Cloud Computing and RIAs

The changing face of IT

I’m old enough to remember the “dumb terminals” and “big iron” used throughout the financial services sector back in the 1980’s and even into the mid 1990’s. Of course, the proliferation of inexpensive personal computers combined with the graphical user interface was largely responsible for displacing all of those legacy systems, making the Local Area Network (LAN) an integral component to the late 20th century corporate information technology infrastructure.

Networks for All

Along with the LAN came various competitive protocol stacks including AppleTalk, IPX/SPX, TCP/IP, and NetBIOS – each vying for a foothold in the distributed computing wars between competing (mostly) network file & print server operating systems. Small business benefited the most from this competition as even the smallest companies were able to afford corporate LANs that facilitated the sharing of data. Client-server apps grew in popularity due to the proliferation of LANs of all types and topologies including Ethernet, Token-Ring, 100VG, and ARCNet. Finally, TCP/IP rose to the top as the Internet became a ubiquitous phenomenon, even as bandwidth options increased.

A Complete Circle

In the mid-2000’s, virtualization technology came to the forefront when companies such as VMWare and Microsoft essentially gave away the ability for anyone to run virtual machines, thus completing the full circle of distributed computing – from centralized processing coupled with dumb terminals to networked PC’s and then back to centralized processing using VMs launched from a server residing in a remote data center.

Big Data in the Sky

And it’s this virtualization technology that is largely responsible for the instantaneous growth of cloud computing platforms. Having the ability to inexpensively allocate chunks of hardware resources from a single physical machine serving data to multiple disparate parties has redefined the early 21st century IT landscape.

Certainly, the largest investors in cloud computing – Amazon, Google, and Microsoft – have bet big that the corporate world will embrace this model and reallocate their data from an onsite server to an offsite cloud. We think the big providers are going to reap handsome returns on this bet because the benefits to most end users are just too attractive: minimal to zero onsite IT staff/equipment required, access data anywhere from any device, no more worries about maintaining IPSec & SSL VPNs, no more data center maintenance/patching, and the list continues…

But What’s Best for RIAs?

For RIAs, several issues surrounding data integrity, confidentiality, encryption, and access can be raised, particularly depending on which portfolio management software package your firm uses. For our Axys clients, we generally recommend they retain that dataset onsite due to the file structure used by Axys. For those firms that refuse to maintain their Axys installation onsite, we offer to take possession of their data and host that data on their behalf once we create a private cloud infrastructure between their firm (and any other remote office locations) and our data center.

For RIAs looking to experiment with cloud computing, we generally recommend allocating a handful of office-type documents, void of any confidential information, to the host that offers the feature-set and terms and conditions most relevant to the firm’s operational preferences just to evaluate the service. For our clients, we take care of this process for them and setup all of their devices for anywhere access to these files.

If your firm has been contemplating the benefits of transitioning either partially or entirely to a cloud computing IT model, contact us for a free no obligation, no cost consultative meeting. If you are an active social media user, please consider sharing this topic with your acquaintances who may benefit from our services.