By Bob Guilbert, Managing Director, Eze Castle Integration
The Cloud is everywhere, it seems. Google has a cloud. Amazon has one. Not surprisingly, Apple unveiled its iCloud last month. The ability to host and store data, applications and other infrastructures in the cloud has opened up the realm of possibilities for businesses of all kinds, even for hedge funds and investment firms.
With cloud services, large pools of resources can be connected via private or public networks to provide dramatically simplified planning and dynamically scalable infrastructures for applications, data, and file storage. Additionally, the costs of computation, application hosting, content storage, and delivery can be significantly reduced. Firms can choose to deploy applications on public, private, or hybrid clouds.
What are the differences between these three models and how can you determine the right cloud path for your organization? Here are some fundamentals of each to help with the decision-making process.
Public clouds are owned and operated by third-party service providers. Customers benefit from economies of scale because infrastructure costs are spread across all users, thus allowing each individual client to operate on a low-cost, “pay-as-you-go” model. Another advantage of public cloud infrastructures is that they are typically larger in scale than in-house enterprise clouds, which provides clients with seamless, on-demand scalability.
It is important to note, however, that all customers on public clouds share the same infrastructure pool with limited configuration, security protections, and availability variances, because these factors are wholly managed and supported by the service provider.
Private clouds are those that are built exclusively for an individual enterprise. They allow firms to host applications in the cloud, while addressing concerns regarding data security and control, which is often lacking in a public cloud environment. There are two variations of private clouds:
1. On-Premise Private Cloud: This format, also known as an “Internal Cloud,” is hosted within an organization’s own data center. It provides a more standardized process and protection, but is often limited in size and scalability. Also, a firm’s IT department must incur the capital and operational costs for the physical resources and maintenance with this model. On-premise private clouds are often best used by larger firms with applications that require complete control and configurability of the infrastructure and security.
2. Externally Hosted Private Cloud: This private cloud model is hosted by an external cloud computing provider. The service provider facilitates an exclusive cloud environment with full guarantee of privacy. This format is recommended for organizations that prefer not to use a public cloud infrastructure due to the risks associated with the sharing of physical resources.
Hybrid clouds combine the advantages of both the public and private cloud models. In a hybrid cloud, a company can leverage third-party cloud providers in either a full or partial manner. This increases the flexibility of computing. The hybrid cloud environment is also capable of providing on-demand, externally-provisioned scalability. Augmenting a traditional private cloud with the resources of a public cloud can be used to manage any unexpected surges in workload.
HOSTING YOUR APPLICATIONS IN THE CLOUD
In outsourcing the management of your applications, investment firms become privy to reduced environmental impact, cost-effectiveness, complete redundancy, seamless scalability and simplified solution deployment. Key advantages to hosting your financial applications in the cloud include:
Resilient and Robust Infrastructure: Look for a vendor who offers a N+1 infrastructure configuration to tolerate any single equipment failure and ensure the highest availability and performance.
Simplified Management & Application Knowledge: Outsourcing application hosting to a third-party not only frees up internal resources but allows a firm to leverage the expertise of a service provider to maintain the application infrastructure and keep it operating at peak performance 24x7x365. Be sure to select a provider that has experience in deploying, maintaining and supporting your firm’s specific application type.
Cost Reduction: Firms who host their applications in the cloud can reduce costs and minimize capital expenditures on new equipment. Ideally, vendors will agree to perform ongoing maintenance, monitoring and upgrades as part of a monthly cost.
Scalability: One of the key advantages to cloud services is the ability to scale easily. Hosted platforms can deliver virtually unlimited computing resources, redundant infrastructures and easy flexibility and expandability. Allocation of CPU, memory and storage resources as well as increased Internet bandwidth can all be increased on an as-needed basis.
Finally, when evaluating whether application hosting is right for your fund, be sure to consider your tolerance for latency, speed requirements, security and availability needs, and the level of control you’d like to maintain over your environment. Each of these factors will play a role in determining the right type of technology infrastructure to meet your needs.