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A Buy Side Cloud Kit

Steve Jobs wasn't the only one to introduce a new cloud service this week. Buy-side solution provider InData unveiled a new cloud service -- iPM Cloud. We asked David Csiki, managing director of InData, how the buy side can exploit the cloud, vexing security fears and waiting for cloud computing's "big one."

InData just released iPM Cloud, a secure private cloud solution designed for portfolio managers. Why should PMs take interest?

David Csiki, InData: Number one, it's a private cloud. We are not leveraging the big retail cloud providers and they aren't a good fit for our industry. It provides a level of security over the retail public cloud model. Number 2, [access to your own data]. We have done models over the years for our clients called Software as a Service (Saas). The challenge is that client data is often co-mingled and many investment managers are not comfortable commingling their data with data from other firms. There are a couple of reasons for this. First and foremost, based on the regulatory environment, clients want complete control over their data. If it is comingled it can be difficult to get at that data or pull that data back if you wanted to move the solution in house, for example.

What are the advantages of the cloud?

Csiki: What we've done, which is based on our own internal infrastructure, we moved to a hybrid model. Instead of an SaaS model where the software is commingled, each investment manager has his or her own dedicated environment. This includes physical servers and physical security. They have the benefit of a dedicated hosted model. In the cloud mode, we are in charge of the entire hardware process and that includes the scalability. The scalability in the cloud environment is instantaneous. If a client needs to scale up their hardware environment, we can take care of that.

Implementation is one of our big challenges in the industry. Implementing an OMS or a portfolio accounting system can take anywhere from six months to a year but with a cloud model it doesn't take any time to do the software installation. It's basically whatever the schedule is for that day. So we can get a client live on the cloud immediately.

Is iPM Cloud in a pilot program right now?

Csiki: Yes, it's live currently. One of them is Old Mutual Asset Management. They're a subsidiary with Old Mutual PLC, a large South African firm.

Is cloud a hard sell these days? We are seeing TV commercials for the cloud and the debut of Amazon Cloud Drive and Apple's iCloud but you also hear about Sony and Nintendo's data security breaches. Do these stories put on the brakes for firms considering the cloud?

Csiki: It really hasn't so far. You need to explain how your solution works and how it differs from the retail cloud providers. The fact that their data isn't commingled [is important]. As for being a target for hackers, you have to explain how your solution is more secure. It's a private solution and you would have to hack into each client, which would be a bigger challenge than hacking into a retail type cloud model.

Will your solution be used primarily for storing data?

Csiki: Both for application and data storage.

What about compute intensive program? Is there access to a grid network?

Csiki: Yes. One trend we are seeing from our clients is they want to leverage the data in the database. If you look at an OMS and all the data that it's capturing, it has very powerful information you can use for other things. You can document your investment process. You can tell the story about how your process is unique. We have a number of clients who are interested in leveraging data and we allow them to have their programs -- and this is where application hosting comes into play -- up in the clouds with their software and data so they can crunch those numbers.

Do buy side firms have to inform clients that their data will be posted on the cloud?

Csiki: Yes, we get consulted all the time whenever a client gives a presentation with an institutional consultant. They ask who are your providers and we offer assistance with due diligence for our clients.

Are you bracing yourself for the first time a bank's cloud is hacked? Is this a big concern for the industry?

Csiki: Security is definitely a concern. It is the number one factor you think about when you construct your systems. When you look at the arguments out there about the cloud, it is easier to hack into an individual client, for example, as opposed to a company that offers private cloud services or any other big cloud provider. The money managers' business isn't security. It's easier to hack into their servers that have them in-house than to hack into one in a hosted provider.

What will the cloud look like next year?

Csiki: We'll see more companies leveraging private cloud solutions. There is also talk of building better security into the hardware itself. I think that while cloud computing has been here for years, this is just the latest iteration of it. It's a fact of life in the computing world.

Phil Albinus is the former editor-in-chief of Advanced Trading. He has nearly two decades of journalism experience and has been covering financial technology and regulation for nine years. Before joining Advanced Trading, he served as editor of Waters, a monthly trade journal ... View Full Bio

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