Managing Global IT: PricelessBy Samuel Greengard | Posted 2008-10-30 Email Print
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Managing one of the largest IT operations in the world, MasterCard’s Rob Reeg must deal with a variety of technologies and issues, including virtualization, server consolidation, storage, mobility, security and green initiatives.title=Building a Better Network}
Building a Better Network
Make no mistake: The credit card business is continuing to evolve. From its humble origins and simple plastic card in 1952, magnetic strips, microchips and electronic systems have continued to redefine the industry. Along the way, the constants have been the need for innovation and vision. Following close on their heels is an ongoing investment in IT systems.
MasterCard certainly understands the importance of IT. At the beginning of the decade, it spent $160 million for a complete IT overhaul that ushered in a component-based architecture. Today, the company is reaping the rewards of that investment, while also benefiting from a society that increasingly eschews cash in favor of plastic.
Ponder a few numbers: MasterCard’s network now processes more than 30,000 transactions every minute of every day. In fact, the company’s transaction volume now exceeds 25 percent of the more than $5 trillion in worldwide credit card and debit card spending.
Red Gillen, an analyst with New York-based research and consulting firm Celent, has stated that MasterCard occupies one “of the sweetest spots in banking imaginable.” Financial services holding firm Raymond James Financial, with headquarters in St. Petersburg, Fla., predicts that MasterCard will continue to grow by more than 25 percent over the next several years.
To ensure that the IT operation keeps pace with business growth, Reeg is intent on building the most robust and agile IT environment possible. “It’s an environment where you really don’t know what that next innovation is going to look like or what the next technology or consumer trend is going to be,” he says. “You don’t know how payments will evolve and what specific form they will take. So it’s important to build a scalable and highly flexible IT environment. Our objective is to make sure we’ve enabled our processing platform before the business need occurs.”
So far, Reeg has done a solid job of ensuring that MasterCard is in the vanguard of IT. He was instrumental in reworking and rewriting the company’s IT systems five years ago in order to approach the marketplace in a more agnostic way.
“We decided to be far more open about the ability to accept transactions in a format defined by the ISO [International Organization for Standardization], so that anyone could connect to our systems,” he explains. That initiative sent ripples throughout MasterCard and beyond. It shaped the way the company approached software development and guided IT along a path of developing systems that “put intelligence at the edge of the network.”
Instead of simply routing transactions directly into central processing facilities, MasterCard has built a hub-and-spoke IT environment that directs transactions to the point at which they can be processed most efficiently. This rules-based architecture, which uses both mainframes and PC-based servers (along with proprietary software), monitors performance in real time, thereby avoiding slowdowns and other network bottlenecks, while steering clear of local bandwidth limitations and fluctuations. “This best-of-breed approach gives us the best of both worlds,” Reeg points out.
MasterCard was the first card issuer to implement VPN technology, which it still uses widely. However, Reeg is now steering the company toward the next generations of secure transaction processing by turning to Multiprotocol Label Switching. He expects the technology to simplify data center management by reducing the number of physical hubs the firm operates—all while incorporating more sophisticated risk-scoring algorithms. At the same time, Reeg is embracing a service-oriented architecture to simplify the management of software assets and build a more agile IT environment.
The firm’s 25,000-square-foot global technology operations center, located in O’Fallon, Mo., is a model for state-of-the-art systems, including several z/OS IBM mainframes and hundreds of IBM AIX, Sun Solaris and Microsoft Windows servers. The data center currently holds more than 100 terabytes of data, using both Oracle and IBM DB2 databases, with more than 1.8 petabytes available overall.
MasterCard uses IBM Tivoli systems management software, along with applications from BMC, CA and EMC to manage the environment. It also relies on network-attached storage and storage area networks—as well as virtual tape devices from EMC, Hitachi Data Systems and others—to provide business continuity and disaster recovery.
Not surprisingly, the enormous size of the data center, along with the growing demand for processing power, has prompted MasterCard to aggressively pursue a virtualization and consolidation strategy. In 2003, the company began deploying VMware in the data center and across its network. “We’ve been able to shut down a lot of inactive computers and become more green,” Reeg says. Virtualization has also helped reduce administrative complexity and trim energy costs.
The flexibility of the IT environment allows managers and business analysts to build data marts quickly and make all the information accessible through a client-server architecture on the front end of the business. Such flexibility and agility are essential, Reeg notes.
MasterCard analysts can examine current trends, patterns and changes at any given moment, enabling the company to adapt quickly to changing business conditions. It also continues to develop more advanced scoring models, algorithms and real-time risk products by putting its data to work in new and sophisticated ways.