The Content Cloud: A Silver Lining for Traders?
Andrew Feig, UBS, and Adrian Kunzle, JP Morgan Chase, open up to FIXGlobal about the applications for cloud-based services in the electronic trading arena.
Andrew Feig and Adrian Kunzle represent their respective firms on the Open Data Center Alliance (ODCA) Steering Committee, an independent consortium comprised of leading global IT managers who have come together to resolve key IT challenges and fulfill cloud infrastructure needs into the future by creating an open, vendoragnostic Usage Model Roadmap.
Are concerns about the security of data on clouds unfounded?
Andrew Feig: It all depends on what type of clouds you are talking about. If the discussion is about public clouds, then yes. Multitenacy introduces a whole new level of security concerns. There are many issues including making sure the data is secure enough and understanding the risks associated. Realistically, not all workloads will be candidates. Private clouds have a much lower hurdles, since they are usually only for one corporation, but may or may not be outside their own datacenter.
Adrian Kunzle: The concerns are not unfounded but also not insurmountable. Much of our current security mechanisms are transferable.
Where will financial firms see cost reductions through using cloud-hosted services?
AK: Cost savings will vary, depending on the size of the firm. At JP Morgan Chase, we would see the largest cost reductions through sizing. To elaborate, we currently scale all of our infrastructure at peak usage, so our systems are always prepared to cope with the greatest demand. Clouds will enable us to scale our infrastructure to average use and simply outsource during peak times. It’s like we currently pay for a service all year round, yet only use it a few times a year.Smaller firms would see savings across the board and be able to run more efficiently all around. The difference in cost reductions lies in the fact that larger firms like JP Morgan Chase have economies of scale that smaller firms do not necessarily have.
How much should a financial firm migrate onto a cloud, as opposed to retaining traditional physical architecture?
AF: Whether a firm chooses to do its own private cloud or use a public one comes down to their specific situation. If the firm has enough scale, then it may make sense to do their own or a hybrid model of private and some public. It will also come down to specific use cases, as some applications need a very high service level and it may not be cost effective to move outside the walls of the firm.
AK: Financial firms need to consider what applications would work and what data they are considering migrating onto a cloud. Obviously some software would operate better in the cloud, where others will not. Customer Relationship Models (CRM), for instance, have proven to be more useful and effective in the cloud. Platforms that accommodate employees who are often on the road would work well in the cloud. Where there is a competitive advantage to keeping our applications internal (in a private cloud or on physical hardware), we will.
For financial firms whose trading strategies rely on speed and high frequency trading, will cloud services aid their quest for speed?
AF: I envision specific cloud offerings will be developed to address these requirements. For example, exchanges will do a lot more in the cloud space, so it’s the next evolution of their current offerings like colocation.
AK: Almost certainly not. Trading platforms for top tier banks like JPMorgan Chase will most likely not go to the cloud.
