How strongly do some bankers feel about cloud computing? "We will never buy another data center," said Michael Harte, CIO of Commonwealth Bank of Australia, in an April speech to the Committee for Economic Development in Australia.
"We will never buy another rack or server or storage device or network device again," Harte continued. "I will never let any organization that I work for get locked into proprietary hardware or software again. I'll never tell my teams in the business that it will be weeks to get them hardware provision. I'll never pay up front for any infrastructure and certainly would never pay for any, or rent any, infrastructure that I would never use."
[Ed. Note: Contrary to a rash of media reports in May, though, Sydney-based Commonwealth is not forming a cloud-buying consortium with Bank of America and Deutsche Bank. It is, however, a member of TeleManagement Forum's Enterprise Cloud Leadership Council and is in talks with Amazon about using its web services.]
Harte's comments encapsulate the two clearest benefits of cloud computing for banks: the ability to buy computing capacity, storage, network bandwidth, etc., on demand -- paying only for what's used, rather than buying hardware or software up front or paying a preset annual subscription fee; and the speed and ease of provisioning and managing hardware and software when you tap into a true internal or external cloud.
In fact, in a recent survey of 186 banking technology professionals conducted by Bank Systems & Technology and InformationWeek Analytics we asked bankers who expressed an interest in cloud computing why they care. The majority -- 73 percent -- pointed to the ability to meet user demands quickly and achieve scale in the cloud.
"That's agility," comments Alan Boehme, SVP, IT strategy and enterprise architecture, at ING Americas. "The bottom line is that cloud provides a lot of agility within a reasonable cost structure, which should in turn allow the organization to provide services to its business lines faster. The business can in turn create new products and services quickly and grow the top line. At the same time, the virtualization aspect of the cloud should drive costs down."
Many banks see cloud computing as a way of bringing new capabilities to market quickly, with a variable cost structure, adds David Boyle, a senior executive and technology expert in Accenture's financial services group. "Folks are looking at the infrastructure they use for development and testing, and they're looking to access and leverage lower-cost environments they can tap into via cloud," he says. According to Boyle, one of Accenture's North American bank clients recently mandated that all application development and testing be done through its virtual environment, so it can provision infrastructure in hours rather than weeks.
But not every banker is convinced of the benefits of cloud computing. Nonetheless, our research shows that the majority of bankers are testing and researching cloud environments and are intensely interested in seeing what cloud concepts might accomplish for their IT organizations and the businesses they serve.