Dec 20 2022

What Banks Need to Know About Multicloud

Most institutions stick exclusively with one major cloud platform or another. Here’s what they should do instead.

When it comes to the cloud, the banking industry has gotten a bad rap. Contrary to popular opinion, banks aren’t reluctant to embrace cloud computing. In fact, they’ve been shifting workloads onto cloud platforms and building new applications there for about seven years now, and there’s plenty of appetite for more.

Banks understand that real innovation requires the kind of robust, scalable infrastructure that only the cloud offers. But which cloud? Should they stick with private cloud? This may offer certain security controls, but it denies them access to the kinds of Big Data services available only to users of public cloud platforms such as Amazon Web Services, Google Cloud Platform and Microsoft Azure.

If they do choose the public cloud, which platform should they choose? Most big banks continue to work today with whichever major cloud platform they selected at the start of their cloud journeys, though many CIOs might tell you privately that they wish they had the option of using a different platform when circumstances warrant.

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Why Multicloud Is the Right Vision for Banks

I think that the question of which cloud platform to choose reflects a bit of misguided strategy. Banks’ goal should be a cloud-agnostic environment where all their applications run seamlessly regardless of which cloud platform, public or private, they live on.

Banks should be able to easily migrate applications from one platform to another, and applications running on different platforms should integrate perfectly together. Application development teams, meanwhile, should be able to build apps in Kubernetes containers without having to worry about which platform the app will run on.

DISCOVER: Explore how banks are embracing cloud technology today.

That’s what a true multicloud environment looks like, and it offers several advantages to institutions that get there. First, IT leaders may decide that they’d like to take advantage of a particular service available on one cloud but not another. The cloud platforms are locked in fierce competition, meaning that they will always try to outdo each other with unique new services and innovations. Second, different cloud providers offer different terms at varying times, meaning that shrewd managers can reduce their cloud spending — something that’s more important now than ever — or gain other favorable terms by remaining selective.

Third, and perhaps most important, multicloud environments reduce risk for institutions in the same way diversified portfolios reduce risk for investors. When problems arise on one platform, a bank can shift to another until it’s resolved.

The Technology That Supports Multicloud

That vision has long been elusive, however, because the different cloud platforms simply are not the same, and applications built on one may not run the same, or at all, on another. That’s why banks have tended to stick with a single platform, despite the drawbacks.

Certain emerging solutions are making the multicloud vision clearer, however. Google Anthos, for example, is a product that allows users to manage multiple cloud environments from a single interface, run applications in a consistent manner across those environments and easily migrate applications between them.

DIVE DEEPER: Learn why a multicloud may benefit financial institutions,

Seeing Google’s response to the need for cloud agnosticism, other technology companies have started introducing their own solutions. These include Tanzu by VMware and Intersight by Cisco. When an application is built within a containerized environment, Anthos and these other products make it simple to run the application on any platform, regardless of which cloud environment it was initially built on.

Why Banks Need a Cloud Strategy

However, these solutions are not intended for applications that were originally architected using solutions native to particular cloud platforms. That’s a problem, many banks have found, because it’s just human nature for software developers to reach for tools designed to make their jobs easier — which is exactly what those tools are made to do.

The catch is that once the application is built, and the bank has started to rely upon it, the organization is indeed locked into that cloud platform, unless the application is reconstructed.

The better approach is a cloud-native philosophy using tools that don’t lock banks into any particular cloud platform. Even banks that find themselves deep into one cloud platform today can at least take a more cloud-agnostic approach going forward, keeping abreast of innovations the other platforms deliver, be it on the service or infrastructure side, and then create “sandboxes” where developers can experiment with that platform.

Of course, a bank that’s deep into one platform may find it hard to stay aware of innovations on others. That’s one reason a conversation with a CDW cloud expert can be useful: We’re fully informed about the latest developments on all the major cloud platforms and can discuss how your institution might take advantage, whatever cloud (or clouds) you’re currently running on.

This article is part of BizTech's EquITy blog series. Please join the discussion on Twitter by using the #FinanceTech hashtag.

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