Industry-specific clouds come rolling in

As with cloud computing in general, there are pluses and minuses to consider

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So far there are four customers, NYSE Technologies officials say.

"Infrastructure as a service has caught the minds of people within financial services," says O'Sullivan. For the past several years, firms that were able to acquire the latest technology and deploy it ahead of everyone else saw a "tremendous advantage."

But now many of the companies in the industry have upgraded, spending a lot of money on their tech infrastructure, thus closing the competitive gap, he says. While some firms are still focused on having that cutting edge technology, O'Sullivan says, "it's not as much of a competitive advantage as it was five years ago. Profit margins have been squeezed, and the market is not as active as it used to be, so firms are obviously looking to reduce costs and ... leverage a shared platform."

The platform also lowers the cost of entry for smaller firms, because they don't need to buy servers, ship them and install them, O'Sullivan adds. Once they sign on, "We provide them with physical servers and we provision them, or if they ask for virtual servers, they use the vCloud Director Portal," which give clients access to a catalog of virtual services. "We're building a community with like-minded firms that want to trade with each other,'' says O'Sullivan, adding that NYSE already has a connection to "almost every financial services firm in the world."

Feargal O'Sullivan
"We have developed trust over the years, and the idea is to extend that trust" into the cloud, says Feargal O'Sullivan, a vice president at the New York Stock Exchange.

NYSE Technologies is also building out an ecosystem of content and applications, he says, so that organizations that join its cloud can access an expanding number of features that they don't have to develop themselves. Among the services NYSE is offering is a risk-management gateway, which validates all trades. He says his company is also bringing other companies onto the cloud that will be able to use a wide variety of financial products from NYSE as well as from its competitors, such as risk management software.

Financial services firms that are interested in joining are required to sign a full agreement with terms and conditions and they will undergo a background check as a security measure and as part of regulatory requirements, O'Sullivan says.

Security is being handled by "applying the same set of security and policies we use to protect the NYSE market,'' says O'Sullivan, who declined to provide specific details, citing the nature of the industry. He did say the cloud offering is "heavily leveraging private virtual LANs, which shield everyone's traffic, hardware, firewalls." NYSE Technologies' cloud also leverages intrusion detection and prevention devices to monitor and track any sort of attempts at infiltration and intrusion, and then to "troubleshoot if something does happen."

There are two prices for CMCP: a monthly lease price for access to physical servers and a monthly price for what NYSE Technologies calls its "Virtual Cloud Pack," which would include, for example, 96GB of RAM and half a terabyte of storage, says O'Sullivan. While he declined to disclose specific pricing, he says, "We are confident we are very competitive with any cloud provider in terms of pricing."

Besides security, he says NYSE Technologies' value proposition is a WAN connection included in the price. "So [clients] get market data and trading without any additional bandwidth fees."

In addition to the NYSE, Boston-based financial services provider State Street Bank recently also announced plans to build a private financial cloud, offering real-time applications and services running in multiple data centers to clients.

Sharing can be good

In terms of how to sell the notion of sharing computing resources with your competitors, industry-cloud officials say companies often realize there are business processes that are good to share with others. "I could either invest in [creating] my own database of fraudulent business activities where fraud and risk mitigation is very important to me," says Moe Abdula, director of Cloud Solutions and Service Automation at IBM, "or I can acquire that information on my own at a higher cost, or get it from a particular [partner] in a financial cloud consortium or a community that has mutual interests around specific processes," presumably at a lower cost.

In contemplating whether other industries are ready for their own clouds, it's important to note that both SITA and the NYSE are marketing the trust and reliability of their brands within their respective communities. "We have developed trust over the years, and the idea is to extend that trust," Ouillon explains. "The industry feels comfortable sharing infrastructure with SITA, and we feel comfortable sharing the IT infrastructure amongst them."

At the network level, SITA has a number of mechanisms to share infrastructure, he says, and resources can be strictly private as if they were in their data center. Customers will have direct access to the infrastructure through their virtual private network, relying on MPLS technology or IPSec secured Internet access as they see fit, says Ouillon. The infrastructure itself is protected through several levels of firewalls and leverages VMWare Hypervisor technology, implementing security best practices for customers' separation.

But if a customer requests it, SITA will advertise the availability of some of their servers so other parties can access those apps, he says. "So if you're an aircraft manufacturer and you put an app in the cloud and want to advertise to the community, it becomes possible."

SITA and Orange Business Services are now fully engaged in execution, and all contacts with customers, analysts, and technology partners confirm the relevance and value of the community cloud approach, says Ouillon. "We are confident the ATI community cloud is the way forward to deliver the business agility required by the air transport industry."

Copyright © 2011 IDG Communications, Inc.

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