Buy-side firms prefer cloud services for business purposes first and then for financial apps.
Mary Beth Hamilton,
director of marketing,
Eze Castle Integration
The buy side may be giving in to the savings of cloud computing, but only 50% of those surveyed recently by IDG Research Services say they use the cloud for financial applications. Nearly two-thirds of the hedge funds, fund-of-funds, private equity and investment management firms questioned are using the cloud for basic business and office functions.
Only one-third, or 34%, of those surveyed say they want their first cloud project to be the hosting of financial applications. More than half, 57%, say they want to try the cloud for business and office functions such as email, file services and mobility before other uses. Survey results indicate that after the initial foray, firms move on to application hosting.
Security, governance and compliance issues, frequently cited in other surveys, remain the major barriers to the acceptance of the cloud among survey respondents.
A “lesser barrier” is the hesitance among investors and clients to the cloud, says Mary Beth Hamilton, director of marketing for by Eze Castle Integration (ECI), which sponsored the survey. “That can be overcome with knowledge,” Hamilton says. Buy-side firms are also concerned about outgrowing the cloud—59% say it’s significant—and vendor lock-in—54% view it as an important consideration.
Still, the cloud appears to be gaining ground as nearly eight of 10 hedge funds and investment firms surveyed say they use or plan to use the cloud for IT infrastructure and/or application services.
The IT infrastructure cost-cutting that moving to the cloud accrues is the top factor for acceptance among 86% of the 125 senior-level personnel questioned for “Cloud Adoption Trends in the Investment Management Industry,” says Hamilton.
Another major factor, cited by 83% of participants, is the speed of IT deployment that the cloud facilitates. Other factors swaying buy-side firms include the simplification of IT management and support, and the flexibility of accessing IT resources—both noted by 82% of those surveyed.
The business continuity planning and disaster recovery capabilities of cloud computing also got the nod from 80% of survey participants.
As for the cloud models of choice, the survey found that private clouds have the support of 71 percent of those using cloud services. Hybrid arrangements of public and private cloud services are used by 37% of respondents while one-third uses public cloud offerings.
Of those who took part in the online survey, 45% worked at firms with more than $750 million in assets under management (AUM); 23 percent had AUM levels ranging from $250 million to $749 million; and 32 percent had AUM levels of less than $250 million.
IDG Research Services conducted the survey from March 29 to May 3 of this year.
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