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Which Cloud Model is Best for My Firm?

By Olivia Munro,
Tuesday, April 10th, 2018

In the financial services industry, the use of cloud services is now widely accepted for firms of all sizes. Now, startups are almost always selecting a cloud-based infrastructure rather than building out an on-premise IT environment. Meanwhile, established firms are migrating to the cloud when it comes time to do a technology refresh or an office move. Investors are becoming more and more comfortable with cloud services, assuming they are delivered by a reputable managed service provider.

Whether firms are looking to outsource to the cloud or just starting out, it is crucial to understand the differences in the public, private cloud, and hybrid cloud.

Public Cloud:

  • Particularly, for smaller and more agile firms, the scalability, flexibility and ease of deployment with the public cloud are persuasive drivers

  • Examples of public cloud solutions include Microsoft, Amazon and Google

  • They’re typically very low cost

Private Cloud:

  • Private cloud has long been the go-to for financial services firms

  • The private cloud is typically managed by a managed service provider, in many cases, one that understands your business environment

  • Some of the drivers that typically motivate firms to leverage private cloud include performance, security and resiliency for enterprise functionality

Hybrid: combination of the two

  • A hybrid cloud solution is a natural combination of the public and private platforms

  • We’re starting to see a lot of interest from financial firms for this type of a platform that essentially marries the most compelling features to allow firms to leverage a uniquely flexible environment

So which cloud is right for my firm?

The answer: it depends! We’ve long said when it comes to the public vs. private vs. hybrid debate, there’s a time and a place for each. But again, that decision typically comes down to if a firm is more security driven or perhaps requires more flexibility and less control. As a whole, most alternative investment firms and their investors, prefer either a private cloud or hybrid cloud. With this in mind, there are other considerations when a firm is selecting a cloud platform, including:

  • Service and Support: In the investment industry, it is critical that issues are resolved quickly to avoid any unnecessary downtime or contribute to any latency when the firm is trying to make trades or complete transactions according to the markets. You want your IT provider to know who you are, respond quickly to your call and deliver the one-on-one support users expect.

  • Proximity & Location: Depending on your firm’s strategy as well as trading and execution goals, you may require certain proximity to data centers supported by either a public or private cloud provider. It’s also worth considering the quality of service required by your firm as your data travels across these networks. Many investment management firms prefer the comfort and security of private network connectivity, which many private and hybrid managed service providers offer, but few public clouds do.

  • Security Layers: Private cloud and hybrid cloud managed service providers can get the competitive edge when it comes to security. Particularly for compliance-driven businesses or those subject to strict regulations or investor demands, there are still countless vulnerabilities and exposures that public clouds often fail to address. Advancing security features such as multi-factor authentication, targeted attack protection and managed phishing simulations are gaining traction among private and hybrid cloud users who benefit from their providers’ extensive managed security services.

  • Cost: At first glance, public clouds can appear to present a cost-effective alternative to private (or hybrid) clouds. But firms should look for the numbers behind the upfront expenses for a truer picture of the total cost.

    As an example, your per user/per month private or hybrid cloud fee likely includes many of the additional features such as multi-factor authentication, file auditing software, etc. But these services are typically offered ad hoc on a public cloud environment, which means your apples-to-apples cost comparison is not accurate. To incorporate advanced security features, mobile device management and market access to financial counterparties, the line item cost for the public cloud is not as far off as you’d think.

To learn more about cloud computing, visit www.eci.com/cloud or check out our whitepaper to see which cloud solution can help your firm!

Categorized under: Cloud Computing  Security  Outsourcing  Infrastructure  Trends We're Seeing 



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