The billions of interconnected sensors and devices known as the Internet of Things (IoT) is transforming our lives in unprecedented ways. The banking industry stands to gain a great deal from the vast volumes of data the IoT creates and shares. Consulting giant Accenture predicts that the insights derived from this data will enable banks to offer their customers a tailored experience based on their daily activities and needs. Combining customer data with information from social media and other data sources, banks can expand their traditional role of advice-giver to connect customers with other service providers as appropriate. Financial institutions, therefore, instead of being simply a place for financial transactions, can become a one-stop holistic lifestyle facilitator.
The IoT is good news for banks, but its development also signals a need for increased data storage capacities. Banks will need to store the IoT’s expanding pool of data to benefit from it, and they will have to find cost-effective storage solutions to keep costs from spiraling out of control. Many banks are considering new storage ideas that offer more flexibility and keep hardware costs down.
The problem with appliances
Server hardware forms the foundation of most datacenters. These servers, or “appliances,” come with proprietary, mandatory software. The software is designed for the hardware and vice versa. They come tightly wedded together as a package. The benefits of this configuration include convenience and ease of use.
It is a known reality that hardware fails from time to time. As a result, traditional appliances typically come with built-in, redundant copies of expensive components to anticipate and prevent failure caused by reliance on a single point of entry. These redundant components bring with them higher hardware costs, greater energy usage, and additional layers of complexity. When financial institutions, in anticipation of growth events like the IoT, begin to consider how to scale out their datacenters, costs for this traditional architecture skyrocket.
That reliance on a single point of entry, referred to as vertical construction, is another problem that comes with traditional appliances. Think about a million users connected to that one entry point at the same time. That’s a recipe for a bottleneck, which prevents financial institutions from being able to scale to meet the capacity needed to support the Internet of Things.
The benefits of software-defined storage
Fortunately, alternative storage solutions are emerging. Software-defined storage is one of them. By taking features typically found in hardware and moving them to the software layer, a software-defined approach to datacenter architecture eliminates the dependency on server “appliances” with software hardwired into the system. This option provides the scalability and speed that the IoT demands.
Administrators can now choose inexpensive commodity servers if they wish, since software-defined storage liberates the software from the hardware. When coupled with lightweight, efficient software solutions, the use of commodity servers can result in substantial cost savings for financial institutions seeking ways to capitalize on the IoT.
Different datacenters have different needs, and software-defined storage’s scalability is another advantage. A local retail bank servicing a smaller area will have different storage needs than a major financial or investment firm with branches in several countries. An online-only bank will have different needs still. While appliances might be good enough for most of these needs, fully uncoupling the software from the hardware can extract substantial gains in economy of scale.
IT administrators now have the luxury of selecting the specific components and software that best support their bank’s growth goals. While the software-defined storage approach does require more technically trained staff, the flexibility afforded by software-defined storage delivers a simpler, stronger, and more tailored datacenter for the bank’s needs.
Yet another benefit is the elimination of potential bottlenecks that occur in vertical, single-entry-point models, since a software-defined approach uses a horizontal architecture that streamlines and redistributes data. Data is handled faster and more efficiently. This non-hierarchical construction can be scaled out easily and cost-effectively.
Distributed storage for the IoT
A distributed approach to storage infrastructure will benefit the Internet of Things as well. With millions of devices needing to access storage, the current storage model that uses a single point of entry cannot scale to meet the demand. To accommodate the ballooning ecosystem of storage-connected devices all over the world, financial institutions need to be able to spread their storage layers over multiple datacenters in different locations worldwide. It’s becoming increasingly clear that one datacenter is not enough to meet the storage needs of the Internet of Things. Storage must instead be distributed in a way that lets it be run in several datacenters globally.
An agile, future-looking approach
The Internet of Things is set to transform the banking industry. If Accenture’s predictions prove true, banks will become facilitators of a more well-rounded customer experience touching many facets of their lives. This will be powered by the IoT’s massive data sets, which will require massive storage. To maintain competitive advantage, banks must find cost-effective storage solutions. Software-defined storage has arrived just in time, freeing IT administrators from having to buy costly hardware with built-in software and providing a more agile, distributed approach that can grow with the bank into the future.
Stefan Bernbo is the founder and CEO of Compuverde. For 20 years, he has designed and built numerous enterprise-scale data storage solutions designed to be cost-effective for storing huge datasets. From 2004 to 2010 he worked within this field for Storegate, the wide-reaching ... View Full Bio