Clouding the issue - BT Global Services

Clouding the issue
Why a mix of on-premises, public
and private cloud-based solutions
could be the future
2
Financial services
providers need to
choose carefully
when it comes to
cloud computing
It’s fair to say that financial services providers have become
more and more dependent on the agility and availability of their
critical IT systems. Like other service organisations, they need to
be able to move at the speed of light to meet changing business
needs and launch new services quickly, reliably and costeffectively. And they have to do all of this against a backdrop
of technology convergence, new global markets and increased
regulatory oversight.
Any one of the above business drivers makes a good case on its
own. Put them together and there seems little argument against
moving towards cloud-based services. However, any adoption
has to be tempered with caution.
The cloud brings its own unique challenges. Some of these
will undoubtedly fall away over time as services mature and
new capabilities emerge. But our advice is: choose wisely, not
everything is suitable for cloud today.
3
Cloud formation
What is the cloud?
When people refer to “the cloud”, they usually mean computer hardware and software delivered as a
service over a network.
Recent advances in software and increases in network bandwidth have led to services where
organisations can run their applications on ‘virtual servers’ – managed by a provider in the customer’s
own data centre, or more commonly, in the provider’s data centre. These virtual servers can be created,
scaled up and down and deleted in minutes – depending on the demand, with storage attached to
whatever virtual servers you create.
As these cloud services are already pre-built, the lead times to get started can reduce from months
to days, in some cases hours. All that’s required is an appropriate network connection to access the
service. This can be the public internet, a private network like BT Connect IP, or a specialist community
network like BT Radianz.
The advantages of this are clear:
• no upfront cap-ex – just pay for what you use
• a lead time measured in minutes, not months
• vastly reduced support costs included in the tariff
• no downtime for hardware failures – since the servers only exist in software.
Infrastructure journey
Basic
infrastructure
(sprawled)
Resources in
multiple silos
Virtualised
(consolidation)
Centralised
Standardised
Rationalised
Physical
co-location,
centralised
management,
pooled resources
Private cloud
(real-time
infrastructure)
Service-based
Note: Not all real-time infrastructure (RTI) is private cloud (although all private cloud is RTI).
To be private cloud, RTI must meet the same criteria listed for public cloud. This simplification
has been made for clarity.
Resources
optimised based
on business
priorities
Public cloud
1Service-based
2 Scalable and elastic
3Shared
4 Metered by use
5 Internet technologies
Source: Gartner, Reimagining IT for 2011 and Beyond: The Role of Cloud, May 4, 2011 Gartner, Inc. and/or it’s affiliates. All rights reserved.
4
The evolution of the cloud
In terms of sharing resources on a common platform, the cloud is not a new concept. So it’s worth
exploring the evolution of cloud-based services.
In the beginning, infrastructure was dedicated (and indeed many legacy and performance systems
remain on a traditional dedicated platform) with large amounts of duplication of resources in
multiple silos.
We then started to see the emergence of standardised processes, with centralised and
rationalised resources leading to a virtualised environment with physical co-location, centralised
management and pooled resources. Server virtualisation within an organisation has become the de
facto standard.
Since then, the focus has been on the services being delivered rather than the infrastructure that the
services are being delivered over. And the increased flexibility and increasing levels of bandwidth
being delivered are proving to be a catalyst for this new cloud-based environment.
How to spot different types of cloud
Two distinct flavours of cloud-based services have emerged from this. Differing aspects of the cloud
appeal to customers depending on their market segment and size of organisation.
1.The private cloud provides a real-time infrastructure where resources, owned by a specific client,
are optimised based on an individual customer’s needs.
2.The public cloud offers shared services, metered by use and often based on internet technologies.
But there is a third way: community cloud. This addresses some of the public cloud limitations
and is positioned somewhere between private and public clouds, depending on the
particular implementation.
Comparing clouds
Private cloud
Community cloud
Public cloud
• operated solely for
an organisation
• restricted access to
infrastructure shared
by several organisations
• available to the general
public or a large
industry group
• supports a specific
community that has
shared concerns
(eg, mission, security
requirements, policies,
and compliance
considerations)
• typically multi-tenant
• managed by the
organisation or a
third party
• exists on- or offpremises
• owned and managed by
an organisation selling
cloud services
5
The next phase of cloud evolution
Public cloud offerings continue to mature and develop and have seen good adoption rates. However
issues such as security, right to audit, regulatory uncertainty, privacy concerns, data protection
legislation and lack of end-to-end SLAs have limited uptake by large financial services enterprises.
Private cloud offerings do have some of the same issues but are generally regarded as safer. They are
attractive to financial services enterprises that want the advantages of cloud but don’t want to DIY
their own solutions. Most likely to be deployed as a hybrid with selective services held in the private
cloud and others held within the enterprise.
The strategy for delivering cloud will continue to evolve. The trend today points very much to a blend
of public and private cloud solutions. A hybrid architecture is the most likely scenario for large financial
services enterprises for the foreseeable future.
A hybrid of cloud and traditional internal IT will be best practice for the next 3-5 years
Hype
Hybrid
Enterprise
Enterprise
Enterprise
Services
Today
Mix of in-house,
outsourced and offshored
IT management
IT
IT management
IT
Everything in
the cloud
Source: Adapted from Bittman, “Private Cloud Computing and the Future of Infrastructure.”
6
Mix of in-house,
outsourced, offshored and
public and private cloud
What cloud model is best?
While the benefits of cloud computing are manifold, not all customers are going to move all their
applications to the cloud at the same time.
In fact, there will be some applications that companies will never migrate to a shared infrastructure,
although they may want to take advantage of some of the technology advances that are available. It’s
therefore important that a range of service models are available.
Then there are the security concerns. Financial services businesses will be reluctant to share the same
computing infrastructure with non-financial companies, and are wary of using the public internet to access
their applications.
And finally, control over where data is stored and processed may also be an important factor for an
organisation. This could be because of company policy or regulatory reasons.
With this in mind, it may be that a community or private cloud would be more suitable.
Controlling the cloud
Early adoption of cloud services has largely been driven by the business, sometimes despite and often without
the knowledge of the internal IT departments.
In many cases cloud services are purchased directly by staff members and claimed as expenses, bypassing fiscal
controls and reducing the ability of the organisation to drive bulk discounts or special pricing.
More worryingly, this can lead to a potential governance gap with uncertainty around what data is being
exported, stored and processed on the cloud. Further uncontrolled cloud adoption can easily lead to orphaned
data and cloud services that are no longer required but haven’t been ceased and appropriately deleted –
resulting in ongoing charges.
The challenge for IT and audit departments is tracking each external cloud service. Cloud service brokers can
help alleviate these problems, while at the same time allowing the business the freedom to purchase services
it requires on demand.
How to decide when and what to move
There are opportunities for every company to take advantage of emerging and existing cloud technologies.
To what extent and in what areas companies embrace this, may depend on a number of factors, such as:
• where they are in their technology refresh cycle
• whether they’re running an established application estate, but want to reduce costs
• whether new, collaborative communications across multiple devices would make the organisation
more efficient
• whether the computing and voice needs of the business are steady or if there are peaks in demand,
eg during a new share issue, during a marketing campaign, or closer to the ends of the tax year
• if there’s a demand for accessing the company’s applications from a variety of different devices,
eg. tablets, smartphones, etc,
• if they regularly launch new products and services
• if they need new applications.
An organisation can choose to adopt Cloud Computing on a number of levels – depending on the nature of the
applications. It may be that a mix of service models is deployed to suit the needs of the different departments
in a single organisation.
7
Consider a company launching a new application or service using traditional IT methods
Usage
System
overloaded
Investment
Wasted
money
Launch
Time
A company launching a new application or service using traditional IT methods must consider:
• the need to invest in infrastructure upfront – prior to service launch
• step-change investments ahead of increased demand
• long lead times mean additional investment before revenue
• demand peaks will lead to overloaded and slow systems
• investment in computing is sunk cost
With cloud computing, you can scale your computing power according to the demands on your
system, saving cost and shortening your lead times.
Voice, video and messaging services
In the world of cloud, unified communications – voice, video and messaging – are just different types
of data, but they need special treatment to ensure a ‘business level’ quality of service. As voice and
video are just data that is ‘processed’ then the widely accepted benefits of cloud computing are equally
applicable to unified communications.
So if an organisation occasionally needs to ramp up the number of its call centre agents quickly, it
probably has spare capacity sitting idle – just in case. But if its call centre were virtual – hosted in the
cloud – then more agents could be brought on line quickly, used when required and closed down as
the load decreases – all without the capital investment of installing and maintaining capacity for peak
loads. And because the call centre is virtual, agents can be located across the globe.
Similarly, some companies don’t wish to invest scarce cap-ex on PBXs for their premises. Nor do they
want the overhead of managing multiple vendors in multiple countries.
By using cloud hosted voice solutions, organisations can avoid the investment, costs and overheads
of maintaining their own systems – in the knowledge that they can have the latest unified
communications features and scalability of a cloud provider’s hosted system.
8
Where are cloud-based
services heading?
Infrastructure as a Service (IaaS)
Analysts forecast significant revenue growth for IaaS offerings over the next 3-5 years, with predicted
adoption rates second only to Software as a Service. IDC and Forester then predict a period of
commoditisation and price deterioration followed a decline of total revenues. SMBs are at the forefront
of IaaS adoption for all IT services, while larger enterprises are more selective, placing non-sensitive
work packages, such as test and development, on public clouds.
Platform as a Service (PaaS)
PaaS offerings are currently individual ‘point solutions’ that don’t integrate well with one another, but this
is changing. We can soon expect to see the rise of small groupings of interoperable PaaS services, while,
longer term, whole suites of PaaS services will emerge, providing a one-stop shop for all PaaS needs.
Software as a Service (SaaS)
SaaS is predicted to be the strongest cloud growth area with several services, notably SalesForce,
already having made significant inroads against the traditional enterprise-hosted solutions.
Infrastructure as a
Service (IaaS)
Platform as a
Service (PaaS)
Software as a
Service (SaaS)
• compute, storage,
and network resources
(typically virtualised)
delivered as a service
• computing infrastructure
and solution stack
delivered (ie, OS and
platform software) as
a service
• software distribution
model for end-user
applications delivered
as a service
• managed by service
provider
• metered and billed by
usage characteristics
(eg, memory, capacity,
and bandwidth)
• managed by service
provider
• metered and billed by
solution stack and usage
characteristics
• managed and evolved
by service provider
• usually billed by
subscription based on
capabilities and number
of users
9
Standing out from the cloud
BT can be seen as a niche player in the cloud market. We offer public, private and
community cloud services as well as a number of cloud enablers such as our world
class network infrastructure – crucial to any cloud solution that requires any form
of end-to-end service guarantee.
BT can offer highly functional IaaS as well as PaaS and SaaS for certain
vertical markets.
BT Radianz: the community
cloud in action
The BTRadianz product set provides community cloud
services to the finance industry. It provides cloud
enablers such as a secured, reliable extranet network
and IaaS via Radianz hosting. Solutions can be combined
with BT Cloud Compute to provide customers with the
benefits of a virtualised facility.
BT Cloud Compute offers both public and private IaaS
variants which can be remote or on site. It can be
accessed via the internet, BT Connect IP or BT Radianz.
SaaS services are available by partnering with Independent
Software Vendors (ISVs) to offer services to community
members. BT Unified Trading, Unified Trader Voice and
Federated Identity also provide IaaS services to the BT
Radianz community.
10
Summary
1
The future financial services enterprise IT environment will be a mixture or hybrid
deployment of on-premises, community, public and private cloud-based solutions.
2
Pressure to adopt cloud-based solutions will be driven by the lines of business
within the enterprise looking for cost savings and new capabilities.
3
Enterprises will need to prepare for the impact of :
• hybrid cloud computing becoming an imperative
• cloud brokerage to facilitate cloud consumption
• cloud-centric architecture/design becoming a necessity
• cloud computing influencing future data centre and operational models
• the shift from capital-intensive to operational cost models
4
Platforms from service providers will need to evolve to meet
the needs of the enterprise in the areas of:
• security and data protection
• performance and agility
• configuration and manageability
• governance, regulation and compliance.
“There was a time when every household, town, farm or village had
its own water well. Today, shared public utilities give us access to
clean water by simply turning on the tap. Cloud computing works in
a similar fashion. Just like water from the tap in your kitchen, cloud
computing services can be turned on or off quickly as needed. Like
at the water company, there is a team of dedicated professionals
making sure the service provided is safe, secure and available on
a 24/7 basis. When the tap isn’t on, not only are you saving water,
but you aren’t paying for resources you don’t currently need.”
Vivek Kundra, Federal CIO, United States Government
11
We can make the cloud clear
Visit www.bt.com/gbfm for more information
on BT for Financial Services
Offices worldwide
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