The technology treadmill is a tough place to be these days. Technology refresh cycles last only a mere three years, forcing firms to replace their infrastructures and make costly software and hardware upgrades on a too-frequent basis. And with hedge fund budgets tighter than ever, many firms cannot afford to stay on this path.
But the hedge fund technology treadmill is not a firm’s only option. Costly in-house, 'traditional' IT services have given way to more cost-effective outsourced IT and managed services that get firms off the treadmill and on a path to success.
Let’s have a look at some of the key reasons why hedge funds and other investment management firms are moving from on-premise technology infrastructures to cloud and managed services.
Keys factors driving hedge funds to managed services
Many firms are turning to managed IT services because it allows them to align their IT requirements with their business needs, including tighter control on budgets and staff. Moving to a managed service platform provided by a reputable outsourced IT provider not only makes it easier to deploy technologies, but also allows firms to benefit from platforms inherently designed to meet the constraints of limited IT resources and budgets.
When evaluating a cloud services provider there are a lot of factors to take into consideration: features & functionalities, security protections, provider experience, and industry certifications just to name a few. We've identified some of the most important questions today's investment management firms should be asking cloud services providers during the selection process.
Five or seven years ago, these questions would probably be fairly basic in nature. Does the infrastructure isolate individual client environments? (Yes). Can the cloud environment scale to meet a firm's growing resource needs? (Yes). In 2017, we can safely assume you understand the basics of the cloud, so the questions we've identified move beyond the basic and focus on critical infrastructure, security and support questions your cloud provider should be able to address.
Top Ten Questions to Consider:
I'm most concerned about the security of my data. What types of security layers do you employ across the cloud platform and your broader organization to guarantee the safety of my firm's information?
Does your cloud leverage proactive security technologies such as intrusion detection and prevention, next-generation firewalls and regular vulnerability assessments and/or penetration tests?
Private equity firms have been slow to embrace outsourcing, but managing data and technology is more complex than ever. With increasing regulatory requirements and a growing urge to focus on core competencies, PE firms are shifting their views of the back office. In case you missed our recent webinar on 'The Transformation of Private Equity Operations', speakers from Citco Fund Services and Eze Castle Integration examined the changing tide for private equity operations and how CFOs, CTOs and fund managers alike can control operating costs, maximize efficiency and better perfect operational workflows.
Drivers for change.
The number one reason for managers to make the switch to an outsourced solution is the desire for managers to get back to their roots. The idea of back office transformation is really founded in that managers have found themselves spending much more time doing everything but raising money and investing money.
Beneath this layer, back office transformation is also driven by regulation, investor transparency, the lifecycle of a private equity firm, and global reach. Slow adoption, fast results. The private equity sector has been slow on the uptake when it comes to outsourcing, and we contribute this lag due to lack of education on the process and benefits of outsourcing. In the past three to five years, adoption in the PE space has increased because it is cost effective, secure and feature rich. Private equity firms that have made the switch wonder why others are not doing the same. The idea of leveraging an experienced managed service provider is one that private equity firms have really embraced because there is no burden for firms to hire and attract talent, which can be challenging and expensive.
As we work with clients on completing due diligence questionnaires (DDQs), one increasingly common question is, “does your firm block access to data sharing sites such as DropBox or Google Drive?”
Generally the answer to this question should be ‘Yes,’ but that isn’t always the case because public file sharing services such as these are very convenient, and firms may overlook the security risk they pose. Additionally, employees accustomed to using Dropbox for personal use may be tempted to go for convenience over security when they need to share a large file or data set.
However, with security threats multiplying exponentially, hedge funds and alternative investment firms need to be proactive in protecting data and personally identifiable information (PII) from accidental and malicious insider risks. That’s why for secure file sharing Eze Castle Integration includes Varonis' DatAnywhere product as a standard feature within our Eze Managed Suite. Varonis' DatAnywhere offers users seamless and secure collaboration and file sharing across devices.
Beyond security, Varonis' DatAnywhere is easy to use. Users receive the same drag-n-drop experience as shared network drives or a cloud sync folder, which means no need for training on complex user interfaces and collaboration workflows. Additionally, data is automatically backed up and version controlled.
Cloud, Cyber Security and Managed Services: Putting Eze Castle Over the Top in Waters Rankings (Video)
We're thrilled to share that Eze Castle Integration has won the coveted awards for Best Cloud Infrastructure Provider and Best Cyber-Security Provider in the 2016 Waters Rankings. Vinod Paul, Managing Director of Eze Castle Integration, spoke with Dan DeFrancesco, Deputy Editor of Sell-Side Technology and Waters Technology about how Eze Castle Integration differentiates itself from other cloud and security providers.
Watch Vinod's video interview below or scroll down for some quick takeaways.
As a hedge fund or investment management firm, you’re juggling a lot. Hedging bets, pitching investors, running day-to-day operations – there’s a lot on your plate. That’s why working with an experienced cloud services provider can offer benefits beyond just infrastructure.
Let’s take a look at three different ways your cloud services provider can de-stress your busy life and provide you with much needed value.
1. Free up your space.
One of the beauties of a cloud computing environment is the near elimination of physical hardware and equipment on-site at your office. When managing your own server room or Communications (Comm.) room, you are responsible for housing a variety of equipment such as servers, UPS units, networking equipment and cables, spare parts, etc. Not to mention you need the real estate for it all. And don’t forget – much of this equipment runs on a three-year refresh cycle, which means you’ll have to upgrade everything in the near future.
If you’re one of the seemingly few firms who has yet to make the move to the cloud, it could be for a variety of reasons. Perhaps you want to maintain total control of your IT environment. Or maybe you’re waiting for a tech refresh to motivate you. Alternatively, it could be that you just haven’t made the proper case to management for switching to the cloud – and many times the one who really needs convincing is the Chief Financial Officer (CFO).
If you’re the Chief Technology Officer (CTO) or IT Manager, your responsibility is determining the infrastructure choices that are going to best suit operations at your firm. But those priorities may not line up exactly with those of the firm’s CFO. IT doesn’t always have insight into the financial ramifications of an operations decision of this magnitude. Instead they are typically focused on the other benefits including personnel reallocation, workflow efficiencies, etc.
The CFO, on the other hand, is ultimately tasked with ensuring the company’s financial decisions are appropriate, and therefore, it’s often advantageous to at least attempt to speak his/her language when pushing for an IT change.
A new year, which is just around the corner, brings us endless opportunities to improve. So here’s a list of the top 4 IT resolutions that will help keep your hedge fund safe and sound in 2016.
Public cloud tools and free file sharing services are wholly owned and managed by third-party providers. Because infrastructure costs are spread across all users who are employing the service, each individual client is able to operate at a low cost. Public cloud tools are typically larger in scale than private enterprise clouds, which provide users with seamless, on-demand scalability.
These factors may seem to support the belief that public clouds and free file sharing services would suffice for a business’s basic infrastructure and file sharing needs. However, upon closer examination, it is clear that there are a number of areas in which these tools fall drastically short of meeting the crucial business needs of investment management firms.
Eze Video Debut!
Ever wonder about the layers of security encasing our Eze Managed Suite solution? We thought you had. That's why we created this video, which outlines not only the security protections but also the extensive services available to investment firms and hedge funds that move to our premier cloud solution.
Watch, learn and then contact us for more details.