Wall Street eyes cloud computing -- cautiously

Cloud computing could be a financial services game changer as the services mature

NEW YORK -- While the potential benefits of cloud computing, such as resource flexibility, are appealing to many IT executives, security and regulatory concerns are either limiting or preventing its use by Wall Street financial firms.

That was the consensus of many attendees at the High Performance Computing in Financial Markets Conference held here Monday.

Mats Andersson, CTO of Nasdaq's OMX Exchange, said Nasdaq uses cloud computing systems, but only inside the company's firewall and only to access historical market data. Exchange IT officials aren't yet ready to trust "the cloud" with transactional data, he added.

Dan Hall, manager of systems design and engineering at IntercontinentalExchange (ICE), said his company is running Amazon's S3 cloud computing service only in a test environment mostly due to security concerns.

"We only use it once in a while for load testing," he said. "The biggest challenge is effectively controlling utilization. People would spin up a machine and not think to spin it down. We'd be like, why do we have all these hours of computing time. We only used it for two days."

Along with ICE, Deutsche Bank was one of the few organizations at the conference that are using cloud computing in some way. Over the past year and a half, the financial services firm has deployed a hybrid private/public cloud computing infrastructure that's used so far for testing and development, but not for mission critical data.

Tony Pizi, head of next generation infrastructure at Deutsche Bank, said top exeutives at the firm have been very forward thinking about cloud and its benefits, but they also recognize the challenges the technology can present to large companies. "It's difficult for any large institution where there are processes in place and individuals that have done a particular job well over the years to accept change," Pizi said.

Even though Deutsche Bank is limiting use of its cloud infrastructure to testing and development functions, all data is protected by the company's strongest security measures. For example, all data that passes through the cloud is encrypted and any data at rest is masked.

Pizi noted that the bank's audit and security teams recognized that the very technologies they had hoped to implement within Deutsche Bank came to pass as a byproduct of rolling out the cloud technology.

Like others deploying cloud computing, Deutsche Bank was interested in leveraging its various promised benefits, such as self service, convenience and lower computing costs.

"What we were really after was promoting reference implementations which would allow us to leverage standard services, reduce time to market [for products], become much more agile and increase server utilization," he said.

By deploying it only for testing and development, it put even the internal critics of the technology at ease, though Pizi said he expects that one day cloud computing will become a "game changer. I don't think anyone thinks the Internet didn't fundamentally change the world. This is of the same magnitude," he said.

When Deutsche Bank first began implementing cloud computing technology, Pizi said he thought its deployment would be the most difficult task for IT workers. Instead, he said deployment was the easiest part of the project.

Far more difficult -- and time consuming -- were dealing with licensing issues. Each license must to be closely evaluated by managers, he said.

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