State Street Puts Agility in The Fast LaneBy Samuel Greengard Print
This global financial services provider uses virtualization, a service-oriented architecture and a zero-footprint IT model to react quickly to changing conditions.
Ask any CIO what it takes to gain a competitive advantage in today’s business environment, and you’re likely to receive an earful about “speed” and “agility.” But behind the buzzwords and the emphasis on big pipes and fast processors, there’s this often-overlooked fact: No amount of technology can transform a laggard into a leader.
“Success is as much about strategy as it is about the hardware and software in place,” says Chris Perretta, executive vice president and CIO for Boston-based State Street. “We look at technology as nothing more than an enabler.”
This business-and-IT philosophy has helped State Street shift its operations into the fast lane. The $11.8 billion financial services firm, with offices on four continents and an IT infrastructure that processes more than $1 trillion per day, has developed a business framework that uses virtualization, thin-client systems, a service-oriented architecture (SOA) and a zero-footprint IT model to open business offices in weeks rather than months, and to shift manpower and resources as needed. “In turbulent times, it’s more crucial than ever to take advantage of opportunities,” Perretta points out.
The ability to act and react quickly to changing business conditions has positioned the firm as an industry leader, even during a period of economic woes. State Street—which serves institutional investors and corporations and provides services such as accounting, foreign exchange, cash management and securities lending—watched profits zoom by nearly one-third from 2005 to 2007.
Make no mistake, State Street is equally adept at managing people and systems, and at building synergy across a trail of business and IT practices. When the company established a new European transaction-processing center in Krakow, Poland, in the spring of 2008, it assembled the technology and systems to have the facility running within about two weeks. The 125,000-square-foot building—which handles accounting, back-office services and other functions for 150 employees—doesn’t have a single server on-site. Instead, State Street relies on WAN acceleration technology to enable high-performance connections between the office and the global and regional data centers that house business applications and data.
In fact, State Street relies on a zero-footprint model for many of its global facilities. Usually, the company is able to provision resources and have an office or operation running within a few weeks.
“We are able to dramatically reduce infrastructure provisioning by leveraging applications and support servers already operational in our hardened data centers,” Perretta explains. “We can achieve extremely high service levels and high availability.”
Equally important, this approach helps the company move quickly when a business opportunity or need arises. “We have to focus only on the relocation of business staff, since there are no systems or data that need to be relocated or recovered,” he says.
Because the data centers support highly scalable systems, adding business staff on short notice doesn’t necessarily require an additional investment in office space. The company can tap existing offices with space available to accommodate more employees.
Finally, the overall infrastructure makes business continuity simpler and more robust, and provides a foundation for “greener” business operations. Heavy-duty heating, cooling and electrical power are not needed for office locations. In addition, fewer support staff are required, further reducing the firm’s carbon footprint. In fact, with less equipment and fewer provisioning tasks, IT staff can focus on the strategic elements of data operations and build-outs, rather than the tactical side of constructing new facilities while patching, upgrading and ripping out others.
Virtualization is a key piece of the IT puzzle. State Street relies on more than 9,000 server images in a variety of operating systems, including Windows, Solaris, AIX and Linux. About half the servers use VMware, Solaris 10 and AIX LPAR/Micro-partitions. The organization also uses Acopia (now F5) to consolidate and virtualize non-structured data onto network-attached storage devices.
“Virtualization has helped drive the zero-footprint initiative,” Perretta says. “It’s allowed us to forgo additional investments in hardware and has provided a great deal of flexibility, while boosting speed and performance levels.”
Ultimately, State Street’s IT initiatives have a common goal: to accelerate value for customers and provide a seamless experience for all users. Processing upward of 150,000 trades per day and re-lying on more than 1,500 core business applications, the financial services behemoth has focused on keeping its three worldwide data centers and various regional facilities up to speed. “We operate in a turbulent, fast-changing industry,” Perretta says. “The ability to respond quickly to opportunities and customer needs is a huge differentiator.”
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