Savvis IT Infrastructure2013 Global IT Leadership Report                                   CIO Strategies in 2013         ...
The Future is Hybrid CloudIn 2013 the Pressure’s Not Easing Up for                      The right approach requires a deci...
Reinventing Financial Services ITDelivery Models in the Cloud                                    Figure 1:Cloud computing ...
Financial Services Industry —Cloud Computing Usage                                           Figure 4:The CIOs surveyed re...
Interestingly, there is a significant difference in the       Thomas states that similarly a large universalapplications m...
McCreath suggests most large financial services               2.  ecurity levels drive the cloud architecture             ...
Conclusion                                                    About SavvisThrough our ITO and Cloud computing survey,     ... Headquarters Asia Pacific                        Canada                   EMEA                     ...
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CIO Strategies in 2013 - Cloud Computing for Financial Services


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CIO Strategies in 2013 - Cloud Computing for Financial Services

  1. 1. Savvis IT Infrastructure2013 Global IT Leadership Report CIO Strategies in 2013 Cloud Computing for Financial Services
  2. 2. The Future is Hybrid CloudIn 2013 the Pressure’s Not Easing Up for The right approach requires a decision to be madeFinancial Services CIOs between buying or building the infrastructure yourself; running your own data centre or usingGlobal financial services companies everywhere that of a provider. Thomas recommends thoseare facing increased market pressure. They need considering doing it themselves, should askto be able to compete and grow, despite a tough whether they will be able to deliver the samecommercial outlook and slow economic growth, levels of security and performance, and whethermade harder by minimal government investment this is the best use of their time.and a general feeling of uncertainty in most of thefinancial centres across the world. “IT leaders also need to ask themselves how IT departments can make the most of their legacyCIOs of financial services organisations are feeling investment and adopt new technology in parallel,”the pressure. By aligning IT functions closely continues Thomas. “Along with questioningto the business, technology has become the what they should outsource and which cloudengine that drives financial institutions forward, deployment provides the best route ahead.”and the road has become bumpy. Independentresearch*, conducted by Savvis, tells us the topthree priorities for CIOs in global financial services IT Outsourcing and Cloud Strategies —organisations are increasing collaboration; the Benefits are Clearrefocusing resources to create competitive Savvis research reveals IT Outsourcing as oneadvantage; and gaining greater efficiencies across of the ways financial organisations could meetthe organisation. the challenges of a constrained IT budget whilst seeking to improve collaboration and efficiency; and enhancing their competitive position. In fact, Three Key Priorities for Financial Services the cost savings financial services CIOs expect to CIOs in 2013: gain from outsourcing are as much as 26 percent 1. ncrease collaboration across the organisation I of IT budget. It’s not surprising therefore, that 2. efocus resource to align to projects that R outsourcing is predicted to grow from the current create competitive advantage level of 25 percent of IT infrastructure, to a global 3. ain greater efficiencies across the G financial industry average of 40 percent by 2017. organisation Heads of IT in financial services organisations are very clear on the benefits of outsourcing. TheyThe challenge for CIOs is intensified as achieving told us the top reasons they need to increase thethese objectives is impacted by budget constraints amount of IT infrastructure they outsource are to:and, since IT is the engine that drives the business • mprove IT infrastructure agility to better iforward, CIOs need to drive efficiencies. address the changing needs of the business •  efocus on core strengths to help gain rVarghese Thomas, Global Head of Financial competitive advantageServices at Savvis, believes the knock on effect is •  liminate dependence on legacy infrastructures ethat IT leaders across all finance sectors are under •  ealign expenditure from CapEx to OpEx rpressure to rethink business models. “CIOs need •  mitigate the risks of reinvent the way IT serves the business, as theystrive to build a flexible, open, scalable infrastructure “It’s clear financial services CIOs expect a lotthat responds to any demand,” he explains. “The from outsourcing,” says Varghese Thomas,challenge is to find the right approach.” “And they’re turning to outsourcing and cloud computing as a way to gain greater flexibility, scalability, innovation and market strength.”2013 Global IT Leadership Report: Cloud Computing for Financial Services 2
  3. 3. Reinventing Financial Services ITDelivery Models in the Cloud Figure 1:Cloud computing offers compute resource on a Does your company use clouduser and per usage basis often with no fixed term computing?contract or up-front fees, and can be used for 50individual projects, by department or function, orthroughout an entire organisation. This type of 40delivery model is also known as utility computingand can be deployed within a private cloudinfrastructure to assure security, privacy of data 30and SLA driven performance targets, or a publiccloud infrastructure where cost reduction and 20capacity spikes are the priority.In his role as Director of Cloud Solutions at Savvis, 10Andrew McCreath is regularly on site workingwith large enterprises. “The challenge is that most 0of them have legacy solutions with ageing orrecently re-invested, infrastructures so they still Yes, we use ‘private’ cloud services Yes, we use ‘public’ cloud servicesneed to own on-premise IT equipment and use Yes, we use a hybrid model of part private/public cloudcolocation and other physical services,” he says.“As a result, a hybrid data centre environment IT leaders cited the two most important benefitshas been created, combining in-house services, of cloud computing as scalability and the ease ofcollocated services, hosted services and public increasing or decreasing compute, storage andand private cloud computing”, continues McCreath. bandwidth consumption to match fluctuating demand which is often unpredictable, as well asMcCreath advises financial services CIOs to select to increasing the reliability of the IT infrastructurea service provider that has capability across the (35% and 28% respectively).hybrid value chain from colocation, managedhosting, private and public cloud, as well asnetworking and consultancy services. “Without Figure 2:these”, he adds, “IT operators in an organisationwill be seen as ‘infrastructure-tool-selectors’ for Please select the two most importantthe financial applications, as opposed to value benefits of cloud computingcontributors to the industry, truly leveraging Cloud 24%Services Providers and their capabilities”.Financial services CIOs from both buy and sellsides of the industry understand cloud economicswell, and from the industries surveyed, whichinclude media, public sector, healthcare and 27% 35%software, the financial services industry is thethird sector to have adopted cloud technology,along with the software and healthcare sectors.By divesting the responsibility of a complexbut commoditised IT infrastructure to focus ongenerating core business value, IT departments 28%and the business can only benefit and strengthentheir position. Forty-six percent of IT heads of 35% ability to scale up and down computer, storage andfinancial services companies use private cloud bandwidth consumption to manage fluctuating demand 28% improved reliabilityservices, 21 percent use a hybrid model of part 27% environmental considerations e.g. reduced powerprivate and public cloud services and 19 percent use and CO2 emissionsonly use a public cloud service. 24% enhanced security2013 Global IT Leadership Report: Cloud Computing for Financial Services 3
  4. 4. Financial Services Industry —Cloud Computing Usage Figure 4:The CIOs surveyed represented large global Which applications are you evaluatingfinancial institutions of between $1billion and for the cloud?$100billion, typically with large application sets, ahigh degree of customisation and tight integration Batch Processinginto back-end systems and applications. Fromthe range of applications that IT could potentiallyoutsource, heads of IT are choosing those that Test and Developmentare the most portable and easily separated fromexisting systems. These applications are oftennon-mission critical, and viewed as an overhead, Big Data andso reducing the cost of maintenance is highly Analyticsdesirable: 56 percent of IT heads use cloudcomputing for email, 56 percent for intranet, and43 percent for ERP applications. Mission Critical Applications Figure 3: Which of the following applications 0 10 20 30 are you currently putting in the cloud? For some applications, financial services CIOs Email have completely committed to cloud computing based on a private cloud deployment. Nineteen percent of financial IT leaders are outsourcing Intranet their entire storage application to the cloud, 18 percent are outsourcing big data and analytics to the cloud and 16 percent outsource all their Enterprise Resource mission critical applications to the cloud. Figure Planning 5. This demonstrates a high level of confidence and trust in cloud computing’s performance, particularly for those financial institutions that run Website Microsite important mission critical applications and core business functions in the cloud. 0 10 20 30 40 50 60 Figure 5: For which applications does yourWhen asked what applications IT leaders are company use private cloud throughoutevaluating for the cloud, 29 percent said batch the organisation in this area?processing of large quantities of data, for example,consumer transactions within retail banks orprocessing claims for insurers. Twenty-seven Storagepercent said Test and Development, perhapsin recognition of the flexibility and scalabilityit offers, as well as the ability to turn cloud Big Data and Analyticsservices on and off quickly. Twenty-four percentare evaluating cloud for big data and analytics,leveraging the scalability of cloud providers to Mission Critical Appsmanage terabytes to petabytes of data easily, 0 10 20and 24 percent for mission critical applications,relying on the robust security of enterprise cloudsolutions, high availability and back up options.2013 Global IT Leadership Report: Cloud Computing for Financial Services 4
  5. 5. Interestingly, there is a significant difference in the Thomas states that similarly a large universalapplications moved to public cloud infrastructures. bank will have operations covering most areas ofNine percent of financial CIOs outsource all their financial services, such as retail, institutional andnon-mission critical applications to the public proprietary trading and broking etc., but as theircloud, 8 percent outsource back up and disaster IT infrastructure is large and complex, they will berecovery and 7 percent outsource all their storage likely to run a hybrid cloud model and select specificto the public cloud. areas that make sense to migrate to the cloud.“The variance between the two is because public Enterprise Grade Cloud Security forcloud infrastructures are shared and potentially Financial Servicesless secure than dedicated cloud,” explains Andrew In the quest to rethink and reinvent IT deliveryMcCreath. ”The good news is that financial services models, Andrew McCreath, believes that globalIT leaders are starting to have a better understanding financial services CIOs are investing more inof public and private cloud infrastructures, which the cloud and will continue to do so. ”Yet whenapplications suit which deployment model, asked why some IT leaders are not using cloudand what is the optimum mix to balance cost computing, they tend to cite concerns aroundefficiency with enterprise grade security.” security, legal and compliance,” he adds. Figure 6: Figure 7: Which applications does your company What are the reasons for not using cloud use public cloud throughout the computing within your company? organisation in this area? 60 Non-mission Critical Apps 50 Back Up and 40 Disaster Recovery 30 Storage 20 0 5 10 10Varghese Thomas, Global Head of FinancialServices at Savvis, continues to see increased 0confidence in cloud services from all segments of Security concerns Legal/compliance issues about processing workloadsthe financial services sector. ”Each of the financial in an unknown geographic locationservices segments is adopting a private, publicor hybrid cloud environment according to theirspecific business requirements and the proprietary Financial services CIOs and Heads of Complianceand sensitive nature of their data,” he explains. are particularly worried about the security of sensitive customer and other data being shared“A commercial bank or credit union will have with unauthorised third parties who reside on thedifferent requirements and propensity to use the same cloud infrastructure, as well as breaches ofpublic cloud, than a broker running algorithmic data protection through processing data outsidetrading strategies. A commercial bank may deploy of an authorised jurisdiction. Fear of data securitya public cloud for commoditized, non-proprietary has been caused in part by the many mass marketcontent such as hosting their website, whilst a cloud solutions available; which do not offer thebroker may not, due to proprietary nature and high standards of security or SLAs which aresensitivity of their data.” available from enterprise cloud providers such as Savvis. It is also true that high profile attacks on cloud sites receive wide publicity, encouraging the perception that cloud computing is not secure.2013 Global IT Leadership Report: Cloud Computing for Financial Services 5
  6. 6. McCreath suggests most large financial services 2.  ecurity levels drive the cloud architecture Sfirms have very complex IT infrastructures Next, financial services organisations shouldbuilt up over a period of time, with multiple review the data that will be stored, transmittedinterdependent applications and systems. As and processed in the cloud, classify it anda result, cloud adoption requires a planned understand the level of security that must beapproach and usually takes place in stages and applied. The level of data security will dictate theover a period of time, as IT leaders learn more cloud architecture, public or private, and theabout cloud operation and the IT infrastructure delivery model: Software-as- a-Service (SaaS),is evaluated, configured and made ready for a Infrastructure-as-a-Service (IaaS), Platform-as-deeper cloud migration. a-Service (PaaS), as well as the service provider and security controls used. Proprietary and“Cloud adoption is essentially a journey of discovery sensitive customer data needs the highest levelon the one hand, evaluating and preparing the IT of security that in most cases, only a privateinfrastructure on the other,” continues McCreath. enterprise-class provider could offer.“Once CIOs have a better understanding of the McCreath advises that the type of applicationcloud and have organised their IT Infrastructure determines the cloud architecture and theinto a cloud portable state, they will quickly see classification of the data determines thethe benefits and move to the next stage of cloud delivery model. “At Savvis, we recommendadoption: a hybrid model that offers private and highly critical or protected data is best suitedpublic cloud, with the ability burst into the public for private clouds, and non-critical, unprotectedcloud when the need arises.” data is most economically managed in a public cloud, where infrastructure is shared,” he adds.What to Consider when Selecting anEnterprise Cloud Provider Hybrid clouds offer financial institutions greater control enabled through private clouds,1.  ybrid cloud solutions provide optimum H combined with cost savings enabled through a performance public cloud. An example of this might be an Number one on the selection criteria is a online bank placing its catalogue of products provider that offers a hybrid cloud solution and other public facing marketing content on of public, multi-tenanted cloud services for a public cloud, but choosing to place customer commoditised content and non-sensitive data, information, ordering systems, and other and private cloud services for proprietary and private information on a private cloud. sensitive data requiring a high level of security. IT leaders then have the control to choose the “I’m confident that our data is safe in the cloud, optimum mix of colocation, private and public we don’t have to internally worry about backups.” cloud deployment to meet the end-to-end 2012 Survey Respondent business requirements, security, privacy and performance. 3.  ecurity controls are key S The last stage in ensuring enterprise-class cloud As a starting point, Andrew McCreath security; is to select a provider that can offer the advises financial services CIOs to review the full range of security controls: firewalls, intrusion applications to be moved to the cloud. “Not detection and prevention, log management, all applications are suitable for the cloud,” he application and API protection, database explains. “For example some corporate and protection, identity and access management, ERP applications are so embedded into existing encryption, vulnerability scanning and infrastructures that it’s simply impractical to penetration testing and DDoS mitigation. migrate them to the cloud in their current form, whereas other applications could easily be adapted for the cloud.”2013 Global IT Leadership Report: Cloud Computing for Financial Services 6
  7. 7. Conclusion About SavvisThrough our ITO and Cloud computing survey, Savvis, a CenturyLink company, is a global leaderCIOs of financial services organisations told us in cloud infrastructure and hosted IT solutionsthey are under pressure to squeeze more and for enterprises. Nearly 2,500 unique clients,more value out of their IT infrastructure, and including more than 30 of the top 100 companiesthat they’ve turned to cloud computing to help in the Fortune 500, use Savvis to reduce capitalthem do that. In their quest to drive the business expense, improve service levels and harness theforward they’re having to build an open, flexible, latest advances in cloud computing.scalable and cost effective IT engine that deliversall the advantages technology can offer. For more information: Call us on +44(0)207 400 5600 email us at:Financial services IT leaders have increased cloud or visit us atcomputing usage and continue to do so, but are on a journey. Despite some fears arounddata security, the risk of compliance and the About the Researchcomplexities of migrating legacy IT infrastructure This independent survey was commissioned byto a cloud model, heads of IT in financial Savvis and conducted with 550 CIOs, IT Directors,services are becoming more knowledgeable Heads of IT and Senior IT Managers of globaland confident about cloud computing, have a enterprises based in the USA, UK, Germany,better understanding of the public cloud, and are Japan, Hong Kong and Singapore. 35% of therealising how they can combine the two. audience was from financial services companies with more than 500 employees and global annualWhat’s fast emerging is a hybrid cloud for financial revenue between $1billion and $100billion. Theservices. A cloud world where financial services research used a combination of online fieldworkCIOs will control what’s proprietary and core and methodology and telephone interviewing and wastherefore what should reside in a private cloud, conducted by Vanson Bourne, a research basedand what’s non-proprietary or a commodity, and technology marketing consultancy committed tocan be outsourced to a public cloud. An enterprise the latest MRS Code of Conduct.hybrid cloud combines the security, performance,flexibility and scalability demanded by financialinstitutions, usually at significantly reduced costand optimum performance levels. 2013 will be theyear of the hybrid cloud for financial services.Find your solution with SavvisFinancial services organisations around the worldhave turned to Savvis to help them achieve theIT infrastructure they need to excel in today’sconstantly changing and competitive financialmarkets. Savvis will help to you make theright decisions about how and where to houseyour data and infrastructure. Using a blend ofcolocation, managed hosting and public andprivate cloud services, we can ensure you achievethe efficiencies you’re looking for, the agility yourbusiness demands, and the focus on what addstrue value to your organisation.2013 Global IT Leadership Report: Cloud Computing for Financial Services 7
  8. 8. Headquarters Asia Pacific Canada EMEA Germany Japan1 Savvis Parkway 50 Raffles Place 6800 Millcreek Drive Eskdale Road Westhafenplatz 1 7th FloorSt. Louis, MO 63017 Singapore Land Tower Mississauga, ON Winnersh Triangle 60327 Frankfurt am Main Kyodo Building #13-01 L5N 4J9 Wokingham Germany (Jinbocho 3cho-me)Tel 1.800.SAVVIS.1 Singapore 048623 Berkshire RG41 5TS 3-29 Kanda Jinbocho(1.800.728.8471) Tel 1.877.387.3764 United Kingdom Tel +49 69 710456 156 Tel +65 6768 8000 Tokyo 101-0051 Tel +44 (0)118 322 6000 Japan Tel +81.3.5214.0151© 2013 CenturyLink, Inc. All Rights Reserved. The Savvis mark, logo and certain Savvis product names are the property of CenturyLink, Inc.All other marks are the property of their respective owners. -1-