Are financial services firms learning to love cloud computing?
Whether you believe cloud computing is a brave new world or another IT industry hype, financial services firms have generally been reluctant to embrace it. But, in these austere times, this reticence is slowly ebbing away.
If anything, the latest financial services firm to embrace cloud computing makes it seem a little worrying. State Street last week said it was cutting 1,400 jobs as it accelerates its investment in new technologies such as "private processing clouds".
One of cloud computing's key selling points is the cost-savings it offers and, as we've alluded to previously, there's also the potential for financial services firms to automate certain IT functions, which could result in job losses.
Still, two ongoing stumbling blocks preventing financial services firms from embracing cloud computing are concerns over security and regulatory issues around the processing and storage of data - something that becomes more difficult in cloud environment.
A recent report by Gartner suggested that financial services firms are never likely to use public clouds, because of the potential dangers of putting their technological intellectual property into the public sphere: "It seems likely that firms will always be predominantly private or hybrid cloud users, with public cloud mainly being used for noncore, noncritical applications, such as e-mail or HR."
Job opportunities for techies around cloud computing have still yet to materialise, with recruiters suggesting that any projects around this space are being managed by "trusted third parties" rather than banks and financial services firms hiring externally for expertise.
Cloud computing expertise is, however, beginning to creep into the "desirable skill-sets" area of job descriptions, they suggest.
"Six months ago, if you had skills around virtualisation, these would have been integral to the brave new world of cloud," says Duncan Johnson-Watt, CEO of cloud computing software and services firm Cloudsoft Corporation. "This is still true if you're creating a private cloud infrastructure, or trying to build out a hybrid cloud. But, more recently, the focus has been on tooling developers up, and making them more productive within a cloud environment."
This could mean an understanding of VMWare's offerings, for instance, as well as knowledge of cloud-based designs like Oracle Coherence or Apache Cassandra.
The Cloud Industry Forum is a new body created to promote more trust around the cloud computing and has created a code of practice to address security concerns. It's just a matter of time before UK businesses realise its value, suggests its chairman Andy Burton.
"Businesses are increasingly aware of the benefits that the cloud can bring and in these straightened times, and that is not just about cost reduction, it's about having the flexibility and agility to adapt your business to be more efficient, available and current," he says.
