Cloud Computing for Banks.doc
Upcoming SlideShare
Loading in...5

Cloud Computing for Banks.doc






Total Views
Views on SlideShare
Embed Views



0 Embeds 0

No embeds



Upload Details

Uploaded via as Microsoft Word

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
Post Comment
Edit your comment

Cloud Computing for Banks.doc Cloud Computing for Banks.doc Document Transcript

  • Cloud Computing for Banks For quite some time now, organizations have sought quicker, better and cost effective business models in the areas of application development, deployment and management. Rapid changes in business computing models - from fixed (static) to dynamic are forcing enterprises to look for innovative models and architecture. Though technologies like conventional grid computing, virtualization, utility computing, dedicated servers and SOA offer partial solutions, these alone are not enough to achieve greater scalability, agility, reliability, fault tolerance, and better management capabilities for enterprise infrastructure and the applications that run on it. Cloud computing, which is the convergence of these independent technologies, resulting in a new computing paradigm, attempts to counter these challenges. What is cloud computing? Cloud computing provides the facility to access shared resources and common infrastructure, offering services on demand over the network to perform operations that meet changing business needs. The location of physical resources and devices being accessed are typically not known to the end user. It also provides facilities for users to develop, deploy and manage their applications ‘on the cloud’, which entails virtualization of resources that maintains and manages itself. Some generic examples include: • Amazon’s Elastic Computing Cloud (EC2) offering computational services that enable people to use CPU cycles without buying more computers • Storage services such as those provided by Amazon’s Simple Storage Service (S3) • Companies like Nirvanix allowing organizations to store data and documents without adding a single on-site server • SaaS companies like delivering CRM services, so clients can manage customer information without installing specialized software Within the next five years, the annual global market for cloud computing is expected to surge to $95 billion. Reports estimated that 12 percent of the worldwide software market would go to the cloud in that period. Analysts believe that by 2011 the volume of cloud computing market opportunity will amount to $160 billion, including $95 billion
  • in business and productivity applications (e-mail, office, CRM, among others) and $65 billion in online advertising. Research indicates that IT spending towards cloud computing is expected to grow at an annual rate of 27 percent as compared to an annual growth rate of 7 percent for overall IT spending, between 2008 and 2012. Characteristics of cloud computing Cloud computing, typically entails: • High scalability Cloud environments enable servicing of business requirements for larger audiences, through high scalability • Agility The cloud works in the ‘distributed mode’ environment. It shares resources among users and tasks, while improving efficiency and agility (responsiveness) • High availability and reliability Availability of servers is high and more reliable as the chances of infrastructure failure are minimal • Multi-sharing With the cloud working in a distributed and shared mode, multiple users and applications can work more efficiently with cost reductions by sharing common infrastructure • Services in pay-per-use mode • SLAs between the provider and the user must be defined when offering services in pay per use mode. This may be based on the complexity of services offered • Application Programming Interfaces (APIs) may be offered to the users so they can access services on the cloud by using these APIs • Support for all service oriented applications Comparison with related technologies Several technologies are related to cloud computing, and the cloud has emerged as a convergence of several computing trends. It seeks to address certain key aspects that may have been lacking in each of these trends, individually. The features of each of these related technologies and how they compare with cloud computing has been outlined in the table.
  • Types of cloud computing environments The cloud computing environment can consist of multiple types of clouds based on their deployment and usage. Public clouds This environment can be used by the general public. This includes individuals, corporations and other types of organizations. Typically, public clouds are administrated by third parties or vendors over the Internet, and services are offered on pay-per-use basis. These are also called provider clouds. Business models like SaaS (Software-as-a-Service) and public clouds complement each other and enable companies to leverage shared IT resources and services. • Example New York Times archive project which used 100 Amazon EC2 instances and 5.5TB of S3 storage to generate PDFs of 11 million articles for the paper’s archives, at a small fraction of traditional costs • Advantages • Public clouds are widely used in the development, deployment and management of enterprise applications, at affordable costs • Allows organizations to deliver highly scalable and reliable applications rapidly and at more affordable costs • Limitations Security is a significant concern in public clouds Private clouds This cloud computing environment resides within the boundaries of an organization and is used exclusively for the organization’s benefits. These are also called internal clouds. They are built primarily by IT departments within enterprises who seek to optimize utilization of infrastructure resources within the enterprise by provisioning the infrastructure with applications using the concepts of grid and virtualization. • Advantages • They improve average server utilization, allow usage of low-cost servers and hardware while providing higher efficiencies; thus reducing the costs that a greater number of servers would otherwise entail
  • • High levels of automation, reducing operations costs and administrative overheads • Limitations IT teams in the organization may have to invest in buying, building and managing the clouds independently External clouds This cloud computing environment is outside of the boundaries of the organization, though it is not necessarily a public cloud. Some external clouds make their cloud infrastructure available to specific other organizations, but not to the general public. Hybrid clouds This is a combination of both private (internal) and public (external) cloud computing environments. Variations of clouds Clouds can be classified as: • Infrastructures • Platforms • Applications Infrastructures • Salient features • Known also as IaaS (Infrastructure-as-a-Service), acknowledged as the most potent cloud • Provides access to shared resources on need basis, without revealing details like location and hardware to clients • Provides details like server images on demand, storage, queuing, and information about other resources, among others • Vendors who provide this type of service enable cloud platforms and cloud applications. Some may even leverage others within the space to provide competitive viability as well • Offers full control of server infrastructure, not limited specifically to applications, instances and containers • Example
  • Amazon’s EC2, through which users can request Linux Virtual Machine instances that are created on the fly and billed based on actual usage • Limitations • Service providers may demand higher prices for services offered • Issues pertaining to resource and server down time Platforms: • Salient features • Known also as PaaS (Platform-as-a-Service) • Empowers developers to deploy, deliver and manage their applications. They can build applications, upload (deploy) the same into the cloud platform and simply run and test them • Developers can also leverage additional benefits like authentication and data access provided by the platform • This cloud takes away the concept of servers, while providing an application centric environment • While creating this kind of cloud computing platform, a vendor “builds a cloud platform first and then develops applications that run on it” (OR) “develops a hostable application and then plugs it into the cloud”. But considering the advantages and disadvantages, the latter would be the better approach • Limitations Significant dependency on cloud infrastructure providers Applications: • Salient features Companies host applications on the Internet and users sign up and use them, without concerning themselves about its maintenance and whereabouts. This is also called as SaaS (Software-as-a-Service) • Advantages Mostly free, very easy to use, feature-rich, easy to access and promises good consumer adoption • Limitations
  • User can only use the application and would not know the technology leveraged to develop the application; thereby user has little control over application development Cloud computing for banks With increasing business complexity, banks are seeking innovative business models and specialized technologies to cater to customer demands. Cloud computing technologies can provide banks competitive advantage in the market, cost reductions, higher margins, simplified maintenance and management of applications across the enterprise, greatly extended scalability, agility, high availability, automation, large data storages and reliable backup mechanisms. By using cloud computing environments, banks can focus on their core business as opposed to concerning themselves about infrastructure scalability. Banks may explore use of cloud computing initially for better performance through peak demand periods but eventually adoption could spread to other areas. The current adoption rates are still very low in the banking industry, and some of the functionality on offer to customers is in the area of personal money management, resulting in mixed reactions from users. From a potential point of view, benefits for banks from cloud computing can be accrued, primarily, in the following business areas: • Business Process Management (BPM) • Business Intelligence (BI) • Enterprise content management • Customer interaction archival and search, e-mail archiving, e-mail security and document creation • Back-office activities • Example: credit card processing • Different types of payment processing and consolidation • Enterprise risk management - IT frameworks for financial services • Enterprise portals • XTTPS - Extreme Transaction Processing Platforms. • Enabling transactions “in the cloud” through XTP (Extreme Transaction Processing)
  • • XTTPS provides the foundation technology for certain classes of cloud computing and services as Application-Platform-as-a-Service (APaaS) • Printing services (printing opportunities in the enterprise) • Identity management • Enterprise CRM • Consumer credit reporting • Sales force automation • Customer support systems • Retail banking and stock trading • Foreign exchange • DNS (Domain Name System) management • Larger storage areas and back up mechanism • Critical batch job scheduling • Example: month/year end interest calculations Concerns around cloud computing for banks When banks start using public cloud computing environments, they must move their critical data and systems on to the cloud. Securing this data is crucial and a clear priority for the bank. Solution vendors need to concentrate on this aspect particularly to convincingly build the case for enterprises to move on to the cloud. The ISACA (Information Systems Audit and Control Association) has suggested that two factor authentication systems connected to a robust encrypted communications infrastructure, be deployed to secure Internet connections to cloud computing-based services. Certain other concerns could include: • Service providers demanding higher prices for services being provided • Issues surrounding the down time of resources and servers offered by providers • Response times from the cloud may be too slow for certain time-critical transaction management processes critical in banking • Undue dependency on cloud infrastructure providers • Lack of visibility into the technology used to develop the application; therefore lack of control over the application
  • • The IT teams at the bank would have to buy, build and manage the cloud (internal clouds), entailing significant resource and time investments Conclusion Cloud computing brings significant promise in terms of scalability, reliability, competitive advantage, cost reductions, simplified maintenance and management of applications across the enterprise, along with high availability and automation. Rated as one of the key area of innovative implementation for enterprises, by experts and analysts, it is expected to bring ample change in the way computing is approached in today’s world. Though the current adoption of cloud computing at banks is low, the benefits it assures will result in cloud computing gaining prominence and the years ahead will see a higher adoption rate r References 1. “Merrill Lynch Estimates ‘Cloud Computing’ To Be $100 Billion Market”, 2. “IT Cloud Services Forecast - 2008, 2012: A Key Driver of New Growth”, 3. Daryl C. Plummer, David W. Cearley, David Mitchell Smith, 19th June’ 2008, “Cloud Computing Confusion Leads to Opportunity”, a Gartner’s Research Special Report. 4. “Unlocking the Promise of Cloud Computing for the Enterprise”, Appistry White Paper, 2008. 5. Rachael King, 4th Aug’2008, “How Cloud Computing is Changing the World”, http:// 6. 7. Sriramkumar Voona Project Manager - Finacle Architecture, Infosys Technologies Ltd. Ravi Venkataratna Senior Product Consultant - Finacle Architecture,
  • Infosys Technologies Ltd. Review Acknowledgement Deepak N. Hoshing Head - Finacle Architecture Infosys Technologies Ltd.