Why Should I Choose Private Cloud Services Over Free File Sharing Services or Public Cloud Tools?
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.
Features & Capabilities
While there are several popular services which enable file sharing among small groups of people, they are not easily scalable to support small businesses, and can quickly become clumsy and inefficient as the firm grows. Once your firm expands to the point of requiring additional applications such as a CRM, OMS and accounting tools, a free file sharing provider’s capabilities will no longer be enough to support your needs. While this tool may be suitable in helping your firm get off the ground with minimal upfront costs, it is not a viable long-term solution.
While some free public cloud services are slightly more robust, these tools are not nearly as feature-rich as a dedicated private cloud system and are much more challenging to integrate with other systems or applications. For instance, although Gmail or Hotmail may be able to handle basic email needs, they will not provide the full business email experience as is attainable via Microsoft Exchange, and they are lacking many of the features and capabilities that Exchange provides.
Additionally, most free public cloud tools do not support integration with CRM, OMS or other third-party systems which firms will require as they grow. They also lack integrated voicemail capabilities, which means users cannot manage voice messages easily from their PC.
For investment management firms, uptime is crucial to operational efficiency and profitability. Free public cloud services are not accompanied by dedicated, vertical-specific IT support that is incorporated with quality private cloud infrastructures. In fact, several of these providers have experienced outages in recent years, some of which have lasted for hours or days at a time. Just as importantly, if an outage does occur, there is no way to effectively communicate with an IT support expert to address and resolve the issue in a timely manner. With premier private cloud providers, your solution is accompanied by 24x7x365 help desk support equipped with the knowledge and resources to resolve technical issues quickly.
For many free email providers, the primary source of revenue is advertising. This is based on the premise that the company is able to “see” keywords in your emails, searches and other online activities. In a business setting, this could mean that sensitive company or client data is exposed externally. Also, because security measures are typically much more lax than with an enterprise-grade private cloud service, emails and other communications may be susceptible to interception by hackers. This type of exposure puts your firm at risk for a reputation-damaging information breach.
Having a comprehensive disaster recovery solution in place helps protect your fund’s data as well as its reputation. It also instills confidence with investors and other stakeholders while providing a competitive advantage. Public cloud tools may not include a built in disaster recovery solution, so this is a significant additional cost that your firm will have to consider. With a top quality private cloud infrastructure, disaster recovery is built directly into the offering and is seamlessly integrated to ensure your data is protected at all times.
Institutional investors will likely not be comfortable having their information shared via a public file sharing service. These tools have earned a negative perception due to their lack of effective security precautions.
The financial services industry continues to face compliance pressures and increased regulation. One area of particular focus is email and instant message archiving. The SEC currently advises that funds retain all internal and external email and IM business communications, a perspective that is shared by the majority of investors as well. Public cloud and free email tools do not contain effective archiving and recovery capabilities, and could put your firm at risk of compliance violations should an issue arise.
Comprehensive enterprise private cloud services can easily integrate with archiving tools to help ensure that all emails, IMs and attachments are indexed and easily retrievable.
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Editor's Note: This article has been updated and was originally published in February 2012 by Dina Ferriero (Eze Castle Integration).