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Industry Solutions and Trends
The Hybrid Cloud- Harnessing Risk to Reduce Cost and Gain Agility
Jun 22, 2016

In an earlier post I introduced the CRA construct (Cost, Risk, Agility) to encapsulate the market imperatives driving most business technology decisions. It’s a helpful framework to illustrate the value of the hybrid cloud, one of the hot topics in the IT space, highlighting both its benefits as well as some challenges that Juniper is uniquely equipped to address.

The benefits of cloud computing for cost and agility are both compelling and straightforward. Total Cost of Ownership is greatly reduced in a cloud environment, primarily through capital savings (since the need to purchase hardware is minimized), although operating expense is typically trimmed as well. Likewise, Agility gains are significant as the enterprise becomes untethered from legacy systems.

 

It’s the Risk dimension that poses specific challenges for financial services (FSI) firms. The public cloud is often deemed acceptable for certain internal enterprise needs, but not for customer-facing applications. Hence the growing interest in the hybrid cloud, which allows for intelligent routing across public or private networks to optimize benefits based on the scenario. The private cloud addresses some, but not all, of the concerns stemming from sensitive data, however. Every jurisdiction- national or local- has its own set of requirements for data residency, integrity, resiliency, and encryption, governing how data can be shared across physical boundaries. This poses serious impediments for multi-national and global banks, and even geographically dispersed organizations with separate locations dedicated to customer inquiries, loan processing, etc. Striking a balance between public and private clouds is critical for FS organizations to mitigate risk while embracing lower costs, higher agility models in today’s world of ransomware, data phising and other threats. This approach adds complexity but is nonetheless a worthwhile endeavor.

 

FSI firms’ compliance issues are further complicated by the ever- changing and geographically varied nature of regulation. While US firms have been particularly vocal about ballooning regulatory burdens, this is a global issue- German requirements can differ from those in the EU, for instance, giving rise to countless permutations for international dealings. Banks have faced fines reaching into the billions of dollars for not meeting minute details of regulations- even so, the cost of compliance can at times exceed the size of the fine. Cloud implementation cannot be allowed to complicate this environment further.

 

This is where Juniper’s flexible MetaFabric architecture and flexible Software Defined Secure Networks (SDSN) excel in addressing the problem. It’s an open, robust blueprint for hybrid cloud data centers based on a combination of routing, switching, and security platforms. Juniper’s architecture allows for the placement of firewalls on any X86 environment, creating flexibility in placement similar to that banks enjoy on their private clouds, allowing the same internal policies to be pushed into a cloud setting.

 

Other providers have begun to tout cloud-based offerings meeting financial services requirements through country-specific inserts. Although these can be effective on a generic level, most multi-national banks have a need to implement specific, customized constraints that go beyond formal mandates (for instance, unique routines for transactions across certain country pairs). Juniper’s automation addresses the stock financial services constraints, then ups the ante by providing our clients the flexibility to implement the bank-specific routines.

 

As noted above, implementation of a cloud solution cannot be allowed to further complicate an already complex financial services compliance environment. Juniper’s MetaFabric SDSN and automation, as well as our ongoing investments in tailoring our product suite to meet financial services firms’ needs, provides the flexibility to allow clients to pursue the cloud’s critical benefits. We believe that speed need not come at the cost of additional risk, and that Juniper’s SDSN can help advance both goals- I’ll share more thoughts on this point in future posts.

 

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