For more than fifty years we have created digital abstractions of physical realities using representations comprised of ones and zeros. These abstractions, representing objects, attributes and business logic have provided us with a very powerful tool for simplifying problems using virtual reality.

Innovation demands looking outside the box and elevating the level of abstraction, creating newer, faster and cheaper next-generation solutions. Often a number of pre-existing technical models and tools act as catalysts for the creation of these next-generation composite solutions.

Cloud computing first arrived as an evolutionary step that followed hosting and managed service models for transacting business. Its promise was in its ability to wrap all the prevailing disciplines and competencies together and assure service levels on technology and processes. But today we find it is well beyond that. Apart from providing a predictive and well-engineered service, cloud promises to unshackle its consumers from the day-to-day obstacles and constraints in doing business. Abstraction is important, as it empowers problem-solving. Transparency is important, as it improves governance. Dynamic scaling is important, as it removes the barriers to realizing business potential. Utility pricing is important, as it increases the flexibility in managing spending. These are the expectations from cloud computing, which is shaping and shifting today’s business models.

Two types of enabling solutions

If we broadly divide the products and services available in the cloud into framework solutions and point solutions, we see a large concentration in the latter category. Point solutions are specialized and limited – they address a narrow problem space but offer deep value there. They can be stand-alone, like SaaS (software as a service) applications, storage or desktop productivity suites. While they can be integrated into an end-to-end cloud-enabled business framework, they do not typically provide that integration out of the box. As cloud computing spirals up the maturity curve, point solution capabilities can be extended by plugging them into the integrated business flow in concert with the overall cloud framework.

The framework integrates all specialized components in a uniform way to provide a defined and customized business value. As the cloud evolves, frameworks are represented by standards, governance and reliable service delivery. Frameworks create a tools-assisted orchestration layer of products and services to deliver the goods in a secure and utilitarian manner.

What constitutes a successful framework?

Framework leaders in cloud services have succeeded in orchestrating high-performance solutions by weaving in a number of tools and techniques. To make their solutions ready for financial services, however, a number of missing service elements will need to be addressed. Security is the first and foremost. Virtualization, used to deliver the goods, takes away transparency and creates pockets of vulnerabilities in access, data hosting, and network security. It does not lend itself well to provide service level assurances, especially for high-speed transactions. Financial services companies have, over time, reduced latencies using co-locations and increased speeds of execution by making investments in fast, resilient infrastructure. The same design principles need to apply for cloud-enabled solutions, and they do not, by default.

A good framework encapsulates tools and methodologies for five key elements of running business functions on the cloud:

1. ‑Assessing the readiness of the business function and related applications on the cloud;

2. ‑Evaluating whether they can be run outside the corporate firewalls on a public cloud, or should they be run in a private or hybrid cloud environment;

3. ‑Using development tools to migrate existing applications to the cloud or building new services;

4. ‑Providing a technical platform to differentiate the services based on their security and service level requirements and route them to the best-fit execution platform in the cloud where multiple choices exist;

5. ‑Providing a management platform and a dashboard to gain comprehensive visibility on where the services are running and their performance vis-à-vis the service expectations.

The Bottom Line

So what needs to be done to transact business in the cloud? Wall Street firms have the challenge of finding a suitable entry point to harness the immense power of cloud computing. The key decision-making points are the realization of deterministic speed, security, cost reduction and selective distribution of the processing across tiered engines according to data and application profiles. This is where the frameworks need to be leveraged. Framework solutions are customized but they use cloud orchestration tools and techniques, add a security layer, distribute the service based on the sensitivity and latency tolerance of the data, provide transparency and manage the end-to-end service levels. They can be engineered to deliver the speed and deterministic system behavior required by financial services, not found in most messaging-based virtualized systems.

Regardless of whether it is for nanosecond negotiations and strikes in cyberspace, or for ERP (enterprise resource planning), customer communications or similar less demanding systems, the bottom line requires the diligence and use of design principles to use the best-of-breed point solutions and orchestrate them using a comprehensive framework.

Shyamal Sen is CSC’s Solutions Director and an expert in Financial Services Technology. He is based in New York and can be reached at 212-251-6229; email: shyamal.sen@csc.com; web: www.csc.com.