Cloud Computing special report

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Told You So...

Back in 2007 at the Buy-Side Technology Awards, Majedie Asset Management's Simon Hazlitt spat in the soup. Not literally-his potato and leek soup, I seem to remember, was consumed without incident. But his address to those present at the awards ceremony was greeted with a level of disdain usually reserved for those one-off-type situations where people simply can't believe what they've seen or heard. Hazlitt, speaking to 80 of the buy side's major technology providers, described Majedie as a small asset manager with a headcount of 24, 22 of whom were portfolio managers. I forget what the other two staff members did from nine to five, but it definitely had nothing to do with technology. Maybe they made the tea and collected the muffins from the local bakery in the City, but regardless of the details, you get the general idea: Majedie is a firm that does not need, and therefore does not have, an IT department. This arrangement takes "lean and mean" to another level altogether.

Hazlitt-and this is the part that really ruffl ed feathers-went on to provide a breakdown of Majedie's operating costs compared to its assets under management revenues. In short, the fi gures he divulged had tongues wagging during the postlunch drinks session in the Lanesborough Hotel bar, simply because those present couldn't-or wouldn't-believe that Majedie's operating costs were so small compared to its revenues. I remember, as clearly as if it were yesterday, a number of industry veterans suggesting euphemistically that Hazlitt "had his numbers wrong," although by that stage in the afternoon they expressed their skepticism a little less eloquently.

But, given where the cloud computing model is today in terms of its sophistication and general acceptance across the fi nancial services industry that it is indeed the only way forward when it comes to application and service provision, it would appear that Hazlitt couldn't have been more right. However, this doesn't mean you should be preparing pink slips for your entire IT department just yet, especially if your organization is dependent on legacy applications for its smooth day-to-day operations. But as the cloud phenomenon continues its inexorable growth, it will become more and more diffi cult to justify not making the conversion, the first steps of which require the tough but necessary process of weaning yourself off those expensive and outdated apps.

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