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I. Benefits & Challenges of Cloud Computing
i. Why Use the Cloud? ii. Cost Savings iii. Flexibility/Scalability iv. Maintenance v. Green Benefits vi. Concerns and Challenges of Cloud Computing vii. Oversubscription & IT Support
II. Understanding Public, Private and Hybrid Cloud Infrastructures III. Hosted Business Applications: What Financial Firms Must Consider
i. Hosted Apps for Business: An Overview ii. Key Considerations iii. Understanding of Business Requirements iv. Security of Data v. Migration/Future Growth Concerns vi. Other Considerations vii. Final Thought on Hosted Apps
With IT budgets tightened over the past year, many investment firms have had to make changes to their businesses. Personnel changes, budget adjustments, and other tough decisions had to be made along the way. Both staff and systems were often being closely evaluated. Beyond existing firms, new start ups are entering an investor market that expects them to have sophisticated processes and operations day one. More than any other industry, investment firms rely on premier technology for swift trade execution, secure data protection and much more. If it is determined that the IT budget needs to be reduced, the question is how? What is the best way for an investment firm to save on IT costs but without sacrificing efficiency and performance? Alternatively, how can a investment start-up have enterprise-level technology day one with a small firm operating budget? The answer is cloud computing, and believe it or not, cost isnt the only reason firms are making the switch.
Cost Savings
There is no question that migrating to a cloud computing model can render significant cost-savings for an investment firm. Rather than purchasing costly infrastructure and relying on multiple servers in a crowded Communications room (comm. room), firms can outsource that infrastructure to a third-party and manage all of their data and applications from a simple web address on the Internet. This system is particularly beneficial to start-up firms who may not have the upfront capital to invest in their own infrastructure or the staff to maintain and monitor a comm. room.
Flexibility/Scalability
One of the most beneficial aspects of cloud computing is that firms are only required to pay for the resources and capabilities they need. With traditional infrastructure models, firms must invest in advanced servers and storage devices that generally come at fixed costs. Cloud computing is uniquely flexible and scalable, operating on a utility basis - allowing firms to pay as they go and only for the resources they will use. In many cases, firms can take advantage of advanced mobility features through which they can access their hosted applications and data from anywhere at any time, freeing employees from having to remain at their desks during normal business hours. Because the cloud computing solution is virtualized, there are other distinct advantages not offered by traditional infrastructure models. Space, storage, and RAM are quick and easy to add. There is no need to wait for quotes to be drafted and equipment to be ordered and shipped. Instead of taking days, your firms needs are fulfilled in a matter of hours. Cloud computing also supports a sharing of resources among multiple users also known as multi-tenancy which allows for increased utilization and efficiency.
Less Maintenance
Unlike traditional infrastructure models where the firm is solely responsible for its own IT needs, the cloud computing model puts all of the responsibility on the third-party provider. Firms are no longer tasked with managing constant server updates, hardware installs and other computing issues. This allows the firms internal IT staffs to focus on more business-critical matters and spend less time on mundane and time-consuming maintenance issues. Or in the case of many smaller firms without internal IT staffs, it saves them from having to hire and train additional employees.
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Green Benefits
The idea of using the Internet as a gateway to technology has significant environmental benefits. The resources and energy needed to maintain and manage a dedicated comm. room can be astronomical. Power, cooling, and basic energy supply equipment must be at peak performance at all times in order to facilitate maximum uptime for investment firms. In the case of cloud computing, however, firms dont need to host internal equipment, thereby saving on allaround energy costs. The reduction of overall energy consumption is also multiplied with third-party providers utilizing custom data centers specifically designed for better energy efficiency. Additionally, many new computers are now optimized for virtualization, adding another layer of efficiency and using significantly less power for operation.
Privacy and security concerns are common among financial firms given the sensitivity of their data. The idea of hosting this sensitive information on the Internet is not always a comfortable one. Third-parties that provide cloud computing services, however, are quick to point out that the system is just as secure as maintaining ones own equipment, with comparable data protection measures, firewalls, security checkpoints and passwords as traditional infrastructure models. Performance concerns, as well, seem to be easily thwarted by third-parties, who insist cloud computing is just as efficient and effective as non-web hosted systems. Despite concerns, over the last couple of years financial firms have become more comfortable with the idea of cloud computing, particularly given its price point. With the economic climate as it is, the cost-effectiveness of cloud computing has proven to be one of its strongest motivators. Technology analyst firm Gartner Inc. concluded that spending on cloud computing and virtualization solutions has increased, despite a decrease in overall IT spending in 2009. According to Gartner, cloud computing revenue is on pace to exceed $56 billion this year, an increase of 21 percent from 2008 (Wall Street Journal, 10/21/09). When considering cloud computing, a firm must rely on its own needs and resources in order to determine which technologies are best for them. There are a number of factors to be considered: cost, efficiency, maintenance, etc. Firms should assess their individual needs and determine the best strategy based on their current resources and requirements. In the following chapter we will look at the differences between public, private and hybrid clouds.
Public Clouds
Public clouds are owned and operated by third party service providers. Customers benefit from economies of scale, because infrastructure costs are spread across all users, thus allowing each individual client to operate on a low-cost, pay-as-you-go model. Another advantage of public cloud infrastructures is that they are typically larger in scale than an in-house enterprise cloud, which provides clients with seamlessly, on demand scalability. It is also important to note that all customers on public clouds share the same infrastructure pool with limited configuration, security protections, and availability variances, as these factors are wholly managed and supported by the service provider.
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Private Clouds
Private clouds are those that are built exclusively for an individual enterprise. They allow the firm to host applications in the cloud, while addressing concerns regarding data security and control, which is often lacking in a public cloud environment. There are two variations of private clouds: 1. On-Premise Private Cloud: This format, also known as an Internal Cloud, is hosted within an organizations own data center. It provides a more standardized process and protection, but is often limited in size and scalability. Also, a firms IT department would incur the capital and operational costs for the physical resources. This model is best used for applications that require complete control and configurability of the infrastructure and security. 2. Externally Hosted Private Cloud: This private cloud model is hosted by an external cloud computing provider. The service provider facilitates an exclusive cloud environment with full guarantee of privacy. This format is recommended for organizations that prefer not to use a public cloud infrastructure due to the risks associated with the sharing of physical resources.
Hybrid Clouds
Hybrid Clouds combine the advantages of both the public and private cloud models. In a hybrid cloud, a company can leverage third party cloud providers in either a full or partial manner. This increases the flexibility of computing. The hybrid cloud environment is also capable of providing on-demand, externally-provisioned scalability. Augmenting a traditional private cloud with the resources of a public cloud can be used to manage unexpected surges in workload. At Eze Castle Integration, we have deployed a robust, scalable cloud Infrastructure in multiple Tier III and IV data centers. Our Eze Cloud infrastructure leverages best of breed technologies to deliver cost effective infrastructure as a service powered solutions to the investment industry. Now lets look at application hosting in the cloud and what firms should consider.
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Key Considerations
While Googles price point is likely the lowest a business will find, the level of service offered at that price must be thoroughly vetted before entering into an agreement, particularly if you are an investment firm operating in todays market. There are a number of specific considerations that should be taken into account beforehand.
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Compliance of Data
One of the foremost concerns when any business puts their data and infrastructure in the hands of a third-party is security. Google lists security and compliance as one of the key features of their product, and did eventually bring on e-mail security provider Postini to provide additional security services. These services are basic, though, offering tools to eliminate spam, protect against internal information leaks, and retain emails. These tools are sufficient for small mainstream businesses; however, investment firms require increased compliance measures, including email archiving and encryption, on a daily basis. E-mail is a business-critical application for many firms and basic security is not enough. As we move into an era of increased transparency and calls for strict compliance regulations, firms will require significant security and compliance measures to keep their data protected, encrypted or archived at all times.
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In addition to concerns about the service provider oversubscribing servers, firms might also want to consider the possibility that their employees will likely be spending a significant amount of time learning how to use a hosted application service. For example, if a firm signs on to use Google Business Apps, they will need to train all employees to use that service and likely train internal IT employees to become well-versed on the service in the event of application issues. Though Google boasts that it offers 24x7 customer support for its apps service, it is far from a typical helpdesk. Customer support through an entity like Google is often challenging to navigate and time-consuming to get another human being on the opposite end of the phone. In the event of a serious IT issue, end-users employees will need to have an extensive understanding of the hosted service in order to provide adequate support. Alternatively, if a firm does not have IT staff, other employees will need to learn to solve problems on their own, which can interrupt the time they are spending on their daily business tasks. In a CNN Money article, Founder Jonathan Blum of Blumsday LLC, a business-tobusiness tech content company, wrote about how Google Apps wasnt working for his company. Blum said he and his employees were spending too much time each day resolving issues. Youre paying people while they struggle through this cultural shift to Web-based applications and that can be very costly.
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Other Considerations
Blum also highlighted another issue he encountered when he relied on Google Apps for his business services: identity concerns. Because Google is entirely web-based and allows for multiple email accounts through its service, it can lead to identity confusion. There can be easy confusion between corporate and personal Gmail accounts. Also, if employees share computers, they will need to be extra cautious and careful not to save their account logins and passwords on shared portals. Investment firms should also be thinking about the kind of best practices they are employing. Business continuity and disaster recovery plans are becoming near-requisites for most investors. Mass-marketed hosted applications typically do not include such services. Firms would, therefore, have to work with two separate third-parties to accommodate this desired outcome.
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Data center tiers are becoming increasingly important as investment firms look to cloud computing infrastructures to increase agility, reduce operating costs, and simplify IT infrastructure and application management. Our Eze Cloud infrastructure is built across multiple Tier III data centers to deliver the availability and performance investment firms require. As a financial firm evaluates its data center options for colocation or explores why cloud computing may be right for the firm, it is essential to understand the differences between each tiers.
Eze Castle Integration's Cloud Computing & Hosting Infrastructure for Financial Firms
Eze Castle Integration has deployed a robust, scalable Cloud Infrastructure in multiple Tier III-class data centers. Our Eze Cloud infrastructure leverages best of breed technologies from Cisco, NetApp, and VMware as well as monthly software leasing services from VMware, Microsoft, CA, and Citrix to deliver cost effective managed product offerings and custom solutions to our financial firm clients. Eze Castles cloud offerings allow our clients to deploy state-of-the-art technologies through a monthly recurring cost model rather than facing the challenge of major capital expenditures and budgeting for hardware and software upgrade lifecycles. A few of the primary benefits of the Eze Cloud infrastructure include: Redundancy Secure Multi-Tenancy Resource Provisioning Expandability Professional Management For more information on our Eze Cloud Infrastructure, please visit http://www.eci.com/solutions/infrastructure/ cloud.html.
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Business Continuity Planning Disaster Recovery Compliance Solutions Storage Solutions Colocation Services Internet Service E-Mail & IM Archiving
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