate major corporate sales (IPO, buyouts, etc.). We provide the technology and outsource the data hosting to our provider (SAS 70 II compliant of course).

There is definite opportunity for expansion into other services (for the financial vertical and many others) and a compelling cost advantage will certainly pique interest.

---

From: cloud-computing@googlegroups.com [mailto:cloud-computing@googlegroups.com] On Behalf Of Jens Iversen
Sent: Monday, June 16, 2008 1:54 PM
To: cloud-computing@googlegroups.com
Subject: RE: Banking on the Cloud

…it probably isn’t quite as easy as that.

Banks, well at least the ones that mostly abide by the rules and standards, have certain prerogatives as a result thereof. And one of them is “auditing” (SOX, Basel I…II etc).

If cloud computing, mass-virtualization of servers, computing power and storage, are a great concept (and indeed fact), this concept still lacks way behind in practical application for large scale adoption by financial institutions because of the current lack of support of (and hence control) of “multi-tenancy-monitoring-reporting-and-management”…in fact, those terms are antithesis to what one can leverage w virtualization and achieve with cloud-computing.

And that is the service-provider-view.

The Telco/carrier service-providers have been in this business for years. They stand testimony to the fact that it takes significant investments to offer a control-pane that can and will “monitor/report/manage” multi-technologies in the moving world of demand & supply and security and quality. The data-network technologists entered the SP-space and had to learn this lesson the hard way.

Today, only few of the fundamental technologies of virtualization provide tools to that effect, and even when they do, they tend to be limited to that technology only –ignoring all the other ingredient components of the overall cloud –and how good is that when you want “service”, right?

Let’s not forget that CIOs and TIO’s of banks (and others, of course) are answering to management who request data that support the board’s very low appetite for risk… In short, they need to be able to demonstrate, quite really, that standards are being met, reliably and consistently. And that they (the IT-org) are verrrry likely to do so in the future. “Nothing fancy. Conservative, yes please. Thank you. Just like that. No thanks, nothing on the side. Plain vanilla.” …and banks are NOT going to run the risk of facing such eventualities of “sharing” customer information, or retrieving another bank’s information. IT is just plainly inconceivable. And since they are being asked to demonstrate how they are performing in their ability to “avoid such unhappy encounters” –and because nobody offers tools to demonstrate that—they simply stay away from the burning edges of that stove.

That doesn’t mean that such CIO/TIO levels don’t have the necessary “get-it” factor of cloud-computing. No, it means that specific requirements aren’t being met with a single technology, and anyways, not without significant integration* effort of tools that can monitor/report & manage this.

CIO’s indeed are –or if they get a 2^nd chance, become—a most responsible breed.

(*notice that such integration, would invariably also mean “fixing” and “setting” and hence creating structures, which are anaemic to the dynamic of virtualisation.)

---

De : cloud-computing@googlegroups.com [mailto:cloud-computing@googlegroups.com] De la part de Reuven Cohen
Envoyé : lundi 16 juin 2008 21:35
À : cloud-computing@googlegroups.com
Objet : Re: Banking on the Cloud

So what you're saying is a "Bank Cloud" might be a matter of product positioning and less about the risk in outsourcing their infrastructure. This would also explain their concerns about Amazon.

reuven

On Mon, Jun 16, 2008 at 2:59 PM, thomas.purves@gmail.com <thomas.purves@gmail.com> wrote:

It's important to remember that banks outsource a lot of data,
customer information and processing already. Pretty much cloud
computing and they've been doing it for ages. The catch is most of
these vendors focus specifically on the financial industry and the
computing is integrated tightly with other business services and
processes (so it's not pure cloud computing by any means).

For example TSYS maintains credit card accounts and processes
billions (probably near trillions) in card transactions a year for
bank clients.

The specs and the systems exist it's just up to the cloud computing
providers to meet the requirements and put up with the audits etc.

--
--

Reuven Cohen
Founder & Chief Technologist, Enomaly Inc.
www.enomaly.com :: 416 848 6036 x 1
skype: ruv.net // aol: ruv6

blog > www.elasticvapor.com
-
Get Linked in> http://linkedin.com/pub/0/b72/7b4

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Re: Banking on the Cloud

Reuven's post resonates with me - its all about making money.

I've recently finished a project that involved rolling out a web service that literally saved our company a million dollars per week in profits. The service had to scale to all of our company's e-Commerce traffic in the US, and had to work in real-time (not a batch process). In part of our company's SaaS infrastructure and experience - the service was built / integrated / and deployed in exactly 60 days with a team of about 7 engineers.

Because the company I work for is essentially "in-the-cloud" already, it won't be that hard to expose that particular service around to others - (not likely in the near term because Amazon's use case was really specialized).

Cloud computing and SaaS is really going to take off when :
1) Companies learn how to use SaaS/cloud computing to truly make "big money"
2) Cloud computing providers provide the infrastructure to do so.

Regards,
Alan Ho

----- Original Message ----
From: Reuven Cohen <r..@enomaly.com>
To: cloud-computing <cloud-computing@googlegroups.com>
Sent: Thursday, June 12, 2008 8:05:56 PM
Subject: Banking on the Cloud

I've spent the last few days hanging out with a bunch of bankers at the annual Morgan Stanley CTO Summit in San Francisco. The invite only event mixes the top Morgan Stanley technology personnel, emerging technology companies and key players in the venture capital world.

Cloud Computing was a noticeably "hot topic" of conversation at this years summit. My invitation to this years event was a rare opportunity to pick the brains of the true enterprise decision makers on the challenges as well as the opportunities for cloud computing within an large financial environment. This year was particularly interesting because of the downturn in the finance market and challenges associated with it.

I was surprised by just how informative this event actually was, I figured it would be just another "bankers" tech get together. I was wrong. Below are some of the key points I took away from the summit.

Cloud Computing was front and center this year. One of the more interesting points that kept reoccurring was the need for better security. There seems to be a definite desire to use "Cloud Infrastructure" both internally within high performance computing, trading platforms and other various software platform services. There seems to a genuine desire to use external cloud resources such as Amazon. The need to secure data in the cloud was one of their single biggest concern. Those who offer this kind of "bridge to the cloud" will be the ones who will bring the most value to the banking industry. What is interesting, for the time being they seem more interested in keeping their "compute resources" safely tucked under the mattress then putting it to the hands of a "book store". (Personally I'd rather keep my money in the bank where it is safe and more easily managed in the same way I'd rather keep my computing infrastructure in a well managed cloud rather then in my office closet. Until the major banks realize this, I don't foresee a lot of movement toward the public cloud.)

Another interesting take away, the traditional enterprise sales model is dead. Getting in through the back door is the way of the future. SaaS, Cloud and Open source are all viable options and in some ways preferred. They provide a frictionless way for IT works within Morgan Stanley a way to try new approaches, services and technologies. They were also quick to point out that whether or not the software was traditional or hosted was secondary to what "problem" it solved. The ability to solve a partcular problem was the most important aspect in getting your product or service in the door, this point is more important then any license applied to the technology. So don't focus on the "it's SaaS", focus on the problem.

Also interesting was the declaration that cost is not always a major part of the decision process when looking at software and related services. One example was provided by a top level VP, his story involed a 2,000 server deployment used for some sort of risk analysis (he was vague). This deployment of 2,000 servers easily costs them several million dollars, moreover they only use these servers for about 1 hour per month (if at all). But when they do use these servers, on that one day when the "market goes crazy" it could mean the difference between a 2 billion dollar loss or a 1 billion dollar profit. His numbers may have been an exaggerated a bit, but the point hit home. (It's all about making money)

Another area that kept being mentioned was virtual desktop deployments are big business for the bank. VDI users now have the ability to work within their own "context" and have their personal desktop environment move with them. No longer do IT staff need to continuely maintain desktops onsite thus saving the bank a lot of time and resources. They also made mention that "human resources" is their biggest technology cost. If a employee changes position, moves to a new office and leaves all together, it's now just a couple clicks saving the bank a lot of money.

Interesting was the amount of data integration companies at the event. Based on the sheer volume of data integration companies at the event, I would say they are looking seriously at this area, although my conversations didn't touch upon this topic. (I was way to busy pushing my cloud agenda.)

One of the biggest surprises was regardless of the downturn in the markets, Morgan Stanley is on track to spend more then ever on their IT budget. They seem to think that during periods of lower economic activity it gives them a rare opportunity to establish themselves in new areas of emerging technology that my give them a competitive advantage down the road. They also seem to think that their use of technology will directly influence their ability to maintain their lead in the lucrative tech IPO market (which appears to be none existent this year). They went on to say that the companies that emerge during the hardtimes tend to do better in the long term (Think Google). Morgan Stanley is ready to apply this to their own business and I applaud them for it. If I ever go IPO, I know who will represent me!

(Original Post: http://elasticvapor.com/2008/06/banking-on-cloud.html)
--
--

Reuven Cohen
Founder & Chief Technologist, Enomaly Inc.

blog > www.elasticvapor.com
-
Get Linked in> http://linkedin.com/pub/0/b72/7b4

---

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Re: Banking on the Cloud

Well...

On Fri, Jun 13, 2008 at 8:20 AM, <ju...@yahoo.com> wrote:

"Another interesting take away, the traditional enterprise sales model
is
dead."

Amen brother. Something many are still learning the hard way.

However, be forewarned that the only companies that Warberg Pincus
have in their portfolio that have multi-million dollar deals on the
table are companies with traditional enterprise sales models,
according to an insider I spoke with. Personally, I think that's
because WP has a bias for traditional model companies, but what do I
know.

James

Isn't it because the new 'outside in' sales models take years to develop? Very few VCs invest in adoption vectors and market velocity. I've met some smarter ones that 'get it' and will do this but the herd are still 100% on the old model. Please note I am not completely dissing the old model, nor suggesting that investors ought to pile in to 'adoption first' businesses to the exclusion of all else. However. a mix is healthy.

alexis

On Jun 12, 8:05 pm, "Reuven Cohen" <r...@enomaly.com> wrote:
> I've spent the last few days hanging out with a bunch of bankers at the
> annual Morgan Stanley CTO Summit in San Francisco. The invite only event
> mixes the top Morgan Stanley technology personnel, emerging technology
> companies and key players in the venture capital world.
>
> Cloud Computing was a noticeably "hot topic" of conversation at this years
> summit. My invitation to this years event was a rare opportunity to pick the
> brains of the true enterprise decision makers on the challenges as well as
> the opportunities for cloud computing within an large financial environment.
> This year was particularly interesting because of the downturn in the
> finance market and challenges associated with it.
>
> I was surprised by just how informative this event actually was, I figured
> it would be just another "bankers" tech get together. I was wrong. Below are
> some of the key points I took away from the summit.
>
> Cloud Computing was front and center this year. One of the more interesting
> points that kept reoccurring was the need for better security. There seems
> to be a definite desire to use "Cloud Infrastructure" both internally within
> high performance computing, trading platforms and other various software
> platform services. There seems to a genuine desire to use external cloud
> resources such as Amazon. The need to secure data in the cloud was one of
> their single biggest concern. Those who offer this kind of "bridge to the
> cloud" will be the ones who will bring the most value to the banking
> industry. What is interesting, for the time being they seem more interested
> in keeping their "compute resources" safely tucked under the mattress then
> putting it to the hands of a "book store". (Personally I'd rather keep my
> money in the bank where it is safe and more easily managed in the same way
> I'd rather keep my computing infrastructure in a well managed cloud rather
> then in my office closet. Until the major banks realize this, I don't
> foresee a lot of movement toward the public cloud.)
>
> Another interesting take away, the traditional enterprise sales model is
> dead. Getting in through the back door is the way of the future. SaaS, Cloud
> and Open source are all viable options and in some ways preferred. They
> provide a frictionless way for IT works within Morgan Stanley a way to try
> new approaches, services and technologies. They were also quick to point out
> that whether or not the software was traditional or hosted was secondary to
> what "problem" it solved. The ability to solve a partcular problem was the
> most important aspect in getting your product or service in the door, this
> point is more important then any license applied to the technology. So don't
> focus on the "it's SaaS", focus on the problem.
>
> Also interesting was the declaration that cost is not always a major part of
> the decision process when looking at software and related services. One
> example was provided by a top level VP, his story involed a 2,000 server
> deployment used for some sort of risk analysis (he was vague). This
> deployment of 2,000 servers easily costs them several million dollars,
> moreover they only use these servers for about 1 hour per month (if at all).
> But when they do use these servers, on that one day when the "market goes
> crazy" it could mean the difference between a 2 billion dollar loss or a 1
> billion dollar profit. His numbers may have been an exaggerated a bit, but
> the point hit home. (It's all about making money)
>
> Another area that kept being mentioned was virtual desktop deployments are
> big business for the bank. VDI users now have the ability to work within
> their own "context" and have their personal desktop environment move with
> them. No longer do IT staff need to continuely maintain desktops onsite thus
> saving the bank a lot of time and resources. They also made mention that
> "human resources" is their biggest technology cost. If a employee changes
> position, moves to a new office and leaves all together, it's now just a
> couple clicks saving the bank a lot of money.
>
> Interesting was the amount of data integration companies at the event. Based
> on the sheer volume of data integration companies at the event, I would say
> they are looking seriously at this area, although my conversations didn't
> touch upon this topic. (I was way to busy pushing my cloud agenda.)
>
> One of the biggest surprises was regardless of the downturn in the markets,
> Morgan Stanley is on track to spend more then ever on their IT budget. They
> seem to think that during periods of lower economic activity it gives them a
> rare opportunity to establish themselves in new areas of emerging technology
> that my give them a competitive advantage down the road. They also seem to
> think that their use of technology will directly influence their ability to
> maintain their lead in the lucrative tech IPO market (which appears to be
> none existent this year). They went on to say that the companies that emerge
> during the hardtimes tend to do better in the long term (Think Google).
> Morgan Stanley is ready to apply this to their own business and I applaud
> them for it. If I ever go IPO, I know who will represent me!
>
> (Original Post:http://elasticvapor.com/2008/06/banking-on-cloud.html)
> --
> --
>
> Reuven Cohen
> Founder & Chief Technologist, Enomaly Inc.
>
> blog >www.elasticvapor.com
> -
> Get Linked in>http://linkedin.com/pub/0/b72/7b4

--
Alexis Richardson
+44 20 7617 7339 (UK)
+44 77 9865 2911 (cell)
+1 650 206 2517 (US)
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Re: Banking on the Cloud

"Another interesting take away, the traditional enterprise sales model
is
dead."

Amen brother. Something many are still learning the hard way.

However, be forewarned that the only companies that Warberg Pincus
have in their portfolio that have multi-million dollar deals on the
table are companies with traditional enterprise sales models,
according to an insider I spoke with. Personally, I think that's
because WP has a bias for traditional model companies, but what do I
know.

James

On Jun 12, 8:05 pm, "Reuven Cohen" <r...@enomaly.com> wrote:
> I've spent the last few days hanging out with a bunch of bankers at the
> annual Morgan Stanley CTO Summit in San Francisco. The invite only event
> mixes the top Morgan Stanley technology personnel, emerging technology
> companies and key players in the venture capital world.
>
> Cloud Computing was a noticeably "hot topic" of conversation at this years
> summit. My invitation to this years event was a rare opportunity to pick the
> brains of the true enterprise decision makers on the challenges as well as
> the opportunities for cloud computing within an large financial environment.
> This year was particularly interesting because of the downturn in the
> finance market and challenges associated with it.
>
> I was surprised by just how informative this event actually was, I figured
> it would be just another "bankers" tech get together. I was wrong. Below are
> some of the key points I took away from the summit.
>
> Cloud Computing was front and center this year. One of the more interesting
> points that kept reoccurring was the need for better security. There seems
> to be a definite desire to use "Cloud Infrastructure" both internally within
> high performance computing, trading platforms and other various software
> platform services. There seems to a genuine desire to use external cloud
> resources such as Amazon. The need to secure data in the cloud was one of
> their single biggest concern. Those who offer this kind of "bridge to the
> cloud" will be the ones who will bring the most value to the banking
> industry. What is interesting, for the time being they seem more interested
> in keeping their "compute resources" safely tucked under the mattress then
> putting it to the hands of a "book store". (Personally I'd rather keep my
> money in the bank where it is safe and more easily managed in the same way
> I'd rather keep my computing infrastructure in a well managed cloud rather
> then in my office closet. Until the major banks realize this, I don't
> foresee a lot of movement toward the public cloud.)
>
> Another interesting take away, the traditional enterprise sales model is
> dead. Getting in through the back door is the way of the future. SaaS, Cloud
> and Open source are all viable options and in some ways preferred. They
> provide a frictionless way for IT works within Morgan Stanley a way to try
> new approaches, services and technologies. They were also quick to point out
> that whether or not the software was traditional or hosted was secondary to
> what "problem" it solved. The ability to solve a partcular problem was the
> most important aspect in getting your product or service in the door, this
> point is more important then any license applied to the technology. So don't
> focus on the "it's SaaS", focus on the problem.
>
> Also interesting was the declaration that cost is not always a major part of
> the decision process when looking at software and related services. One
> example was provided by a top level VP, his story involed a 2,000 server
> deployment used for some sort of risk analysis (he was vague). This
> deployment of 2,000 servers easily costs them several million dollars,
> moreover they only use these servers for about 1 hour per month (if at all).
> But when they do use these servers, on that one day when the "market goes
> crazy" it could mean the difference between a 2 billion dollar loss or a 1
> billion dollar profit. His numbers may have been an exaggerated a bit, but
> the point hit home. (It's all about making money)
>
> Another area that kept being mentioned was virtual desktop deployments are
> big business for the bank. VDI users now have the ability to work within
> their own "context" and have their personal desktop environment move with
> them. No longer do IT staff need to continuely maintain desktops onsite thus
> saving the bank a lot of time and resources. They also made mention that
> "human resources" is their biggest technology cost. If a employee changes
> position, moves to a new office and leaves all together, it's now just a
> couple clicks saving the bank a lot of money.
>
> Interesting was the amount of data integration companies at the event. Based
> on the sheer volume of data integration companies at the event, I would say
> they are looking seriously at this area, although my conversations didn't
> touch upon this topic. (I was way to busy pushing my cloud agenda.)
>
> One of the biggest surprises was regardless of the downturn in the markets,
> Morgan Stanley is on track to spend more then ever on their IT budget. They
> seem to think that during periods of lower economic activity it gives them a
> rare opportunity to establish themselves in new areas of emerging technology
> that my give them a competitive advantage down the road. They also seem to
> think that their use of technology will directly influence their ability to
> maintain their lead in the lucrative tech IPO market (which appears to be
> none existent this year). They went on to say that the companies that emerge
> during the hardtimes tend to do better in the long term (Think Google).
> Morgan Stanley is ready to apply this to their own business and I applaud
> them for it. If I ever go IPO, I know who will represent me!
>
> (Original Post:http://elasticvapor.com/2008/06/banking-on-cloud.html)
> --
> --
>
> Reuven Cohen
> Founder & Chief Technologist, Enomaly Inc.
>
> blog >www.elasticvapor.com
> -
> Get Linked in>http://linkedin.com/pub/0/b72/7b4

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Re: Banking on the Cloud

--- On Thu, 6/12/08, Reuven Cohen <r..@enomaly.com> wrote:
> Cloud Computing was front and center this year. One of the
> more interesting points that kept reoccurring was the need
> for better security. There seems to be a definite desire
> to use "Cloud Infrastructure" both internally within high
> performance computing, trading platforms and other various
> software platform services. There seems to a genuine desire
> to use external cloud resources such as Amazon. The need to
> secure data in the cloud was one of their single biggest
> concern. Those who offer this kind of "bridge to the cloud"
> will be the ones who will bring the most value to the
> banking industry. What is interesting, for the time being
> they seem more interested in keeping their "compute
> resources" safely tucked under the mattress then putting it
> to the hands of a "book store".

The obvious observations:

- While your data is being processed on someone else's hardware, you are essentially trusting that other party to maintain the integrity of your data. It is really hard to verify that the environment and practices of the people operating and running the cloud are actually adequate, correct, or implemented in a secure manner at all. Sufficient security might be difficult to implement in a cloud computing environment that was not designed from the ground up for this purpose.

- As a practical matter, I wonder if a solution to this, assuming the facilities are up to spec, would be to split the difference with what is done for classified services. It might be sufficient to have the industries with strong security and/or regulatory concerns certify or clear a small subset of employees at the cloud provider for operating their portion of the cloud. In essence, a strictly scrutinized trust network with revocation power. Hell, this probably dovetails with some existing bodies.

This will potentially create a fertile new ground for very subtle and complex exploits and manipulations. We just have not created the incentive yet for anyone to bother (that I know of).

Cheers,

Andrew

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RE: Banking on the Cloud

Reuven, thanks for the info.

No surprise that data integration companies are looking seriously into this area. According to a recent Forrester study, data integration is the number one inhibitor to SaaS adoption. It's a problem that's not well suited to either SaaS or on-premises software because you've got to get data from one place to the other. More here: http://blog.snaplogic.org/?p=199

__________________________________
Chris Marino
SnapLogic, Inc.

Really Simple Integration
www.snaplogic.com
650-655-7200

-----Original Message-----
From: cloud-computing@googlegroups.com [mailto:cloud-computing@googlegroups.com] On Behalf Of Reuven Cohen
Sent: Thursday, June 12, 2008 8:06 PM
To: cloud-computing
Subject: Banking on the Cloud

I've spent the last few days hanging out with a bunch of bankers at the annual Morgan Stanley CTO Summit in San Francisco. The invite only event mixes the top Morgan Stanley technology personnel, emerging technology companies and key players in the venture capital world.

Cloud Computing was a noticeably "hot topic" of conversation at this years summit. My invitation to this years event was a rare opportunity to pick the brains of the true enterprise decision makers on the challenges as well as the opportunities for cloud computing within an large financial environment. This year was particularly interesting because of the downturn in the finance market and challenges associated with it.

I was surprised by just how informative this event actually was, I figured it would be just another "bankers" tech get together. I was wrong. Below are some of the key points I took away from the summit.

Cloud Computing was front and center this year. One of the more interesting points that kept reoccurring was the need for better security. There seems to be a definite desire to use "Cloud Infrastructure" both internally within high performance computing, trading platforms and other various software platform services. There seems to a genuine desire to use external cloud resources such as Amazon. The need to secure data in the cloud was one of their single biggest concern. Those who offer this kind of "bridge to the cloud" will be the ones who will bring the most value to the banking industry. What is interesting, for the time being they seem more interested in keeping their "compute resources" safely tucked under the mattress then putting it to the hands of a "book store". (Personally I'd rather keep my money in the bank where it is safe and more easily managed in the same way I'd rather keep my computing infrastructure in a well managed cloud rather then in my office closet. Until the major banks realize this, I don't foresee a lot of movement toward the public cloud.)

Another interesting take away, the traditional enterprise sales model is dead. Getting in through the back door is the way of the future. SaaS, Cloud and Open source are all viable options and in some ways preferred. They provide a frictionless way for IT works within Morgan Stanley a way to try new approaches, services and technologies. They were also quick to point out that whether or not the software was traditional or hosted was secondary to what "problem" it solved. The ability to solve a partcular problem was the most important aspect in getting your product or service in the door, this point is more important then any license applied to the technology. So don't focus on the "it's SaaS", focus on the problem.

Also interesting was the declaration that cost is not always a major part of the decision process when looking at software and related services. One example was provided by a top level VP, his story involed a 2,000 server deployment used for some sort of risk analysis (he was vague). This deployment of 2,000 servers easily costs them several million dollars, moreover they only use these servers for about 1 hour per month (if at all). But when they do use these servers, on that one day when the "market goes crazy" it could mean the difference between a 2 billion dollar loss or a 1 billion dollar profit. His numbers may have been an exaggerated a bit, but the point hit home. (It's all about making money)

Another area that kept being mentioned was virtual desktop deployments are big business for the bank. VDI users now have the ability to work within their own "context" and have their personal desktop environment move with them. No longer do IT staff need to continuely maintain desktops onsite thus saving the bank a lot of time and resources. They also made mention that "human resources" is their biggest technology cost. If a employee changes position, moves to a new office and leaves all together, it's now just a couple clicks saving the bank a lot of money.

Interesting was the amount of data integration companies at the event. Based on the sheer volume of data integration companies at the event, I would say they are looking seriously at this area, although my conversations didn't touch upon this topic. (I was way to busy pushing my cloud agenda.)

One of the biggest surprises was regardless of the downturn in the markets, Morgan Stanley is on track to spend more then ever on their IT budget. They seem to think that during periods of lower economic activity it gives them a rare opportunity to establish themselves in new areas of emerging technology that my give them a competitive advantage down the road. They also seem to think that their use of technology will directly influence their ability to maintain their lead in the lucrative tech IPO market (which appears to be none existent this year). They went on to say that the companies that emerge during the hardtimes tend to do better in the long term (Think Google). Morgan Stanley is ready to apply this to their own business and I applaud them for it. If I ever go IPO, I know who will represent me!

(Original Post: http://elasticvapor.com/2008/06/banking-on-cloud.html)
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Reuven Cohen
Founder & Chief Technologist, Enomaly Inc.

blog > http://www.elasticvapor.com/
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Get Linked in> http://linkedin.com/pub/0/b72/7b4

Banking on the Cloud

I've spent the last few days hanging out with a bunch of bankers at the annual Morgan Stanley CTO Summit in San Francisco. The invite only event mixes the top Morgan Stanley technology personnel, emerging technology companies and key players in the venture capital world.

Cloud Computing was a noticeably "hot topic" of conversation at this years summit. My invitation to this years event was a rare opportunity to pick the brains of the true enterprise decision makers on the challenges as well as the opportunities for cloud computing within an large financial environment. This year was particularly interesting because of the downturn in the finance market and challenges associated with it.

I was surprised by just how informative this event actually was, I figured it would be just another "bankers" tech get together. I was wrong. Below are some of the key points I took away from the summit.

Cloud Computing was front and center this year. One of the more interesting points that kept reoccurring was the need for better security. There seems to be a definite desire to use "Cloud Infrastructure" both internally within high performance computing, trading platforms and other various software platform services. There seems to a genuine desire to use external cloud resources such as Amazon. The need to secure data in the cloud was one of their single biggest concern. Those who offer this kind of "bridge to the cloud" will be the ones who will bring the most value to the banking industry. What is interesting, for the time being they seem more interested in keeping their "compute resources" safely tucked under the mattress then putting it to the hands of a "book store". (Personally I'd rather keep my money in the bank where it is safe and more easily managed in the same way I'd rather keep my computing infrastructure in a well managed cloud rather then in my office closet. Until the major banks realize this, I don't foresee a lot of movement toward the public cloud.)

Another interesting take away, the traditional enterprise sales model is dead. Getting in through the back door is the way of the future. SaaS, Cloud and Open source are all viable options and in some ways preferred. They provide a frictionless way for IT works within Morgan Stanley a way to try new approaches, services and technologies. They were also quick to point out that whether or not the software was traditional or hosted was secondary to what "problem" it solved. The ability to solve a partcular problem was the most important aspect in getting your product or service in the door, this point is more important then any license applied to the technology. So don't focus on the "it's SaaS", focus on the problem.

Also interesting was the declaration that cost is not always a major part of the decision process when looking at software and related services. One example was provided by a top level VP, his story involed a 2,000 server deployment used for some sort of risk analysis (he was vague). This deployment of 2,000 servers easily costs them several million dollars, moreover they only use these servers for about 1 hour per month (if at all). But when they do use these servers, on that one day when the "market goes crazy" it could mean the difference between a 2 billion dollar loss or a 1 billion dollar profit. His numbers may have been an exaggerated a bit, but the point hit home. (It's all about making money)

Another area that kept being mentioned was virtual desktop deployments are big business for the bank. VDI users now have the ability to work within their own "context" and have their personal desktop environment move with them. No longer do IT staff need to continuely maintain desktops onsite thus saving the bank a lot of time and resources. They also made mention that "human resources" is their biggest technology cost. If a employee changes position, moves to a new office and leaves all together, it's now just a couple clicks saving the bank a lot of money.

Interesting was the amount of data integration companies at the event. Based on the sheer volume of data integration companies at the event, I would say they are looking seriously at this area, although my conversations didn't touch upon this topic. (I was way to busy pushing my cloud agenda.)

One of the biggest surprises was regardless of the downturn in the markets, Morgan Stanley is on track to spend more then ever on their IT budget. They seem to think that during periods of lower economic activity it gives them a rare opportunity to establish themselves in new areas of emerging technology that my give them a competitive advantage down the road. They also seem to think that their use of technology will directly influence their ability to maintain their lead in the lucrative tech IPO market (which appears to be none existent this year). They went on to say that the companies that emerge during the hardtimes tend to do better in the long term (Think Google). Morgan Stanley is ready to apply this to their own business and I applaud them for it. If I ever go IPO, I know who will represent me!

(Original Post: http://elasticvapor.com/2008/06/banking-on-cloud.html)
--
--

Reuven Cohen
Founder & Chief Technologist, Enomaly Inc.

blog > www.elasticvapor.com
-
Get Linked in> http://linkedin.com/pub/0/b72/7b4
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