Wednesday, July 25, 2012

State Street's Cloud: It's about going faster

Although it doesn't get into a lot of "cloudy" details, the Wall Street Journal blog "State Street Private Cloud Geared to Make Money, CIO Says" by Clint Boulton gives some good insight into their motivations and overall process.

First, the motivations.

[CIO Chris] Perretta declined to say how much money moving to this cloud would save State Street, though the comprehensive operations and IT overhaul announced in 2010 is expected to deliver “pre-tax, run-rate” savings of between $575 million to $625 million by the end of 2014.  The savings are significant, but Perretta says he is most interested in how quickly and efficiently his staff can move legacy applications to the company’s cloud. “If every CIO in the country asked the CFO what they think about IT, they would say you spend too much money,” Perretta told CIO Journal. “If you ask everyone else in the business, it would be ‘go faster’.”

Sure, money always plays a role. No IT organization doesn't feel cost pressure. Of course, how many groups within an enterprise don't feel that they're under cost pressure? 

But it's noteworthy that the big impetus here was speed--"business agility" to use the marketing-ism. 

This is wholly consistent with what I hear almost every day. Efficiency is important. But cloud is really about opening up new possibilities. This makes it quite unlike many previous technology waves, such as virtualization (at least as first), which primarily lived or died primarily because of the cost efficiencies they supposedly provided. (Whether or not they actually did.)

Centralization, standardization, and rationalization of their infrastructure helped to unperpin the move.

To craft its private cloud, State Street is gradually replacing older computer systems with smaller computers that were bought “bare metal,” which is industry parlance for computers that come without an operating system preloaded. State Street loaded Linux software on the computers, and Windows on others, and began migrating the company’s programs for business analytics, asset servicing and management to the cloud. Once on the cloud, the machines and applications are automated through open source virtualization software, said Sullivan. “We couldn’t turn on a dime the way we needed to, so we wanted to get the cloud platform built, then migrate old applications to cloud,” he said.

At Red Hat, the open, hybrid approach that we've taken with CloudForms helps organizations extend cloud management to legacy infrastructure. But moving from virtualization to cloud nonetheless benefits greatly from process and planning. (We ran a four-part webinar series on the topic together with Kurt Milne of the IT Process Institute.) And, as in the case of State Street, many organizations find that standardizing new deployments on modern volume infrastructure such as Linux on x86 servers is a great first step. 

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