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The cloud naysayers get their highs by claiming that banking sector will never embrace cloud. But, to their dismay, banking sector was much more open to the idea of cloud computing than many expected. This trend is only continuing to improve as more and more financial institutions invest in cloud infrastructure. Even though I cannot officially quote publicly, I know of instances where large financial institutions are testing OpenStack (previous CloudAve coverage), the open source infrastructure project, for eventual deployment. The news that came out from ING and Deutsche Bank confirm this trend.
Tony Kerrison, CTO of ING, is building a large hybrid cloud which will not only let other banks use the cloud but will also set the standard which will help players in the financial industry embrace cloud seamlessly. With $1.7 trillion assets and a mandate to tap into non commodity infrastructure (from the likes of IBM, Hewlett-Packard, Cisco, VMware and EMC) to build scalable on demand cloud infrastructure for financial institutions, they are on the right path. According to American Banker website,
ING’s project involves building a large hybrid cloud that combines features of public clouds and private data centers, one it will open to other banks to use. The hybrid or shared IT infrastructure, Kerrison believes, will achieve the variable costs, scalability, flexibility, and on-demand availability offered by public cloud computing in a way that addresses the security, compliance and performance requirements banks adhere to in their internal clouds.
Currently only 5% of INGs applications run on the cloud but it is expected to increase multi-fold in the coming year(s).
According to ComputerWorld, Deutsche Bank, the German investment bank, is almost ready to take their cloud infrastructure live. The company which won the Open Data Center Alliance prize recently for their work on identity management for hybrid cloud world, has developed an infrastructure platform which will let developers deploy 2000 VMs at a time.
The German investment bank, which has a substantial presence in the City of London, has developed an Infrastructure as a Service (IaaS) development platform, due to go live this month.
The aim of the new platform is to enable developers to rapidly create and deploy virtual environments, running up to 2,000 VMs at any one time. These are supported by a variety of collaboration and knowledge management systems.
The VMs are available for development in Microsoft Windows, Unix, Solaris and Linux environments.
Though their platform is not a cloud solution like EC2 where you will be able to spin up instances instantly, they are optimizing their infrastructure to mimic cloud like capabilities (which I see as the first step in any move to cloud).
In short, even though financial organizations are not jumping into AWS kind of public cloud services, they are warming up to the idea of private and hybrid clouds. Once they find value in the cloud like environments and work out any technical and regulatory kinks, we can see increased cloud adoption. If ING’s attempt gets traction, we are going to see more and more financial institutions embracing hybrid cloud.
Update: Corrected a mistake about IDG’s project size.
Nice article. It shows that people who look at the cloud without emotion can make rational decisions. The cloud is an operational model, for anyone to say “…blah.. will never embrace the cloud” shows a lack of understanding as to what cloud is, as well as why people will consider it.
As you point out, folks in the financial sector are starting to understand some of the benefits of the cloud model, and they want to leverage those benefits. They will start with more conservative models (e.g., priviate cloud), and I am happy with that decision (make your mistakes at home), then down the road they will figure out where public cloud makes sense.
Thanks for the post and insight into that industry. Nice to see they are making progress.
Krish, good post. We’ve actually seen Apprenda installations strong and well in the financial services sector. They seem to be an aggressive bunch with respect to figuring out how cloud, and interestingly enough, PaaS, fits their IT model. We’ve seen that the scale at which banking IT operates is one of the main drivers of this. We’re excited to see the pace of adoption continually improve.