Overcoming ResistanceBy Tony Kontzer | Posted 2009-06-01 Email Print
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What started with the migrations of early adopters toward software-as-a-service applications has become a fast-maturing strategy that has business and it leaders considering any potential cloud service offerings when evaluating new technologies.
Financial services firms have a well-established, and reasonable, resistance to XaaS offerings, citing security and privacy concerns. But even they are finding niche offerings that can help.
That’s the case with Genworth. Formerly GE Financial Insurance, the company was spun off from GE and renamed in 2004, but it had the option of having GE Asset Management continue to manage its IT systems. The executive team decided Genworth should manage IT itself, but it lacked an IT team. So the firm turned to Oracle’s on-demand applications to handle its financial and human resources functions, which contained low-risk data that didn’t cause privacy or competitive concerns.
In 2006, Genworth turned its attention to the more sensitive issue of managing its investment portfolio. The company needed a system in place quickly, and given its experience as a cloud service subscriber, it didn’t take long to zero in on the idea of an XaaS option. That led to Aladdin, a service offered by investment management firm BlackRock.
The Aladdin subscription went live in 2007 with a risk-reporting module that provides Genworth with holding-specific reports that help it manage its portfolio. Last year, it added trading of corporate bonds and other asset classes, as well as integration of the third-party investment managers it works with. If this sounds like a risky thing to place in the cloud, consider that the Aladdin service is not a “multitenant” offering, or one in which individual servers support multiple clients. Genworth has its own dedicated instance of the service.
“It’s not as if every client is running on the same database,” says Kevin Gordon, CIO of corporate systems. “There’s no oppor-tunity for commingling of our data with our competitors’.”
The company declined to discuss financial specifics of its deployments, but McGarry and Gordon have a new appreciation for XaaS that’s likely to change their thinking going forward. For instance, over the past several years, the company has relied on a grid computing strategy to support its actuarial business, harvesting CPU cycles on its thousands of servers and desktops for use when analyzing myriad potential business and economic scenarios. Sometimes, however, that’s not enough. “As we look for additional compute power beyond what we can do with harvesting,” Gordon says, “we’re looking at cloud computing to see if we can supplement that during spikes in demand.”