Last week, Jason Nolan, a presenter in Eze Castle Integration’s recent webinar, discussed cloud computing for investment firms, and the various types of infrastructures over which they can be deployed. Today’s post, a transcript of co-presenter Mike Maguire’s webinar talk, looks at some considerations for hosting applications in the cloud. Stay tuned for Part Two of Mike’s presentation featuring important questions to ask vendors to ensure that application performance meets the highest standards, coming up later this week.
Considerations for Hosting Applications in the Cloud
There are many different types of hedge funds who employ many different strategies, so there isn’t a “one size fits all” approach to cloud computing and infrastructure. Furthermore, some funds might have different requirements for different systems. For example, a fund might have high speed/high availability requirements for its trading system, but these requirements may not be as important for something like its CRM system. I would encourage folks to consider the following items in their SWOT analysis of whether cloud computing is right for them:
Control: Outsourcing the management of your systems may lead to erosion of firm knowledge due to the outsourcing of maintenance. This might be okay for certain systems, but not all. It really boils down to your comfort level. Also, you may not have control over maintenance schedules and the like, so it is important to understand what types of events you may not have control over. Make sure that you choose a provider who can be flexible given your business requirements.
Speed: What is your firm’s tolerance for latency? Moving different types of systems into the cloud could result in milliseconds or potentially seconds of latency. Different types of funds might have differing opinions on “acceptable” levels of latency for their systems. For example, a high volume day trading shop will have zero tolerance for any latency in their trading systems. It is important to establish a firm-wide consensus for your each of your systems.
Security: You may have less control over the security of the data in the cloud. First and foremost, you need to trust the service provider that you are working with, and you should be sure to perform due diligence into the types of security employed (physical security at the data center, hardware level controls, as well as software systems deployed). Many firms I have spoken with are uncomfortable with moving sensitive data outside of the four walls of their office, so it is important that you have confidence in the provider’s security.
High Availability: A good business continuity plan is critical when you are hosting applications in the cloud. Be sure that the service provider can offer you the same level of BCP that you currently have in place—if not better. You should try to gain deeper insight into things like:
- How are back-ups managed?
- What are the redundancy options in the event of a hardware failure?
- What are the disaster recovery options?
- What tier class is the data center, and is it sas-70 certified?
Familiarize yourself with the different tier-classes for data centers in order to understand which tier meets your firm’s minimum requirements. It is important to understand the technology that these providers employ, and how flexible they can be to meet your requirements.
Cost of ownership: Is the cloud actually less expensive? I encourage everyone to do a cost analysis before moving systems into the cloud and consider this in your SWOT analysis. It might appear less expensive in the short-term, but might not necessarily be reducing your costs in the long-term when you factor in life of equipment, and other infrastructure variables.
Scalability: One of the key benefits of cloud computing is scalability—the ease of quickly adding additional computing units for processing, memory, storage, and networking. How quickly can the provider increase the capacity for these different areas, and are there any upper limits?
- Systems Integration: Will there be any limitations or performance issues while your applications are in the cloud? For example, will you be able to use your preferred market data vendor for certain systems? Will there be any bandwidth constraints that could contribute to latency on FIX or market data connectivity? You should perform a thorough review of the integration between your systems and make this a consideration in any planning.
Also, be sure to read:
Cloud Computing Part Two: Eight Questions to Ask Application Hosting Vendors
Understanding Public, Private, and Hybrid Cloud Infrastructures
- Reaching New Cloud Computing Milestones, 30 Apps and Counting
At Eze Castle Integration, we have deployed a robust, scalable cloud Infrastructure in multiple Tier II and III data centers. Our Eze Cloud infrastructure leverages best of breed technologies to deliver cost effective infrastructure as a service powered solutions to the investment industry. For more information on how public, private, or hybrid cloud computing could enhance your firm’s technology infrastructure, please contact us.
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