Insights from Abacus Group

Running Fund Management Applications in the Private Cloud

Abacus Group - Nov 4, 2013

While there still remains a variety of questions surrounding the private cloud, and even cloud computing in general, one of the pressing inquiries among fund managers has been how to leverage these resources to run business applications without compromising operational integrity.  What does it mean to have an application “hosted” in the private cloud? What types of applications are we talking about here?  And why are more fund managers moving their applications to the cloud?

To start, application hosting is a subscription based service which includes all the needed IT and support services, from hardware tools to software solutions.  The applications are hosted at a datacenter and accessed via a private network connection to the provider of these services – usually a cloud infrastructure provider.  The economic drivers for hosting applications are fairly straightforward--firms are able to eliminate the costs and complications of traditional client server software while providing the most current application software with the latest in technology and security.

Hosting applications via a private cloud provider has a myriad of operational benefits, ranging from increases in overall efficiency and workflow to greater system resiliency, redundancy and security.  The majority of cloud providers, particularly in the private cloud sector, put a great deal of emphasis on security and data protection with this being one of the top priorities for managers and CFOs.  Hosting your applications in the private cloud provides better security and data back-up capabilities, while providing quality support services from round-the-clock IT staff.

Depending on the size of your firm and what you are looking for in a cloud hosting provider, deciding what applications to move to the cloud will differ from one company to another.  The primary motivations behind deciding what applications to move usually involve performance and storage costs, but other factors can include regulatory guidelines, security and accessibility to the apps.  With that in mind, most funds are choosing to move applications that include portfolio and order management. However other viable options to migrate over to the hosted environment include any big data applications, disaster recovery programs and any personal documents such as presentations, word documents or spreadsheets.

Private cloud providers also enable much faster deployment and lower management costs and requirements for the fund. Building and maintaining an infrastructure in-house can take months to develop. Once systems are live, firms then invest significant time and costs to ensure the application is running at optimal levels.

Running applications in the cloud also enables fund managers to leverage the full capability of the application without the burden of maintaining a distributed computing environment.  This alone is a task that could take hours each day out of the CTO and technical team’s schedule.

Mobility and accessibility is another big reason firms are choosing to host their applications.  Managers are constantly on the go in today’s fast-paced business atmosphere, so having applications readily available at all times is crucial.  Hosted applications are delivered to your device via the Internet, making your applications available from wherever you can get an Internet connection.

With Hurricane Sandy now in the rearview mirror and in the wake of a number of sporadic power outages on major financial exchanges over the last year, managers are finding that moving their applications to a hosted cloud environment is their best option.  Regulatory oversight is as high as it has ever been and costs for maintaining an infrastructure internally are skyrocketing.  In order for hedge funds and private equity firms to successfully execute their business strategies as we progress towards the New Year, hosting applications in the cloud must be a top priority.

Topics: Private Cloud

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