Aug 12 2014

More Data, More Problems: SDN Could Help Financial Services Get a Leg Up

The speed and flexibility of software-defined networking make it a wise choice for the data-hungry financial services industry.

When we think about the financial services industry — which includes everything from banks and credit unions to lenders and capital markets — we might think that money is what makes the finance world go ‘round. But in reality, for at least the past few decades, it’s the data that’s been worth its weight in gold.

For example, banks rely on real-time, up-to-date market data from the Federal Reserve and other sources to adjust and set their rates on a variety of financial products. Commodities traders, on the other hand, rely on historical weather data to set and adjust their financial forecasts in areas like agriculture and energy.

Because of the simultaneous demands for real-time and historical data, the age-old silos of storage, compute and network make little to no sense in an age in which applications need agility and flexibility.

And when you start talking about agility and flexibility, you have to start talking about software-defined networking.

The Nuts and Bolts of SDN

Before you can delve into the topic of SDN, it’s important to understand the basic foundation of SDN.

According to CDW Networking Inside Solutions Architect Keshun Morgan, every SDN architecture has three layers: 1. The application layer 2. The control layer 3. The infrastructure layer

CDW’s FinTalk blog hosted a podcast on the topic and explored how SDN can improve and benefit the financial services sector. In the podcast, Morgan explains that SDN's three-layer approach to networking is far superior to traditional IT's storage, compute and networking silos.

“SDN will essentially force all of those groups to work together,” he says.

Morgan then gave the example of how SDN’s flexible and automated approach to networking can make financial services more responsive and alleviate some of the average IT worker’s workload of tedious and manual processes.

“If a financial institution is having a quarterly meeting and all of a sudden everyone is viewing the meeting via some sort of HD video stream — like WebEx, for example — that requires an additional utilization of network bandwidth,” he says. “SDN will automatically recognize that there's a need for an increased amount of traffic on the network, and it will provision the switches to accommodate the extra traffic. And that process is all automated by SDN. So a network administrator doesn't have to physically or manually go in and configure a QOS policy for those particular sessions.”

Think About SDN, but Understand It’s Still Evolving

There are a few misconceptions about SDN that Morgan thinks are worth clarifying, and he touches on them in the CDW FinTalk podcast.

"It’s not really one specific appliance. It's an architecture,” he says.

That means that just buying an SDN controller and installing it in the data center does not mean your organization now has a software-defined network. It needs to be holistically thought of and implemented to truly take advantage of the technology.

It’s also a technology that is so new that it’s still being defined. Morgan likens it to the battle that was waged between HD DVD and Blu-Ray discs. There are multiple standards and protocols vying for the SDN title, but a king has yet to be crowned.

So Morgan advises financial services institutions to pay attention and thoroughly evaluate their business needs and objectives as they consider deploying SDN in their environments.

“My advice for customers would be, take your time. Don't necessarily rush into it,” he says. “Trust me, you don't want to end up with a bunch of HD DVDs sitting around your network. You want to have a Blu-Ray player.”

Cathy Yeulet/Hemera/ThinkStockPhotos

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