Waters – Hybrid Clouds

There is constant talk of whether cloud computing will make its way onto Wall Street.  I’m not talking about the use of web based CRM, but realthanks to dominicspics on flickrshared storage and compute power cloud computing.  The hybrid idea is an interesting one as it could allow firms to scale quickly without keeping the huge amounts of excess capacity they currently need in the event of unforeseen market events.  Some excerpts of my commentary:

Hybrid cloud is still probably a couple of years away for even the more experimental financial services firms, while they focus on virtualizing and cloud-enabling their applications in-house. But eventually the hybrid-cloud model could be the solution to financial services firms’ cloud security worries and bridge the confidence gap. As time goes by, we will likely see applications being developed for deployment on hybrid clouds, although probably not this year, says McPartland.

Latency is another problem: Firms are reticent about deploying cloud in the equities space and other latency-sensitive areas. In a recent survey of equities technology executives in sell-side firms, the Tabb Group found that only 4 percent of firms questioned actually had cloud deployments and most of those were internal, according to McPartland, the report’s author. “Bulge-bracket firms are experimenting with cloud for things like back testing and other non mission-critical activities,” McPartland says. Seventy percent of firms questioned do not have a cloud strategy at this time, although a quarter of firms said they were looking into it. Seventy-two percent of those questioned said that security was a concern.

No one is using cloud for real-time equities trading applications, McPartland says, because it does not yet meet the low-latency demands of algorithmic trading.

Read the full article here.

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