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CTO Tony Kerrison is moving the bank's IT infrastructure to the cloud, and he'd like you to join him.
November 30
Confusion and lack of a clear definition are still the enemy of cloud computing. Many products are lumped under the label cloud computing that aren't - this is sometimes called "cloudwashing." "What is cloud, really?" asks Bart Narter, senior vice president of Celent. "Regrettably, the answer typically is, 'What do you want it to be?' The cloud is trendy. Everything's being called cloud."To qualify as cloud, a technology must have four things, according to Gartner analyst James Staten: hardware and software standardization, automation, self service and granular accounting. We see four flavors of cloud computing being used in banks.
1. Private Cloud Infrastructure as a Service
WHAT IT IS: Use of shared computing resources such as servers, storage, networks, databases, etc., internally, within the bank's firewalls. It's an example of infrastructure as a service (Iaas), which can also be provided by a public cloud, over the internet. This is also sometimes called an internal cloud, grid computing or data center fabric.
WHO USES IT: Most large banks, including JPMorgan Chase, Morgan Stanley, and State Street.
WHY IT MATTERS: Initially private clouds were formed to increase server utilization - the typical server was only being used to about 20% capacity, to accommodate production spikes. (Virtualization and cloud management software let IT people run multiple operating systems and applications on a single server or stripe them across an array of servers, which greatly raises utilization without compromising the ability to handle a spike in work.) Improved server utilization is still one use case. But as the technology to manage internal clouds has gotten more sophisticated, other benefits have emerged: ease of IT administration, end user self-service provisioning, the ability to very specifically charge end users and departments for exactly the amount of compute they use.
2. Public Cloud Infrastructure as a Service
WHAT IT IS: Infrastructure as a service delivered by an external provider. Rackspace, Amazon and Joyent are among the largest, mainstream providers. Egnyte offers hybrid cloud services for storing files and data on the internet; it's partially housed by Amazon. The New York Stock Exchange this summer launched a public cloud for traders.
WHO USES IT: Banks use public infrastructure as a service for application development and testing, risk analysis, customer analytics, backup, business continuity, marketing and mobile banking applications from a public cloud.
WHY IT MATTERS: True public cloud implementations let companies "pay by the drink," paying precisely by the hour for their use of the provider's resources. "It's very cost effective to have all this capacity but not have to pay for it unless you use it," says Narter. "If you think about having to run a whole other data center just in case your main data center is out, that's a wonderful usage for iaas. I also see it as very useful for analytics, where you have very spikey usage and bring a lot of processing to bear just when you're doing the analysis." Using the public cloud relieves IT of all maintenance and support duties, and provisioning a new user is quick and painless.
It also gives users access to resources their internal IT department may never be able to deliver. "A smaller bank may never have been able to compete with a bigger bank around trade sophistication because it would require too many resources to build a massively scalable trading engine that can look at billions of trades taking place at once and identify the patterns like a needle in a haystack," says Staten. "Now they can go to the cloud and fire up an application and within a couple of hours, scale to 10,000 virtual machines and scan terabytes of data, identify the pattern they're looking for and leave, for as little as $500."
3. Software as a Service
WHAT IT IS: Software delivered through the internet, typically used within a web browser. Salesforce.com is probably the best-known and most-used example
WHO USES IT: Many banks, including Morgan Stanley, use Salesforce.com's cloud-based customer relationship management software. Microsoft says banks are among the customers of its Windows Azure cloud for delivering Office applications (Jack Henry is acting as a reseller).
WHY IT MATTERS: Banks can lower costs immediately by using software as a service; they trade the capital expense of buying a new program outright for a monthly software rental fee. Also, IT does not have to develop or maintain the software.
4. Platform as a Service
WHAT IT IS: Receiving not just base-level server and storage over the internet, but software layers in addition, such as operating systems and databases. "Platform as a service is a different point of abstraction," Staten says. "When you use software as a service, the point of abstraction is the application, the service provider takes responsibility for the application and everything below that. In infrastructure as a service, the line of abstraction is the virtual infrastructure -- the virtual machine, the storage and the network they provide to you and they take responsibility for everything below that. Platform as a service is between the two, it abstracts the middleware and everything below that. So if you're an application developer who knows Java, you can be productive in creating a custom app on a platform as a service knowing nothing more than Java. You don't need to know how to configure the middleware. You don't need to know how to configure the infrastructure, you don't need to know how to set up the operating system. None of those are your responsibility in platform as a service."
WHO USES IT: Several banks use Microsoft Windows Azure to build .net applications.
WHY IT MATTERS: "You can build the same types of applications with platform as a service as you can with internal resources," Staten says. "You just get a higher degree of productivity out of a larger number of your developers."
