The state of the APAC cloud – Part 4
This post is the fourth part of a series exploring the cloud in Asia Pacific. It covers the current cloud situation across the region, how is the cloud being used, what is holding back further adoption, and how the cloud can be used for innovation. It will also examine the cloud in the FSI sector. In the previous postwe looked at the obstacles for cloud uptake in the FSI industry. In this post I’ll provide insight into the five key areas the cloud is being used in the FSI sector. Big data analysis, innovation, managing applications across multiple data centers and testing are other areas where financial institutions are looking at clouds for. However, they remain cautious due to regulations and current misconceptions about the insecurity of the Internet. Therefore, many financial institutions have adopted clouds in five ways: Enabling workload mobility Workload mobility aims to provide banking IT with flexibility and agility that was previously not possible when constrained by specific hardware or storage platforms. By decoupling the workloads from the operating systems, storage layers and servers, bank IT teams can now deploy those applications where they are needed-fast. Rebalancing the Return on Equity equation According to Gartner, poor return on equity will drive more than 60 percent of banks worldwide to process the majority of their transactions in the cloud. Clouds can help to increase utilization rate while reduce investment in on-premise equipment and software licenses. Become more customer-centric With competition soaring, Big Data analysis has become an effective tool to identify and maximize on new consumer behaviour trends as well as offer new services to current or future high-networth individuals. Building an on-premise infrastructure to house all these data can be costly, especially in the current economic climate. Increasingly, clouds are being used as platforms for Big Data analysis. Driving Innovation Innovation is another area where clouds are taking off in FSI. Many financial institutions are looking to increase their competitiveness by offering new services and features quickly across multiple platforms. Clouds offer a robust and platform for services delivery. This has especially created a huge interest in cloud orchestration to manage applications across multiple data centers. Test platform Lastly, clouds offer the opportunity for financial institutions to quickly test and provision services that their employees and customers need. With development lifecycle shortening, demand for new services increasing and tolerance for half-baked software reducing, many are looking to use clouds as test beds. In my final post I will look at how cloud can be used as an innovation engine for APAC enterprises.The state of the APAC cloud – Part 3
This post is the third part of a series exploring the cloud in Asia Pacific. It covers the current cloud situation across the region, how is the cloud being used, what is holding back further adoption, and how the cloud can be used for innovation. It will also examine the cloud in the FSI sector. In previous posts we assessed the current cloud situation in Asia Pacificand looked at how enterprises are actually using it. In this post I’ll provide some analysis how about the FSI perceptions of cloud. I’ll then follow it up with a post discussing the FSI industry’s cloud strategy. FSI’s main currency is trust. Without trust, financial institutions will not be able to conduct their business. Over the years, a lot of regulations and legislations have been added to fortify this trust and ensure that the end clients are not short changed. And resulting restrictions on data exchange and data privacy concerns have seen many financial institutions reluctant to move from their on-premise platform to public cloud infrastructure. There are three main hurdles that have hindered FSI cloud adoption: Regulations In Asia and around the world, significant data security and compliance requirements hinder financial institutions from going to the cloud. Essentially, financial data has to be secure and access controlled, as set out by legislation like Sarbanes-Oxley and the Gramm-Leach-Bliley Act in the US and the Data Protection Act in the UK. Local regulations also require customer data to be stored in country. Unless regulations change, processes that touch customer data will not be able to be easily migrated to the cloud. However, many financial institutions are already evaluating the use of cloud for those processes that do not touch customer data, while others are looking to use cloud as test beds, service delivery and innovation. So cloud adoption will eventually increase but at a very cautious rate as regulations and compliance activities remain a key concern for many. Perception of insecurity For banks, who are often seen as treasure vaults, security is paramount. Although clouds are secure when architected correctly, perceptions about the insecure Internet and regular articles on Internet attacks often keep many financial institutions on the sidelines. These perceptions will eventually change, but it will be sometime before end customers get comfortable with a cloud-based bank. In the meantime, many financial institutions are already building private clouds that offer some of the flexibility and cost savings of public clouds but are designed to be more secure. Cost of Migration Financial institutions cannot afford down time. Every second of down time means millions lost, reputations tarnished and loss of would-be clients. And every time a financial institution becomes unavailable over the Internet, it becomes a headline. Migrating to the cloud is a huge endeavor, and obviously many financial institutions are wary about the risks it entails. The use of legacy systems and reams of data (kept for compliance reasons) make it more complex. In addition, banks cannot fully migrate all their applications and processes onto the cloud due to regulations. This means that they need to examine which processes that can be migrated and maintain a secure and highly reliable link to their current data center. To successfully mitigate them, financial institutions need a well-planned plan executed in phases. Migration tools are getting better and more comprehensive, making this possible. More forward-looking financial institutions are using clouds as test beds, to ensure migration occurs smoothly. As a result of the three points above the shift toward cloud has been largely a private affair for many financial institutions. This shift to private clouds has been driven by FSI institutions seeking new ways to reduce costs, as governments increase minimum capital requirements and compliance costs increase. Using private clouds are helping many to achieve these, while dealing with dynamic business demands. In my next post I’ll outline the five key ways the FSI industry is using cloud across APAC.The state of the APAC cloud – Part 2
This post is the second part of a series exploring the cloud in Asia Pacific. It covers the current cloud situation across the region, how is the cloud being used, what is holding back further adoption, and how the cloud can be used for innovation. It will also examine the cloud in the FSI sector. In the first part of this series,we looked at the current situation with cloud in Asia Pacific, its adoption and what is preventing further uptake. But how are those enterprises who’ve adopted cloud actually using it? Enterprises in Hong Kong often see clouds providing benefits in two main areas: Cost reduction and improved competitiveness. Many have embraced cloud to shift their IT expenditure model from a CAPEX-driven one to an OPEX-based one. By subscribing to resources on demand, enterprises can easily scale up or out according to business needs without having to invest time and monies in deploying these in-house. As a result, organizations are becoming more agile and flexible to market demands, improving overall competitiveness as well as operational readiness. Provision of new application is now easier, as clouds become the preferred platform for delivery. This allows businesses to quickly meet new demands or explore new opportunities, without having to purchase and deploy new hardware, and worry about utilization rate. Software as a Service, through the cloud, is also changing the way enterprises work. Mission critical processes, like finance and HR, can now done easily through subscription-based services. These allow enterprises to let their IT departments focus on value-adding or core activities, and not be bogged down by administration concerns and enabling IT for other departments/divisions. In addition, enterprises do not have to employ additional specialists for IT management, which is a huge concern for many in Asia. Besides, they also benefit from best practices and global expertise from service providers. Overall, cost of doing business using IT has gone down considerably. Storing data and email can now be provisioned as a service, as well as other mission critical processes right up to disaster recovery. This has flattened the playing field allowing medium enterprises and smaller peers to challenge established incumbents. In addition, it has allowed other enterprise functions, such as the COO and CMO, to change the way they work with the CIO to meet business goals. In the next post we’ll take a look at the FSI industry and the cloud before wrapping the series up with thoughts on how the cloud can be used as an innovation engine.
Clouds: The strategic CIO’s weapon.
This is an excerpt from a piece originally published in Asia Cloud Forum / Computerworld Hong Kong. For the full insight go to Asia Cloud Forum / Computerworld Hong Kong. Asian CIOs need to become more strategic and less operational. According to McKinsey’s survey of global IT executives, IT spending on infrastructure will decrease in three years’ time—from 27 to 19 percent — while, spending on strategic IT like analytics and innovation will increase . It seems the future for CIOs lies being a strategist and innovation enabler rather than mere IT orchestrator. For many years, a lot of CIOs focused on building and maintaining the backbone IT systems that business rely on; meanwhile, business evolved. Forrester noted that with continued business gains, they are now seeing CIO spending decline as business leaders and workforces take over more IT strategy and spending decisions. They also expect to see this shift in spending power continue out to 2016 at a minimum. The cloud is a key way to shift IT’s focus away from backbone IT to becoming a business-wide innovation engine. Key ways clouds support strategic IT thinking Clouds were initially deployed to enjoy operational efficiency and cost reduction. However, today’s clouds can unshackle the CIO to think more strategic by offering these benefits: Deployment automated Improved security and access management Streamlined capacity and performance management Intelligent tiering in the cloud Foundation for a comprehensive outsourcing strategy Take advantage of new services fast Going strategic offers the right direction. After all, CIOs are well placed to offer IT advice as businesses increasingly rely on IT innovation to leapfrog their rivals. But first they need to find a way to rid their thankless tasks of deploying, maintaining and streamlining the business architecture so that they can transform their IT teams into engines of innovation. The answer can be found in clouds.The state of the APAC cloud – Part 1
This post is the first part of a series exploring the cloud in Asia Pacific. It covers the current cloud situation across the region, how is the cloud being used, what is holding back further adoption, and how the cloud can be used for innovation. It will also examine the cloud in the FSI sector. The cloud is starting to fizz in Asia Pacific. The big cloud global players are pushing their offerings in Asia with regional datacenters while a host of local and regional players are expanding. While the cloud still lacks adoption and maturity compared to the US and Western Europe, it is starting to grow rapidly. According to IDC’s 5th annual survey of end-users regional CIOs are increasing their spending on public cloud services and technologies in 2013 by 50 percent to US$7.5B. They are also being much more specific about which types of cloud models they will use and the workloads that they will run on the cloud. So are enterprises no longer worried about moving to the cloud? Yes and no. The real answer is that enterprises in Asia are less worried about moving to the cloud. However, misconceptions, fear of losing control and security concerns continue make the cloud story murky. The biggest concerns are security and integration. Security – busting the cloud fear The truth is that security needs to be rethought for cloud. Protecting an internal infrastructure behind layers of firewalls is no longer sensible. Enterprises need to have a hard look at their current infrastructure before migrating to the cloud. Security also needs to be relooked from an application-centric perspective. For example Web Application Firewalls can help to protect Web services in ways traditional firewalls can’t. In addition, using solutions like BIG-IP Application Security Manager ensures applications are protected and optimized for on-premise and cloud infrastructure. As for Service Providers, they are motivated to offer the best security as their own business and reputation is at stake, and often employ dedicated professionals and invest in specific tools that enterprises do not have to invest in. Lastly, clouds also transform a company’s infrastructure to become more application-centric. That means multi-layered attacks should be considered when designing a cloud infrastructure or subscribing to a cloud service. A simple DDoS attack can essentially bring your organization to the knees. Essentially, many of these fears stem from the fear of losing control. Cloud service providers can actually bolster security by offering global knowledge, best practices, and expertise whenever needed. By leaving administration in the hands of the experts, enterprises can refocus their IT teams on core or value-driving activities. Integration – overcoming this challenge Moving to the cloud requires integration and management. For a homogeneous environment, this is simple. In reality, many enterprises have heterogeneous environments that have grown organically over the years as they constantly add applications and services for employees and/or customers. So integrating & managing different environments, including legacy ones, and applications, which may be highly customized, from data centers to the cloud can be a challenge. When not deployed properly adoption of cloud can complicates management and create inconsistent user experiences. A thorough study of one’s own infrastructure and using a phased approach to cloud migration can help to reduce integration anxiety. Using clouds as test beds for integration can also reduce impact on actual business or the production environment. Obviously, some Asian enterprises are already addressing these concerns and going past popular misconceptions. It is the reason why IDC predicts Asia Pacific, along with Western Europe and Latin America will increase their share of the IT cloud services market, while the largest public IT cloud services market, the US, will see its share decline from 56.9% in 2013 to 43.9% in 2017. But it will be a while before cloud adoption numbers reach those seen in the US.