More Lessons from CIO Finance Summit

Cloud was a very interesting topic

• A giant bank is building their own internal cloud and do not plan to use an external provider due to the inability of providers to provide enough material to pass audits.
  • There will be no SAN in this environment and there will be no Cisco.  They are looking at 10GbE infrastructure from a startup (won't say who) and scale out file systems.  This is BIG giant, zillion user stuff, hence the 10GbE core infrastructure, but what's interesting is the no fibre channel SAN.  This is a HUGE FC/SAN shop.  They figure once it's cloud, its Ethernet - so why not go all the way.  This is the kind of thought process that gives tons of credence to the hopes and dreams of the Maxi-Scale's of the world.  (And by the way - they really need to change that name.  I think you know why). 
  • This will not replace core application infrastructures – it will be used for test and development and research and development initially.  They it will be used to support a predefined class of applications.  In other words - no one is replacing tried and true stuff with latest and greatest buzz just for sport.
• A large bank in the U.S. is using SaaS – mostly vertical market specific application providers – so they don’t have to run the software in house. They didn’t have the development expertise on staff to keep up with the integration and upgrades so they went to the ‘cloud’  This seems logical, as it's why all the rest of us go cloud too - let someone else deal with the issues.  I just care about the app/data.  Interesting to see a primary bank doing it regardless, as they tend to have the most NIH of all IT shops, along with the most legacy reasons to keep on trucking internally.
• Most attendees said that security wasn’t the impediment, it was auditing requirements.  The providers that exist today cannot meet the demands of regulatory audits – I guess this is a ridiculous process that happens regularly.  Most banks cannot afford to rely on a third party to provide certain information on IT infrastructure in a timely manner.  I personally was shocked by this - I figured security would be the number one barrier for this lot to jump to the cloud, but it just goes to show you - the problem at hand is the problem to solve.  Security is an issue LATER, once something happens.  Auditing is an issue right now.
• Service levels, or lack thereof, were also an issue.  One guy said, "we have a 2 hour a problem resolution commitment to the business for an application and associated an infrastructure.  A service provider can easily match that.  But, when a problem actually happens – we are usually demanded to fix it in minutes.  We cannot do that to a service provider.  They can work within the 2 hour agreement."  In other words, IT can give a 2 hour SLA, but when it goes down, that 2 hours is "worst case", the business wants it up in 2 minutes.  When its outside of your control entirely, it's harder to stand over someones shoulder and say "is it fixed yet?"
• Big insurance company said that they have heard every pitch from cloud providers (from IBM to Amazon) and they cannot make the economics work. 2,000 employees, 300,000 agents make access requirements to application a bit of a challenge.  Isn't the whole point of cloud wrapped up in better economics???  If this is an anomaly, ok, but if its systemic, Houston, we have a problem.

These guys couldn't have cared less about ‘storage’ and ‘backup’ and quad-cores and Nehalems. People three rungs down handle that stuff. They were all about business processes – revenue generating business processes.  These are the people I keep telling industry that you have to get to.  I love the guy buying tape cartridges as much as the next guy, but if you want to matter and you want to be successful long term, you best figure out how to intersect (and influence) decisions far earlier in the lifecycle - lest you be toast.

Vendors

• IBM and Citrix were mentioned frequently as very strategic.  IBM makes sense, but I was surprised to hear Citrix in the same breath.  Good for them. IBM has relationships will all these guys - they run most of the data centers.  Interestingly, these guys direct the technology decisions - IBM plugs in the cables and manages it.   Citrix seems to be in the cat bird seat for the previously mentioned VDI/Desktop issues in the last post.  When asked about VMware, the response was that VMware projects are tactical in nature.  Most of the firms were still doing web servers, internal applications, etc.  When you are talking about 5000 servers, these projects take a while
• Logically, it makes sense with the Mainframe bias that CA would be mentioned, but apparently they were mentioned A LOT!  Mainframe management tools are back in style.  The customers liked the pricing model and consulting expertise.  Go figure.

Long story short - check out what other events CDM Media puts on, this one clearly was a good one. Second, listen to me for the love of god - get yourselves elevated.  Be you a vendor or an IT dude, raise your game up to higher levels.  BPM is a nice acronym - but it has meaning.  It IS meaning.  It's why we are all in this game - to codify processes that make us money or save us money.  Simple as that.  If you can't see the forest through the trees, you'll never realize that you are building your tree fort while the forest is being bulldozed down.  Bad analogy, but you get my drift.

Comments

[twitter.com/Nirvanix]

These comments are definitely in line with what we see. Enterprise customers love the cost aspect of cloud storage, of course, but compliance issues make many offerings a non-starter. We would like to point out, as we did on Twitter, that we are absolutely ready, willing, and able to be part of an overall corporate compliance process. This includes auditing, of course, and we have been through corporate, third-party, and standardized audits on behalf of our corporate financial customers in the past. We recently announced completion of a SAS70 Type II audit and are working with a customer's PCI audit team, for example.

[twitter.com/bobolwig]

Steve, great insight. I participated in a strategy session this week with a large insurance company. Similar scenario...large IBM shop trying to get their arms around cloud computing. Whether it's the latest buzz word or not, it's fantastic to see the interaction and dialog amongst the various IT groups discussing cloud computing benefits and implications. I contend the critical issues surrounding cloud computing are User Experience; and Trust. http://bobolwig.wordpress.com/2009/08/21/padmasree-on-cloud-computing-user-experience-and-trust/