Below is an excerpt from our whitepaper, Is Hybrid Cloud Right For Your Firm?. If video is more your style, scroll to the bottom and watch our 30-minute webcast on hybrid cloud considerations for financial and investment firms.
With its security, privacy, and performance, the private cloud has been the go-to option for financial and investment firms that require enterprise-caliber IT infrastructure. In most cases, that private cloud is professionally managed by a service provider solely focused on monitoring, managing, and maintaining that infrastructure to meet business requirements and compliance directives. Thus, firms benefit from seasoned, industry-experienced professionals who live and breathe financial IT.
For many firms, so-called public cloud infrastructures offer compelling opportunities and advantages. For many smaller and younger firms in particular, the flexibility and ease of deployment are persuasive drivers. What’s more, the initial costs appear to be lower for certain feature sets (although an analysis of the total cost of ownership indicates that advantage is less clear-cut).
Hybrid Cloud: Bringing Them Together
Fortunately, investment firms needn’t take an “either/or” approach to their IT infrastructures. With a hybrid cloud approach that combines many of the most compelling features of public and private clouds, firms can leverage a uniquely flexible platform that meets a broad range of needs.
Which Cloud Has the Edge?
The decision regarding your IT infrastructure has significant implications on the ability of your investment firm to gain and maintain a competitive advantage. As you weigh your options – public, private or hybrid – it can be beneficial to consider the following aspects of cloud architectures and weigh their importance as unique to your individual firm.
With any technology infrastructure, the value and functionality your firm will gain should be measured against an equally essential component – support. Technology is not infallible, and as such, it’s imperative for firms to entrust their IT management to a provider well-versed in the ins and outs of technology service and support.
First, think about what type of support your firm would most benefit from. Many financial firms find it’s essential to be able to rely on named, live individuals who can actually physically touch your machines and, perhaps more importantly, understand your business workflow. Financial IT experts and investment-focused managed service providers (MSPs) know and appreciate your business model and investment goals, understand the applications and technology requirements you need to power your operations, and ultimately are in the best position to address your short- and long-term needs.
Public cloud providers (the likes of Microsoft, Amazon and Google, for instance), on the contrary, do not have specific knowledge of your investment business – the features you need or applications you rely on. Additionally, given their massive structures and reach among customers, it’s highly questionable you’ll receive high-touch support and an immediate call-back. More likely, you’ll be relegated to a long queue of customers waiting for nameless/faceless support – or worse, plowing through self-serve knowledge bases.
This is where private and hybrid clouds offered by vertically-specific MSPs deliver an advantage. Financial and investment firms want deep experience and industry-specific expertise. With more flexibility and established relationships with clients, these cloud providers can take a proactive approach to ensure known vulnerabilities are closed up and that all aspects of the infrastructure are properly and efficiently upgraded.
Availability & Uptime
For an alternative investment firm, availability is always a chief consideration. When crucial elements – or the entirety of your IT infrastructure – are hosted elsewhere, you need guaranteed uptime and predictable service levels. For IT experts, nine is the magic number – and the more of them, the better. In service level agreements, cloud providers should clearly define the contracted levels of uptime they guarantee to provide.
In many public clouds, for example, you’ll see “three nines” (that is, 99.9 percent availability). While it appears sufficient, some private clouds can offer better uptime guarantees based on their infrastructure redundancy. For instance, some private cloud service providers offer a 99.99 percent uptime guarantee – and the added nine makes a significant difference.
Of course, with a hybrid approach, you can tap into multiple clouds and data centers, fortifying the necessary levels of availability your firm requires. Each cloud’s infrastructure is designed with redundant resources, network connections, storage and other vital components to offer a level of resiliency and durability, even in the face of faults and unplanned downtime.
In a hybrid environment, firms can rely on the more robust, premium-grade uptimes offered by private MSPs for production environments and critical functionality (e.g. file services and application hosting) while tapping public cloud infrastructures for potentially less critical variants such as application development and testing environments, email, and personal productivity applications.
Like virtually no other industry, the success of an alternative investment firm can rise or fall based on the speed of IT connectivity. Fractions of a second are vital, which means that the three most important words in data centers are “location, location, location.” That’s because network latency is a crucial factor in determining the performance of mission-critical applications. In many cases, public clouds can operate out of geographically remote data centers (where it’s less expensive to procure real estate) that are significantly removed from major urban hubs/exchanges and thus, away from your business, creating needless delays that the firm cannot afford.
Depending on your firm’s strategy and trading/execution goals, you may require certain proximity to data centers supported by either a public or private cloud provider. Plus, it’s worth considering the quality of service (QoS) required by your firm as your data travels across these networks. Many investment management firms prefer the comfort and security of private network connectivity, which many private/hybrid MSPs offer but few public clouds do.