Occupy the Cloud

In case you didn't know, Incisive Media's New York offices are located at 55 Broad Street, diagonally across from the New York Stock Exchange. You may have heard that there's a protest going on down here—something about occupying Wall Street.

Since this is technology magazine, I'll refrain from getting into the politics of it all. (But if you're interested, come on down and we'll go chat over cigars at Barclay Rex at 75 Broad. One thing I will say is that I'm upset that the police barricades add an extra five minutes between me and Alfanoose, which serves up the best falafel in town. Anyway, enough of the plugs for my favorite Financial District businesses.)

What these Occupy Wall Street protests have shown is that there is clearly a wide array of opinions as to how best to fix Wall Street, or depending on your view, whether it needs fixing at all. Everyone seems to have weighed in—many of them strongly—about the protests. This reminds me of cloud computing. You saw that coming, right?

This week I met with John Metzner, president of Plural Investments and the former CTO of Eton Park. He says he's not overly anxious to leverage cloud computing, even if the firm does employ a few cloud-like internal processes.

What I found interesting is that he says for the next build, he'd consider whether or not the firm truly needed an internal database, which is currently right down the hall from Plural's trading floor. He doesn't love the idea of relying on a telecom cloud provider, but he's becoming more comfortable with the idea.

This opinion sits somewhere between Majedie Asset Management co-founder Simon Hazlitt and former Credit Suisse CTO Subhra Bose—two of cloud's staunchest supporters—and those who are still very skeptical of the cloud, such as Irene Aldridge, managing partner at Able Alpha Trading.

Aldridge says there will eventually be a breach of a cloud that will release supposedly encrypted information into the market, causing a panic ... and, potentially, another flash crash.

"Despite the push for the cloud, I think it is a major problem—from my perspective. Encryption is costly and time-consuming. If the next [flash crash] is going to come from somewhere, it's going to come from security breaches in the cloud,” Aldridge says.

Here's what I've found in my years of reporting on this subject: The most sophisticated buy-side firms have already begun to at least dip their toes into the cloud. If you're still afraid it, you’d better start getting used to it, as it's a change that's coming, whether you like it or not. The only question is whether you want to allow the early adopters to create a series of best practices or whether you want to be a part of that first wave, so that you can differentiate yourself from all the others who will be joining the crowd in a few years.

You may now be asking: Why the tie-in with the Wall Street protests? Honestly, it was just a good opportunity for me to pitch Barclay and Alfanoose. Vive le résistance.