How Hedge Funds Can Build Business Case for the Private Cloud

How Hedge Funds Can Build Business Case for the Private Cloud

This week on the blog, learn how your hedge fund can build a business case for the private cloud.

If you are a hedge fund considering a move to the private cloud, you will need to build a business case to support your decision making process. Your hedge fund’s business case for the private cloud should work through a number of key steps, which begin with dispelling any commonly held myths about cloud computing.

Dispel the myths of moving to the private case for the private cloud

Myth number one is that the cloud is not as secure as on-premise infrastructure. This myth is perpetrated by high profile stories of data breaches and compromised security. Reputable private cloud providers boast multi-layered security strategies, using edge-to-edge, next-generation methods to prevent cyber-attacks. They also make significant investments in physical security and staff training and implement comprehensive monitoring and intrusion detection tools that alert and lock down, should anything get past the perimeter security.

Myth number two is that the private cloud is not as flexible or customized as on-premise infrastructure. While this can be true of public cloud services, there are many financial private cloud providers who will build a customized enterprise cloud, such as RFA, or work closely with firms to customize a standard offering to meet the specific needs of your hedge fund.

Identify the problems that the private cloud can solve.

Whether your hedge fund lacks insight into customer behavior, market trends, historic performance or market performance, the private cloud can facilitate data processing and analytics that can cope with vast quantities of data in a short time period. Cross firm collaboration between the traders, marketing, and the middle and back office can also be facilitated by the anywhere, anytime nature of the private cloud.

Shrinking budgets, coupled with increased expectations on IT departments can also be accommodated with a move to the private cloud. While not all hedge funds will save money, as costs are highly dependent on specific business needs, they will certainly be able to achieve greater efficiency and business agility.

Finally, increasing competition can put pressures on funds, who are always looking for ways to gain a competitive edge. A move to the private cloud can provide that much needed competitive edge, allowing firms to use the time saving efficiency to focus on innovation.

business case for the private cloudOutline the business benefits of the private cloud.

The private cloud can also provide hedge funds with a secure, scalable and legitimate way for users to store, share and access data, eliminating shadow IT and the use of consumer grade file sync and share services. If your hedge fund has a sudden peak and grows quickly in a short amount of time, the private cloud is flexible and scalable enough to accommodate your changing business needs. Moving to the private cloud will also free up time for IT administration teams to work on strategic, innovative technology solutions rather than on maintaining onsite servers and other infrastructure. If in an in house IT department does not make sense for your hedge fund, moving to the private cloud will provide an outsourced IT staff that functions as an extension of your own team.

Calculate the costs of a move to the private cloud.

It is often cited that cloud computing reduces costs significantly, but this is not always true. The costs of a cloud solution are highly dependent on individual firm needs and the type of cloud model selected. When calculating the costs of  moving to the private cloud, do not run a direct cost comparison between on-site infrastructure and an exact replica in the cloud. Instead, cost up the solution that your hedge fund will need immediately and consider the softer cost benefits of the private cloud, such as the move from Capex to Opex, which bring a predictable, regular cost as opposed to a cyclical technology refresh and ongoing support and maintenance costs. The ability to compartmentalize costs and allocate resources to different parts of the business allows you to identify where your firm’s heavy users of IT sit.

Plan for a seamless migration to the private cloud. 

Finally, demonstrate a well considered migration plan to private cloud services, with identified risks and mitigations outlined.

Want to learn more about the private cloud? Check out our whitepaper on financial cloud services!