What's in Your Grid?
The heavy analytics component of credit issuance makes the card industry a prime candidate for grid technologies. Roy E. Lowrance, chief technology officer for Capital One (McLean, Va.; $46.3 billion in assets), estimates that the company will realize savings of 30 to 35 percent on infrastructure costs from its grid deployment. Initially, Capital One's grid environment will include applications for performing analytics and credit-decision modeling. Other potential applications include fraud detection and anti-money laundering controls. The company declined to describe its vendor relationships at this time.
Capital One entered the prototype phase in the first quarter of 2003, by rebuilding an application using grid technology and measuring the benefits. After finding that "It works just like the vendors claim it's going to work," Capital One entered a pilot phase for a subset of its business users, says Lowrance. "We are deploying the technology for limited availability, with a lot of care and feeding to be sure that things don't go wrong," says Lowrance. "We'll be in pilot phase probably for about a year or so, and then we'll turn it loose."
One significant point, says Lowrance, is that department managers have to be weaned from having their own dedicated computer hardware. "Because of the way the Unix systems were deployed, many of the business people are used to owning their own hardware," he says. "So you actually have to go back to them and show them that owning the hardware actually costs them more and gives them worse performance."
Furthermore, the grid managers have to institute a method for billing the department managers for computer time and service levels. "It's a change in charge-back algorithms, which are actually incredibly hard to figure out," says Lowrance. "All of a sudden, you're sharing time in a processor complex - how much should you be charged? How much do you overbuild the capacity? How do you schedule the work?"
But the end result should be worth it from a technology management perspective, especially in retail finance, where a successful ad campaign or promotion can lead to a significant spike in activity. "If you've got isolated machines and you have an unexpected demand, then actually building up the capacity on those machines can take weeks, because you have to order the parts and install them," says Lowrance. "But with a virtualized environment, if you have spare capacity in the grid, you can just reallocate the capacity," he adds. "You can provision in minutes instead of weeks."