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Digital fortress Modern data centres with no risks allowed | Pages 4-5

Digital focus Allowing firms to zero in on the essentials | Page 7

The global cloud OCTOBER 2014

In association with NTT Communications and NetApp

Grabbing financial services by the horns Eight-page report on how to realise your potential and bring your business into the modern world

A SPECIAL REPORT ON BUSINESS TECHNOLOGY, CREATED BY NTT COMMUNICATIONS AND NETAPP AND DISTRIBUTED WITH CITY AM


Business Technology 路 October 2014

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A SPECIAL REPORT ON BUSINESS TECHNOLOGY, CREATED BY NTT COMMUNICATIONS AND NETAPP AND DISTRIBUTED WITHIN CITY AM

The global cloud

The way I see it... Masaaki Moribayashi

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INANCIAL service companies are slowly moving towards the cloud to help them reduce costs and achieve scale and flexibility. Research by NTT Communications showed that for 67 per cent of financial services respondents, cost savings were the main driver to adopting the cloud. However, complicated legacy infrastructure and existing contracts were slowing them down. Financial services, more than any other sector, has a high proportion of legacy ICT which is reliant on application-specific hardware. Some financial service companies have existing contracts with hardware licences or data centres, which can make moving to the cloud complicated. For example, they might have a three-year contract with one data centre and then another one with a contract of five years, while they might also have a hardware licence that lasts two years.

Searching for a realistic cloud solution in a complex world Depending on the amount of legacy applications and complexity of infrastructure, it can take many months or years to move over to the cloud and it is not something that most organisations can do in one step. The best way for a financial service company to move to the cloud is to take a step-by-step approach and move one application or data centre at a time. Providers such as NTT Com can help companies with identifying which applications might be suitable to move over into the cloud and which might not be. By working in partnership, legacy and cloud infrastructures can be complementary to each other. This can not only fill infrastructure gaps, but help companies upgrade and rebuild their information architecture. There will be cases where their legacy systems might not fit to the cloud environment and they might be better off managing those hardware and systems themselves. Normally banks do not like having core banking systems in the public cloud.

Masaaki Moribayashi is managing director, NTT Europe

A good way to move to the cloud is to take a hybrid approach. Although for hybrid architecture to work best, different parts of the cloud, service provider data centres and corporate data centres must be managed and secured in the same way. Once in the cloud, the benefits for a company are big. The number of servers a company uses can be reduced and they can save resources by outsourcing the managing of the cloud services to providers. Financial service companies can also benefit from being able to have scalability, low latency and flexibility globally. If a global financial services player would like to immediately increase its emerging markets resources, it is much easier to do with cloud services. But it is vital they choose a provider that they trust and can support organisational policies and procedures, alongside any regulatory and compliance requirements and national security statutes. Cloud security is paramount and

risk-management systems must be built into the service. It is also imperative that a company knows where its data resides. It is possible through NTT Com to keep your data in the country that you wish. For example, if a company wishes to have its main data centre in one country and a backup in another, this can be done. The customer can put their data where they want it to be, they know where their data is, whereas typically in a public cloud you do not. Whatever the situation, the customer always remains in control through a portal connected to the NTT Com network. If an outage occurs, or if there is something wrong on the cloud side, they have the ability to find out immediately. Although financial service companies have been slow to adopt the cloud, a hybrid approach and finding the right provider can help break down those barriers.


A SPECIAL REPORT ON BUSINESS TECHNOLOGY, CREATED BY NTT COMMUNICATIONS AND NETAPP AND DISTRIBUTED WITHIN CITY AM

Business Technology · October 2014

The global cloud

Cloud migration doesn’t have to be painful By Joanne Frearson

THE INTEGRATION of IT systems into the cloud can be complicated, and highprofile press stories of companies losing millions of pounds, thanks to problems in the migration of IT systems, have left many nervous. A review earlier this year by Sir Christopher Kelly into the near collapse of Co-op Bank, following its merger with Britannia, showed that problems in the migration of IT systems contributed £300million to Co-op’s eventual £1.5billion capital shortfall. Len Padilla, vice president of product strategy at NTT Europe, says: “The risk appetite is usually very low for IT organisations in financial institutions. Systems are very critical and mistakes can have a big impact on earnings and even close down trading. They are not in the habit of making adventurous technology decisions.” But financial service firms should not fear – when IT systems are integrated properly through the right partner and tools, they can bring many benefits and give companies the competitive edge. Workers can become more flexible and use cloud-enabled services which allow remote access to data and take advantage of bring-your-own-device functions, helping the company to be more agile and efficient. The way to integrate IT services

Len Padilla

properly, Padilla says, is “understanding the relationships between different pieces of I T systems a nd t he dependencies between each other. It is something that has not always been done up to now. I think better tools will help with that in the future.” Cloud migration tools can help both on the technical side and on the project-management side. These tools understand where the complexity is, where the risk is, which pieces are candidates for moving into the cloud and which aren’t. “It leaves the organisations with time to focus on the things that put them ahead of the competition,” Padilla says. “There are some good insight tools, deep monitoring tools that really help companies analyse the performance of applications and the performance of systems, in ways people were not able to do probably five years ago. It is basically taking what everybody now is calling big data and taking that approach to understanding systems. “It really provides customers with a lot of insight into which piece of the application is working well and which isn’t. As things get more and more complex, the time it takes to find the root cause of some problems gets more and more difficult. “These kinds of tools can help you quickly zero in on whether it is a web system or an internal financial reporting system [that is the reason it is] taking so long to get these numbers.” Padilla believes the migration system that helps companies move to the cloud will continue to get better, and by taking a big data approach it will help firms find the cause of problems within their IT systems. He says: “It is going to be complicated enough as it is, but the more you understand it through better use of tools, the more chance of success you have with migration.” Companies should not fear the cloud, and as long as the right partner and tools are chosen migration doesn’t have to be complicated.

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For finance companies, speed is of the essence FINANCIAL service companies trading between markets need to deliver services quickly and efficiently to be able to stay ahead of the competition. When someone wants to trade in international stock markets, the speed with which this is done is crucial. Missing out on a trade by milliseconds can mean the difference between making a profit or not. But it can be challenging for a financial service company to set up networks, ICT systems and data centres to be able to run its trading operations smoothly. New technologies can help drive forward a business, but the challenge that CIOs face is to do this without compromising security or letting costs spiral out of control. To be successful, a system has to be costeffective, reliable, flexible, secure and sustainable. IT departments are under pressure to do more with less, and some financial derivatives dealers, such as CMC Markets, are turning to providers like NTT Com to help them with these challenges. Bob Collins, head of technology infrastructure at CMC, says: “Our online business relies heavily on NTT Com to deliver very high-quality, mission-critical internet access, which allows us to provide our services.” CMC Markets’ online trading platforms facilitate CFD (contract for difference) trading and spread betting for more than 75,000 active trading clients around the world. It has more than 5,000 products on its platforms across shares, indices, commodities, treasuries and currencies. By using NTT Com’s services, CMC Markets gets access to a comprehensive range of networking, data centre, cloud and security services. NTT Com has the world’s second-largest Tier-1 IP backbone, with native network presence in 150 countries. It has more than 20 data centres across EMEA, 130 worldwide and global cloud platforms which can assist CMC when it needs it.


Business Technology · October 2014

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A SPECIAL REPORT ON BUSINESS TECHNOLOGY, CREATED BY NTT COMMUNICATIONS AND NETAPP AND DISTRIBUTED WITHIN CITY AM

The global cloud

Modern data centres We have stringent security processes in place, says data expert By Joanne Frearson

DATA CENTRES are like bank vaults, g uarding the valuable infor mation which ties together the world’s financial systems. Whenever somebody takes money out of an ATM or a bank makes a multi-million pound trade, information is sent to a data centre which turns it into a transaction. The data centre is the backbone of how transactions take place, and any problems with them can shut down the banking industry. Earlier this year Halifax, Lloyds, Bank of Scotland and TSB cash machines nationwide shut down for a number of hours due to hardware failure in a data centre. Lester Towse (inset, right), director of data centre operations, cloud services at NTT Europe, says: “Data always exists once it is created – you have to manage it through its life. That is a key thing. What happens when you have a hard drive fault with data on it? Where does it go? Where does it end up?” As data centres are like de facto banks, they need to be built with security in mind. It is about ensuring the data is always safe, available to the right people and that the system is continuously on. “We have to make sure the design of the platform that is being put in place is more than adequate. That it is robust, secure and maintained,” Towse says. “We have stringent processes around data cleaning and ensuring data protection – nothing goes off site without being completely cleaned or destroyed. We do not want to be complacent because security does not stand still.” What security certification a data centre has can help determine how secure a provider is. Len Padilla, vice president of product strategy at NTT Europe, says: “There are a lot of different certifications associated with different kinds of security around the data centre industry. Some of them are physical, some of them are network focused and some of them are focused on payment card transactions.

Case study The Edward Snowden effect: why firms have changed their cloud-buying behaviour

The revelations of NSA whistleblower Edward Snowden (right) have led firms to be more careful about cloud providers

THE REVELATIONS by Edward Snowden that the National Security Agency (NSA) and other intelligence services have been engaging in covert data-gathering and cyber-surveillance programmes has made an impact on information and communications technology (ICT) decision-makers. According to an NTT Communications study, around 88 per cent of ICT decision makers were changing their cloud-buying behaviour as a direct result of Edward Snowden’s allegations. In particular, 84 per cent that felt they needed more training on data protection laws. It showed businesses were acting to protect their data, scrutinising cloud providers more closely before they made a decision and making sure they kept to jurisdictions which they felt they were protected in. The study, which surveyed 1,000 ICT decision-makers from France, Germany, Hong Kong, the UK and US, showed 97 per cent of EU and 92 per cent of US respondents preferred cloud services located in their own region. Around 62 per cent of those not currently using these services felt the revelations prevented them from moving into the cloud, while 16 per cent were considering delaying or cancelling contracts with providers. Just over half of participants were also

“Looking at those as a whole will give you a pretty good indication of how serious a given cloud provider and a given data centre provider is about security.” For example, if a provider has an ISO 27001 it means they have an established business continuity plan both for themselves and customers, while a PCI-DSS means they provide a secure system for card transactions. Regulation of the jurisdiction in which the data centre resides in will also determine how secure it is. Laurence James, NEMEA product alliances and solutions marketing manager at NetApp, says: “We are seeing more and more requests from tenders about where their data will be stored. You have to know what the legal ramification is. It is becoming a mandatory requirement now.” The location of a data centre and its proximity to the trading hub can make sure transactions run smoothly and that

carrying out greater due diligence on cloud providers before choosing to sign up to a service. The survey also examined whether ICT decision-makers agreed with proposals by German chancellor Angela Merkel for separating data networks. The Snowden revelations brought about discussions on the possibility of ring-fencing nations’ communications, so that data would fall under national regulations. These plans were taken a step further by Merkel, who in February 2014 made a call for European internet services to be entirely separated from the USA. She said: “We’ll talk with European providers that offer security for our citizens, so that one shouldn’t have to send emails and other information across the Atlantic.” There were 82 per cent of respondents who agreed with separating data networks. However, ICT decision-makers still very much valued the cloud as a platform for boosting business agility and technology innovation, and there was optimism that the industry would address these concerns. Around 71 per cent of respondents believed their data would be safer in some form of cloud platform, subject to guarantees over data sovereignty.

any increases in things which need to be processed can be handled without systems crashing. A data centre that uses flash storage – which can be accessed much faster – can scale up services when they require. James says: “That is one of the big changes in the industry – flash storage. This has massively changed the dynamic within the data centre, because in the past if I wanted to create extreme performance I typically would have over-provisioned. “It gives them that capability to respond to requirements and respond to changes – you have to be able to move workloads and you have got to be able to do this non-disruptively. You have to move data around, but without it affecting the applications.

“The biggest message for financial institutions is flexibility. Financial institutions have everything from high frequency trading right through to portfolio management. High-frequency trading demands millisecond or microsecond latencies and having a consistent environment. “There are examples where we have implemented flash in portfolio management to enable customers to access portfolios quickly without delay. That is what we see as a big driver.” Data centres hold valuable information and connect financial systems toget her a rou nd t he world, and making them as secure as possible will help make sure transactions will be able to flow smoothly across the globe.


Business Technology · October 2014

A SPECIAL REPORT ON BUSINESS TECHNOLOGY, CREATED BY NTT COMMUNICATIONS AND NETAPP AND DISTRIBUTED WITHIN CITY AM

The global cloud

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with no risks allowed How hybrid solutions could ease fears of system failures

By having a plan already drawn up, NTT helped rebuild communications infrastructure after the 2011 tsunami

A speedy recovery plan to ease the tsunami aftermath By Joanne Frearson

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N MARCH 11 2011, a massive earthquake and tsunami hit the Tohoku and Kanto regions of Japan, causing power outages on a scale never before seen. Eight million houses were affected. The disaster caused unprecedented damage to NTT East communications equipment. There were large-scale power outages following destruction to exchange buildings, telephone poles and transmission lines. People were stranded and could not communicate with the outside world. NTT put together all of its resources to develop a recovery plan. The extent of the damage was assessed and a means of communication was established so people could check on the wellbeing of family and friends who were in evacuation centres and cut off from being able to send messages. Evacuation centres were equipped with emergency use public phones, internet connections and Wi-Fi services. As a part of the recovery

plan, NTT East created a Disaster Countermeasures Office which kept communications equipment going in the face of large-scale power outages. This centre also implemented stopgap measures to restore connections in its communications networks. Garry Sidaway (inset), SVP Global Strategy, NTT Com Security, says: “It was done within 48 hours, looking at where the routes were, what was available, what was viable in terms of communication channels and working with the rest of the network providers to route this through appropriate communications. The ability to move data quickly through automation is vital for critical national infrastructure.” One of the reasons NTT was able to do this was because it had a disaster recovery plan in place, which allowed the fi rm to move capacity through the regions very easily and quickly to ensure they could switch routes. Sidaway says: “NTT has invested heavily in ensuring it has the infrastructure from a data centre and cloud perspective, so it can switch routes easily and efficiently. This investment has ensured that information security

and risk management are embedded into NTT services. It looks at advances in technology around machine learning, for example, which enable machines to make automated decisions based on our expert knowledge. “We ensure that we make our experts more efficient by leveraging their expertise effectively,” Sidaway says. “We make sure we proactively manage infrastructure and security and switch things easily and in an automated fashion. This is not only important from a national infrastructure perspective but from a business perspective – knowing you have the capacity to power your business and the agility to switch systems because information security and risk management are baked in. But many companies do not have a plan in place in case disaster happens. Sidaway says: “If we look at our global threat intelligence report, more than 70 per cent of organisations we dealt with didn’t have any incidentresponse planning in place. This is

something we get involved with – making sure companies understand the importance of having a plan, the appropriate information and security measures, and to make sure they are tested. “The critical thing is that they focus on information security. It is about how you do that in a secure way, what the architecture looks like, who has access to that, what happens if the server fails.” A disaster recovery plan should also look at working with partners across the industry. According to Sidaway this could mean doing things they might not otherwise do, such as collaborating with a competitor. Collaboration with other organisations helped NTT provide communications to local authorities, medical and educational facilities. As many as 10,000 personnel were involved in restoration at its peak and as a result of their efforts, almost all of the exchange buildings in affected areas had been restored by the end of April 2011, just over six weeks after the disaster struck.

NEARLY £1billion of digital banking transactions take place in the UK every day, according to a report by the British Bankers Association and EY – and if these systems fail, it could be catastrophic for the industry. As there is so much at stake if a system fails, financial firms are wary of moving all their IT into the cloud. But such risks can be mitigated if financial services firms use a hybrid approach to integrating their systems into the cloud. Len Padilla, vice president of product strategy at NTT Europe, says: “What companies really need to do is take a good look at their IT estate. One way is to divide things up into the security needs of the data. The other thing is to divide things up into the way things connect. “What it really comes down to is slicing the existing infrastructure into different sections according to data sensitivity, and deciding what the appropriate security domain should be for each of the different data. The very secure stuff should always be in the corporate data centre. “A good starting point for financial institutions is to work on migrating the things related to public communications, extranet or outreach systems first. These include anything to do with the web, corporate reports, blogs, email, instant messaging, that can be done via the cloud instead of a corporate data centre.” Data encryption can provide peace of mind for financial services companies that the stuff they outsource to a cloud provider is secure. Padilla says: “Encryption is done in a way that makes sure that nobody can see the data who doesn’t have the keys. That is probably one of the most important pieces in moving sensitive information to the cloud. We not only help customers manage the technical issue of encrypting the data, but the key infrastructure as well.”


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A SPECIAL REPORT ON BUSINESS TECHNOLOGY, CREATED BY NTT COMMUNICATIONS AND NETAPP AND DISTRIBUTED WITHIN CITY AM

The global cloud

Setting the trend for an agile, fully global network By Joanne Frearson

FINANCIAL service companies want agility when they undertake transactions with their clients. They want the flexibility to be able to interconnect with data centres, stock exchanges and service providers to exchange information as quickly as possible. Markus Noll, senior pre-sales consultant at NTT Europe, says: “The trend that we are seeing more and more is for fi nance companies, exchanges and data vendors to set up a community in one big data centre, where you can simply connect to all members of a group.” By being able to interact with other providers in a community, financial services companies have the ability to be agile and make connections quicker. But in order for firms to be able to connect quickly, they need the use of a low-latency, reliable network system. NTT Com provides financial companies w ith the infrastructure to be able to do this and is also building foundations necessary to support these communities. Joerg Pauli, head of pre-sales at NTT Europe, says: “We try to be able to build these kinds of communities or build at least the platform which can provide these services to the financial industry. “We have a reliable network, we have our own cable systems, especially in the Asian region, which are positioned to avoid earthquake areas, we are faster and we have more bandwidth than other systems. Our data centres are really near to the stock exchange. It gives our customers a big advantage.” NTT Com uses both undersea as well as land-based cables in its network. Banks can buy bandwidth from NTT Com between the points they want to transfer information and connect to other members of the community. If a fi nancial company does not have the hardware or in-house cables to make these connections, it is possible these can been built for them. Finance companies that use NTT

Deutsche Börse chooses NTT Com to expand into Asian markets

Case study

THE DEUTSCHE Börse Group is one of the world’s largest stock market organisations, generating total sales of nearly €2billion in 2013. It regards itself as a service provider that paves the way for investors, financial institutions and businesses to enter the global capital markets. Its product and services portfolio incorporates the entire process chain, from equities and futures trading via provision of market data through to the development and operation of electronic trading systems. To ensure that key business processes function as efficiently and free of interference as possible, the technical infrastructure has to meet the highest standards. Global coverage, performance, availability, minimum latency and an Com’s systems also have the advantage of knowing it builds each network, data centre or cable route identically. If companies want to use other NTT Com services around the world, they know it will be able to fit their purposes as it will have the same quality everywhere. Noll says: “Everything is the same

attractive cost/benefit ratio are key factors in this. Objectives As far as Deutsche Börse is concerned, failsafe, high-performance, agile systems form the essential foundation on which their IT requirements are based. Challenges Those companies developing or providing premium services for/to the finance industry must ensure that they deliver secure, high-performance communication links. However, the costs of setting up and operating a proprietary communications infrastructure are often high. In order to ensure the future of its performance capability in Asia, Deutsche

on a global basis. Customers can rely on us – if a customer buys a network service in Hong Kong they can be sure to get the same quality in Singapore.” But the key to having a fast processing time is to have the data centre and networks as close as possible to each other and the stock exchange.

Börse has enhanced its backbone, now taking in the Far East. One of the service providers that Deutsche Börse selected was NTT Communications, since the ICT solutions provider can provide the necessary latency and back-up capability for submarine cables to Asia via the terrestrial TEA cable. “In our view an important issue, besides latency periods, was that a portion of these data communications travel via land,” says director Michel Girg, head of section of infrastructure support at Deutsche Börse. In October 2012 representatives of both parties signed cable services contracts, which were extended for a further year at the beginning of 2014. Benefit Data services went operational in December 2012. “The period between ordering and service delivery was only a few weeks, and so we are very satisfied with the technology supplied by NTT Communications,” Stephan Hoppe, project manager at Deutsche Börse, commented. NTT Communications has been delivering high-speed communication links between Frankfurt and Hong Kong and between Hong Kong and Singapore since the end of 2012. These networks are extremely important to Deutsche Börse, since the company views Asia as a market of the future and has already actioned local client links in Singapore, Hong Kong, Seoul and Taipei.

Noll adds: “The trend for financial service companies is to consolidate and enter communities. The trend we see in cities is for data centres and providers to inter-connect with all the big exchanges. The big exchanges are putting access points in their buildings to make these interactions possible.

“ W hat is impor ta nt is t he combination of everything – the data centres, the cable systems. How you link everything together.” By financial companies being able to interconnect through a community they have the ability to be able to make transactions fast for their clients.

Efficiency and savings are the key benefits BEING PART of a network which gives financial service firms low latency not only makes transactions between data centres, exchanges and service providers quicker, it can also help them improve efficiency and reduce costs. By using network infrastructure such as NTT Com’s, which can link different providers together so they can relay information between each other at high speeds, a financial

service firm can substantially reduce its costs. That is a major focus for NTT Com, and the firm is building communities that have this ability to make things more efficient. Markus Noll, senior pre-sales consultant for NTT Europe, says: “There is a growing trend to try to host communities which undertake transactions between each other quickly. By being as close as possible to exchange venues, data

centres and systems providers, it saves costs for everyone. That is a trend.” For financial services firms which are using an infrastructure provider such as NTT Com, it helps to control costs which could snowball if they created their own infrastructure from scratch, which would involve building cables underground, data centres and hardware systems. Instead, companies pay for NTT Com’s services on contract.

Joerg Pauli, head of pre-sales at NTT Europe, says: “Everything is on a fi xedrate base from the beginning, and nothing will change during the contract period.” By using a network provider such as NTT Com, a financial services company can drastically improve its efficiency while also reducing costs, and be able to make fast transactions in a community while paying for them on a fi xed rate basis.


Business Technology · October 2014

A SPECIAL REPORT ON BUSINESS TECHNOLOGY, CREATED BY NTT COMMUNICATIONS AND NETAPP AND DISTRIBUTED WITHIN CITY AM

The global cloud

The big interview...

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OVING into the cloud can make financial service firms more efficient in the longerterm. But in order for them to make the most of cloud-based opportunities and be more flexible, agile and reduce cost it is important that companies find the right data centre and provider to implement their services. Damian Skendrovic, VP cloud services at NTT Europe, and CEO of Atlas IT, says: “Financial service companies want flexibility and do not want to stick to a long-term plan. In a traditional model certain strategies tie you in for at least three years, which in IT terms is quite a long time. “The cloud gives them the chance to move and take advantage of new developments. It also allows them to focus on the critical elements of their business rather than the mundane daily tasks that can take up too much of their time.” CIOs are under pressure to do more with less and launch new services and applications quickly. The type of data centre a company uses can determine how efficient and agile they become with the cloud. Skendrovic says: “NTT Com is building a new 30 megawatt data centre facility in Hemel Hempstead, opening around mid-2015. From a design perspective it is very flexible. It is not a one-size-fits-all approach and can support many different needs of companies.” NTT Com already boasts 130 data centres globally and is on a mission to open more around the world. It was awarded the data centre investor of the year in 2014 and the new facility at Hemel Hempstead will further echo this investment. “We have used a design that enables very high power density, but also the cooling to support that to give us a good power usage efficiency (PUE) rating,” says Skendrovic. The centre at Hemel Hempstead, named Campus, will have a PUE rating of 1.2 or less – the industry average for a data centre is 1.8. It uses solar panels to support lighting, while rainwater will be recycled for cooling and the waste heat from the data centre will be used to warm the office buildings. Campus will be able to support the different requirements and IT strategies that large financial institutions have, as well as those of smaller mid-market firms. Through the design of the data centre and its ability to give companies more flexibility, it will help organisations gain a competitive edge. Skendrovic says: “We can support these companies with a cloud readiness assessment, looking at all the applications across their business and defining what can move to the cloud easily. We can support the transformation and migration into a cloud-based environment. “Each financial services customer may look the same from the outside, but underneath the covers they are completely different in terms of IT strategy and where they are in terms of maturity. “Very large organisations are usually mature in their processes, governance and structure and have very clear views in the services they would like to use. Usually they are a little bit slower moving towards the cloud because

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Joanne Frearson talks to NTT Europe’s Damian Skendrovic about how firms will benefit if they trust the cloud they are used to owning all their equipment and applications. “They have some crown-jewel applications that they will not allow anyone to touch, which will always go into a very highly secure data centre supported by strong networks. However, saying that, there are large organisations out there that are trying to move aggressively towards the cloud because they see the benefit. “The mid-market firms are probably a little bit more entrepreneurial, more under pressure to drive improvements in P&L and more under pressure to focus on their core business. They don’t want to build large IT organisations, they are

looking to leverage whatever they can from the cloud and move more quickly in that direction.” Campus has been built with all this in mind. As Hemel Hempstead is in close proximity to London it will also give financial firms more agility when they are undertaking their day-to-day transactions. “NTT Com has made investments in specific data centres that are close to some of the key stock exchanges around the world – such as Hong Kong and Singapore,”

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says Skendrovic. “It is continuing to invest on the network side to minimise latency. The applications used in financial services generally need to be fast.” What NTT Com has also been doing in its core data centre is to build an ecosystem which helps financial service firms work more effectively with their partners. For example, if a firm has a partner for a payment gateway located in the same data centre this can improve timing, efficiency and cost. According to Skendrovic, NTT Com is keen to build these types of ecosystems at Hemel Hempstead. In the event of a disaster, NTT Com has data centres in and around London and is able to provide both disaster recovery within close proximity and also very low latency services between data centres. He says: “If data get s moved around a company will know exactly what jurisdiction its data is in. NTT Com has the cloud deployment in synch with the data centre ex pa n sion ac r oss the globe. It means financial services companies can leverage cloud and data centre services wh i le ad her i ng to c om pl i a nc e requirements, in a way that still gives them control – t he d at a i s not goi n g to suddenly appear in a different geography and become subject to a different compliance regulation. NTT Com can ensure this level of control across data centres in Frankfurt, London, Hong Kong and Singapore.” By mov ing into a n out sou rced data centre, financial service companies also do not have the burden of having to invest in the environment to make sure it is up to date with regulatory requirements. Choosing the right data centre provider is vital if financial service companies want to gain a competitive edge in their cloud services. It can mean the difference between being able to use services quickly and efficiently for your customers or not. In the financial services world agility, time and reducing costs mean everything.


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A SPECIAL REPORT ON BUSINESS TECHNOLOGY, CREATED BY NTT COMMUNICATIONS AND NETAPP AND DISTRIBUTED WITHIN CITY AM

The global cloud

Knowing where your data resides is security key WHERE your data resides will determine how it is treated, regulated and who can potentially gain access to it and view it. It is important for financial service companies to know their data is secure when it goes into a cloud environment. Any security breach to a company’s data could give an unscrupulous competitor a commercial advantage and be financially devastating to the victim. Five Chinese military hackers were recently indicted by a grand jury in the Western District of Pennsylvania for stealing trade secrets and sensitive

internal communications from American firms. Len Padilla (right), vice president of product strategy at NTT Europe, says: “The data sovereignty angle of ‘where is my data physically’ and ‘how can the service provider guarantee it is secure’ is very important. “A lot of it comes back to what the law enforcement regime is in the country where the data might be. Is a law enforcement person going to be able to walk into the data centre anytime they want and get anything, or is it a country where there are some due processes and protecting laws?

“If I decide to delete some data from the systems, can I be sure that it is really deleted? Is there a policy for destroying devices? Companies, especially in the fi nancial services sector, need that kind of certification. “Because of this, customers are going to have to be pretty concerned with what kind of guarantees service providers can give them about their data. It is not just about where the data that I am using in production is, but where the data that I have replicated for disaster

recovery is and where the back-ups are held.” The revelations by Edward Snowden of data-gathering from the National Security Agency (NSA) has made people a lot more wary about where it sits and how it is treated. In January, the German government cancelled a contract with Verizon Communications over concerns that the US telecoms firm could be giving data to US authorities. T here were

allegations of eavesdropping on Chancellor Angela Merkel’s mobile phone as well as w idespread surveillance in Germany. Different jurisdictions have different laws about how data is treated in a country. New data laws in Russia which come into force next January demand that companies doing business there set up a server inside the country to house the data. This will change the way foreign companies do business in Russia. For a company to protect its data sovereignty, having a strategy to know where it resides is best.

NTT Com’s established infrastructure enables lightning-fast trading between markets in the East and West

By Joanne Frearson

W

ESTERN fi nancial services c omp a n ie s a r e s e e i n g tremendous growth opportunities in Asia as economies boom in the region. But in order to compete in the East, these companies need to be switched on 24/7. Through technology, the West can meet the East with just a click of a button. With the right technology, a trader in a London office can make high-frequency trade with Singapore almost instantaneously. High-frequency trading uses complex algorithms. It requires many large, high-speed computers, collocated often in close proximity to major exchanges, that are capable of transmitting millions of orders per second, making every millisecond critical to the profitability of the trades and the firms. It can be a challenge for financial companies to build the network and data centre services necessary for high-frequency trading in new geographies such as Asia. Costs can multiply quickly, especially as networks get larger and services expand.

NTT is the data gateway where East meets West For organisations taking their first steps in these markets, scalable services and managed applications are key to minimising development cost and maximising speed to the market. Many fi nancial services companies are choosing to use a partner which already has the existing infrastructure built in to do this kind of trading. NTT America has been helping major commodity exchanges, investment fi rms and hedge fi rms trade across the world by letting them use its low-latency routes for trans-pacific data connections. Chicago Mercantile Exchange (CME Group) has been using NTT Com’s service to help strategically position itself in the East. The CME Group operates the Chicago Board of Trade (CBOT), the Chicago Mercantile Exchange (CME), the

New York Mercantile Exchange (NYMEX) and the Commodity Exchange (COMEX). Each centre trades with the East using the NTT Com networks. Bryan Durkin, managing director and chief operating officer of CME Group, says: “CME Group requires the highest level of network services that offer the lowest latency routes and most stringent SLAs available in order to meet the real-time demands of our customers around the world. Working with NTT Com will help us to continue to improve our service offerings by providing our customers throughout Asia dedicated connections from Tokyo to Chicago.” But Tokyo is not the only city in Asia where NTT Com can provide low-latency access. It can offer firms connections to more than 20 Asian countries as well as dozens of cities.

Contact NTT on: +44 20 7767 3777 • info@ntt.eu • eu.ntt.com

Erin Dunne, director of Research Services with Vertical Systems Group, says: “Investment firms, exchanges and commodity traders have developed some of the most sophisticated highfrequency trading systems in the world. “These businesses require the lowest latency routes and highest quality collocation facilities possible to ensure that their thousands, if not millions, of transactions per second can be executed at the desired time and strike price. With the infrastructure assets NTT Communications offers in-house, it is positioned to deliver the network services these financial firms require.” It can be expensive setting up all the networks necessary to trade between the West and the East, so it is important that Western financial firms have a partner with the infrastructure for these network connections. Asia is a booming economy, and having a gateway to the East can help them grow in these regions.

NTT Communications & NetApp  
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