Kevin McPartland, principal, Greenwich Associates
Buy-side firms need to embrace improved cloud computing solutions to get “badly needed computing power” while also helping rein in technology costs, according to consultancy Greenwich Associates.
For instance, hedge funds could cut the computing costs of portfolio analysis by 50% if they embrace an enterprise-wide, cloud computing offering, according to the new report “Cloud Computing for the Buy Side: Moving Beyond the Myths.”
The report found that the annual technology budgets of institutional investors participating in the Greenwich Associates study averaged $5.5 million. “Hedge funds were the biggest spenders, with annual budgets averaging $7.9 million,” according to the research. “But with budgets holding steady or shrinking, many firms still do not see a guarantee that the long-term benefits of switching to the cloud will outweigh the short term costs.”
The certainty of ongoing regulatory action, a move away from many tried-and-true investment strategies, and a resurgence of structured products “are driving up the demand for computing power while IT budgets have not bounced back,” according to the report. “Cloud computing could provide an effective means of accessing needed computing power at an affordable price.”
The financial service industry “needs to embrace cloud technology on a much expanded scale,” says Kevin McPartland, head of research for Greenwich Associates Market Structure and Technology Practice, in a statement.
The cloud offers potential savings amid the contraction of Wall Street IT budgets and in a market “that requires more complex calculations to be completed in ever-shortening timeframes with ever-greater accuracy,” McPartland says.
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