Banks coming around to PaaS

by Xtium Research

UBS made headlines recently when Ian Kelly, head of HR technology at the financial services group, said that Platform-as-a-Service (PaaS) is useful for business critical applications, Computer World UK reported. Software-as-a-Service (SaaS), he claimed, is becoming more central to activities. Furthermore, creating an environment that can handle these processes is necessary for day to day operations.

This is good news for the cloud industry after a recent rebuff by Citigroup. Citi SVP Rangesh Jagannathan said that Oracle's new Infrastructure-as-a-Service (IaaS) was not yet developed enough to force the organization to make the transition. It should also be noted that Jagannathan was an early opponent of cloud technology, claiming that it didn't change the way business was done, according to the news source.

No matter how the infrastructure is housed or organized, it amounts to the same software and same applications, Citibank's head of IT argued. This is plainly untrue. Managed cloud hosting translates to dramatic cost savings, guaranteed access to applications and improvements to interdepartmental cooperation and efficiency.

Cloud incentives
A virtual private cloud changes how enterprise applications are managed. Instead of performing in a limited environment where outside employees have to utilize physical methods for data transfers, workers at cloud-enabled companies are connected and working together. Beyond that, the applications themselves can be more data-intensive. Because there is a central network, automated programs like lead generation are more effective because they have more information to work with. Employees across branches and networks can update and access the same database and work together to approach each lead and make sales.

Kelly of UBS said investigating the cloud yielded the same results. After becoming intrigued by the features of PaaS, UBS investigated the security behind the technology. After "extensive due diligence," the company discovered that the encryption and security measures were appropriate for their business practices.

There is opportunity in the cloud, and companies like Citigroup are simply falling behind. The charge by Jagannathan that a virtual private cloud provides no benefit overlooks more than the features of the technology. Such a stance ignores the financial incentives. Assuming Jagannathan truly believes there is no difference between the cloud and legacy systems performance-wise, why ignore the fact that a virtual private cloud can cut costs by more than 50 percent?

Now that UBS has decided PaaS is the perfect environment for their business, maybe Citigroup and other financial institutions will consider it more closely. With UBS' move, it is clear that the cloud is very much on the table for banks of all sizes.