For Tony Kerrison, the day has long passed when it made sense to question whether cloud computing had a place in financial services companies' IT plans. Kerrison has been one of the industry's cloud computing pioneers: In 2008 he helped create an internal cloud for data center servers at Merrill Lynch (back then it was referred to as "stateless infrastructure"). This year he took the helm of the Enterprise Cloud Leadership Council, a group of corporate technology buyers developing cloud standards for vendors.
From his perch in Amsterdam as chief technology officer at ING, he's at it again, and along the way he is aiming to provide a path that banks in all parts of the world can follow. ING's project involves building a large hybrid cloud that combines features of public clouds and private data centers, one it will open to other banks to use. The hybrid or shared IT infrastructure, Kerrison believes, will achieve the variable costs, scalability, flexibility, and on-demand availability offered by public cloud computing in a way that addresses the security, compliance and performance requirements banks adhere to in their internal clouds.
"One issue a lot of financial companies have today is we all carry a lot of legacy in our environments, which means we can't move quickly and respond to demands the way we'd like to," Kerrison says. "Technologies like cloud will help us to be more agile and adapt to the demands of our clients in a much better way. Cloud computing has given us the opportunity to have some standards we work to and think about different ways of providing our services than just the traditional way of running everything ourselves." By taking a hybrid approach, ING can start with full control over the physical environment in which servers, storage and apps live. Over time, as regulations become clearer and as public clouds and their service level agreements become better understood, more computing can shift to less expensive and more easily scalable cloud venues.
The $1.7 trillion-asset ING has already built an internal, private cloud - a web of computing, storage, and network resources consumed as a service with automated, self-service provisioning - with a bevy of technology partners including IBM, Hewlett-Packard, Cisco, VMware and EMC. ING's cloud makes heavy use of Vblock from VCE (a joint venture of Cisco, EMC and VMware), a set of preconfigured, interoperable components that includes VMware virtualization software, Cisco switches and Unified Computing System (a combination of server hardware, virtualization software, switching fabric, and management software), EMC storage units and software, and RSA security software.
ING is by no means alone in pursuing a hybrid cloud environment. In May, Frost & Sullivan found that 22% of enterprises around the world were already using hybrid clouds; 41% of IT decision makers indicated that cloud will be a top priority for the current fiscal year. Hybrid clouds are the wave of the future, according to Gartner analyst James Staten. "This is not going to be a world that runs on cloud. It's going to be very hybridized," he says.
Purists could argue that private clouds like ING's, which JPMorgan Chase, UBS, State Street, Morgan Stanley and other large banks also have built, are not truly cloud computing, but merely virtualization projects. Kerrison and other IT leaders argue that, call them what you will, such flexible internal technology frameworks are critical to cloud computing. "I don't believe the private cloud environment is so significantly different from traditional virtualization," Kerrison concedes. "The real value comes when you start to integrate other cloud services into your existing infrastructure. That's where you want to start targeting the 30% cost savings that can come through migrating to cloud providers. It's an evolution from virtualization to the cloud."