European Financial Information Summit 2011: Data Architects Construct ‘Virtual’ Reality

Trading firms are looking to managed services and cloud computing as a means to deliver more value and resources, while reducing the number of systems that they need to maintain internally. And while vendors are happy to step up to the plate, they warn that firms must be targeted in the way they utilize the cloud, as simply moving a large on-site legacy infrastructure into a hosted environment will not deliver the full potential of cloud services, according to a panel at last week’s European Financial Information Summit.

“We’ve seen a move from big infrastructures to virtual offerings,” said Tom Dalglish, chief information architect at Bank of America Merrill Lynch. “I’d like to see us approaching a virtualized datacenter. We’re all still a little paranoid about putting everything in a public cloud, so I’m looking for a ‘man with a van’ approach—so someone like Intel can drive up and plug me in,” so that the bank can consolidate and switch off hardware supported in-house, he said, noting the importance of being able to roll out virtual hardware as quickly as possible.

“People are asking us to provide [our infrastructure] as a service—they want a service-level agreement, and they just want it to work,” said Dan Solak, global head of business development for real-time services in Thomson Reuters’ Enterprise Solutions division.

Speed of deployment is key for firms to reap the benefits of new developments as early as possible, said Daryan Dehghanpisheh, global director of financial services at Intel, adding that the chip manufacturer spends $6 billion in research and development before selling a single CPU, and that firms need to be able to deploy the latest technologies quickly to take advantage of that investment.

In fact, although conventional wisdom dictates that cloud is too slow for critical applications, Dalglish said there can be speed advantages over and above speed of deployment. “Contrary to virtualization making things slower, we found that the kernels in some operating systems are actually faster,” than what the bank was using in-house, he said.

But getting the most out of the cloud depends on being able to identify the areas that are suitable for running in a virtual environment, and those that are not. “You shouldn’t get into cloud just because it’s hot: if you have too high expectations, you are bound to fail,” Dehghanpisheh said. “But if you can make one workflow figure out where it fits best, you’ll be light years ahead of the competition.”

It also depends on re-examining anything that a firm plans to deploy in the cloud, to avoid simply transferring an inefficient application from one environment to another. Solak cited a client that wanted to use a cloud environment to host an analytic function that took three hours to run, where he enlisted a third party who re-wrote the client’s code to run in six seconds. “When you’re looking at the cloud, first, you must understand what you want to do,” he said.

And one extra precaution specific to market data that firms must build into any cloud environment is visibility into the movement of any piece of data. “We’re engineering compliance into the data fabric, so data can’t move anywhere without us tracking it,” Dalglish said. “We think vendors and regulators will want to see that. And while, for example, Bloomberg is very good in that if they find a problem [with our internal redistribution] they give us a month to sort it out, I don’t think regulators will be so lenient.”