17/8/2010

By Sandy Hamilton, vice president, EMEA, EMC Consulting

Sandy Hamilton, vice president of the European, Middle East & African region, at EMC Consulting, explains the drivers for the adoption of private clouds, how they can be implemented and why she believes now is the perfect time to start

It cannot be denied that recent times have created a challenging environment for the financial services sector and this will no doubt continue. One thing, however, has remained constant and that is the need to do more with less. Only now it must be done more intelligently and in the face of greater regulation, under more complex governance, risk and compliance requirements.

Meeting these new challenges is tough but it does give financial institutions a chance to re-evaluate how business is done. It’s also a time when game-changing technologies, such as virtualisation and cloud computing, have become a reality. The question now then is, will business freeze or take action to harness this opportunity?

In a competitive landscape, there is no question in my mind which option will produce the worst outcome. Fortunately, financial services has been at the forefront of new technologies, leaving it enviably well-placed to harness the new and transformative business practices offered by the move towards cloud computing.

As cloud computing enables a business to shift what were upfront capital costs to operational budgets, a concern has lingered over the loss of control over information. Many financial institutions have raised questions over public cloud services. This assessment of the spectrum of cloud computing will continue to play an important part in the journey towards it. And that’s exactly how cloud computing should be viewed – as a journey.

But there is an emerging way of harnessing the benefits of cloud computing without compromising control, or rather implementing an architecture that will allow business to truly take a ‘pick and choose’ approach to cloud computing – namely, by creating a private cloud that combines the efficiency and control of enterprise data centres with the scalability and flexibility of public cloud providers.

The early adoption of virtualisation – a technology that allows firms to abstract IT services from their underlying infrastructure – by financial institutions has established a foundation for private clouds. The potential for this technology was realised by EMC early on when it acquired VMware, a pioneer in virtualisation, in 2003. The rise of server, desktop and application virtualisation has important implications for EMC’s core business of information infrastructure. Moreover, it laid the groundwork for the company’s vision for the private cloud, which is driven by the enterprise demand for both flexibility and control.

Virtualisation, in simple terms, offered a trustworthy path to slashing energy costs and reducing data centre space. More importantly, however, it permitted a re-evaluation of the underlying cost structures within the data centre, allowing the creation of ideal test environments for new applications and ultimately reducing costs that are often more difficult to see. The technology’s endorsement by boardrooms – not just CIO, CTOs and technologists – meant it was ‘game on’ in the race to carve out costs by consolidating server fleets and data centres.

The next phase, delivering the cloud, may however be more challenging. How does one explain the benefits of dynamically provisioning resources from an under-utilised data centre to another at the flick of a switch? Boards understand cost, but they also understand that in today’s world you need to be more responsive and that means having the ability to release new financial products that meet rapidly changing market demands. To enable these core demands to be met, other key elements in the migration to the cloud will be critical. These include refreshing older applications, some of which can’t handle the demands of cloud computing, and equally important, ensuring that, for example, IT operational processes are optimised to reflect the importance of on-demand computing in the private cloud.

What are some practical actions you can take to start achieving these objectives? Assessing the readiness of your IT infrastructure and processes to deliver cloud-based services is a good place to begin. Many firms are also developing financial models and business cases to determine the feasibility of cloud for their operations. Workshops with application and business stakeholders can establish priorities for cloud-enabling applications, align business requirements to IT service levels, and clarify compliance and security requirements.

The sooner you seize the great potential of this disruptive IT technology, the sooner you’ll reap the rewards. It’ll not only transform your data centre but your entire way of doing business.