Who is a Pure-Cloud Strategy Appropriate For?

Anthony wonders if over the next decade even larger buy-side firms won't employ an all-cloud IT strategy.

This month's cover story in Waters features Darren Johnson, the chief operating officer at London-based Impax Asset Management. My colleague Steve Dew-Jones sat down with Johnson to discuss his background and the firm's use of cloud technology.

Johnson says that Impax relies solely on cloud environments when it comes to technology. Its relationships with Bloomberg, FactSet, Linedata, Omgeo and Microsoft power the firm. This, as a result, allows Impax's staff to focus exclusively on business challenges rather than dumping money and people into its IT.

Steve's article on Johnson reminded me of a profile I did a while back on Simon Hazlitt, co-founder of another London-based firm, Majedie Asset Management. Simon's firm also relies entirely on cloud-based solutions and he has given several lectures at Incisive-sponsored events on the reasons why cloud technology makes the roles of technologists expendable.

For small asset managers like Impax ($2.9 billion AUM) and Majedie ($10 billion AUM) it makes complete sense that they have thrown their faith into the cloud. Neither have had any security issues, nor have they ever experienced any interruptions that would lead them to think twice about the strategy. And they can use that money and time savings to better address client needs.

As to Hazlitt's point that cloud makes IT people expendable, at those same conferences he does find some pushback from incredulous audience members. They say that sure, this strategy might work for a small asset manager, but it would never fly at a mid-tier firm, much less a large asset manager with $500-plus billion under management.

But just seeing how ubiquitous cloud strategies have become on the buy side over the last three years─and how willing some firms are to talk about those strategies and have their firm's name attached to the cloud─makes me wonder if a decade from now even larger firms aren't fully immersed in the cloud.

What say you? Send me an email (anthony.malakian@incisivemedia.com) with your thoughts or give me a call (646-490-3973).