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Microsoft's Capital Markets Focus: Azure and Windows 8

Microsoft Azure is gaining steam with enterprise users and it could help capital markets firms transition to cloud.

Recently much of the press Microsoft has received has focused on the new version of its Surface tablets. While that is important, and it could have implications for financial services firms in the near future, the company has been busy in other business units as well.

Specifically, the financial services group at Microsoft has been busy increasing the provider's footprint in the capital markets space, according to Karen Cone, general manager for financial services at Microsoft. "We are having real business conversations with the capital markets firms and banks," Cone says, adding that Direct Edge and the Singapore Exchange both chose Windows over Linux. "A lot of things are on the platform. People now say, 'Okay, let's talk'" about what Microsoft can do in the capital markets space. "We have enterprise ready technology and we can talk about real business solutions."

Although Microsoft has both devices (Surface) and services, much of the discussions for the financial services group has focused on enterprise-specific capabilities, such as Mircosoft's Azure cloud offering. "We want to be a devices and services company," Cone says. "We have the devices and the business intelligence." Out strategy "is fed by knowing who your customers are. Because there is so much cost pressure, we have been working on the cloud and getting people to move the cloud." Part of the focus on the cloud has been to address regulatory and security concerns for financial services customers, Cone adds.

Recently, Microsoft announced major enhancements to Azure, specifically aimed at enterprise users. For instance, firms can use the familiar Windows Server and System Center to access Azure, rather than require another interface for cloud management.

[For more on what the new release of Microsoft Azure means to financial firms, read: Microsoft's Azure Cloud Move: What It Means.]

Still, one of the largest concerns for capital markets firms involves moving client data to the cloud. "We are sorting out the issue of customer data, and most [customer data] tends to remain on premises," Cone says. For instance, many of the services and processing is done in the cloud, while the customer data remains on site at the financial company, Cone explains. "You can send the compute to the cloud and you can encrypt the data, but still keep the client data in house."

Azure Gains Steam

According to industry observers and even some of Microsoft's direct cloud competitors, Azure has gained major market share in 2013, especially with enterprise clients.

"What we have done with the Azure platform, is allow simulation and modeling to move to the cloud," says Rupesh Khendry, head of worldwide capital markets industry solutions within the financial services industry organization at Microsoft. "To do it on premises, you have to have a massive amount of servers. We have been able to provide large modeling capabilities that would normally take days or months to provision in house, in 15 minutes or less."

"In the capital markets, the focus is cost pressure and balancing it with innovation," Khendry says. "That is what we are hearing [from our clients]. We are looking to help them rationalize cost."

Windows 8 In Financial Services

With firms still focusing on cost reduction, Windows 8 has received a lukewarm reception on the enterprise level. For starters, most desktops and laptops in financial institutions do not have touch screen capabilities, rendering some of the more advanced features of Windows 8 inoperable. The OS also has a new look and feel that does require some training, much like any new OS that has dramatic changes.

However, as the usage of tablets continues to grow and, perhaps, more laptops and desktops start to ship with touch screen capabilities, Windows 8 may give Microsoft and advantage with enterprise users, according to Cone, especially since most enterprise users deploy Windows devices. "A lot of what we are trying to do is work across multiple devices and channels," Cone says. "Today there are so many different things -- mobile devices, tablets and desktops." Windows 8 can provide the same integration and user experience across channels, Cone adds.

"This is where Microsoft has an advantage," Cone says. With Microsoft, "You can link from phone to desktop to back office. We believe the Windows experience is superior." Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio

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Greg MacSweeney
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Greg MacSweeney,
User Rank: Apprentice
10/15/2013 | 12:00:01 PM
re: Microsoft's Capital Markets Focus: Azure and Windows 8
As I alluded to in the article, it seems that Azure is gaining traction. One of Microsoft's major cloud competitors told me recently that 12 months ago, Azure wasn't even on the map. For instance, they would never lose a deal to Azure and Azure was rarely brought up in meetings with clients. Today, it might be #3, behind AWS and Verizon. Being #3 is still pretty good in this space, considering how much revenue AWS likely has coming in right now.
KBurger
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KBurger,
User Rank: Author
10/15/2013 | 3:16:27 AM
re: Microsoft's Capital Markets Focus: Azure and Windows 8
I have been hearing M'soft talk about Azure for 4 or 5 years. But the question remains, how much traction have they actually gained. So, at this point in time, for capital markets firms, is partnering with Microsoft on cloud considered a risk or a conservative bet?
Greg MacSweeney
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Greg MacSweeney,
User Rank: Apprentice
10/14/2013 | 10:51:23 AM
re: Microsoft's Capital Markets Focus: Azure and Windows 8
Microsoft does seem to be a little later to the cloud party, but the field is still wide open. It seems, though, that Microsoft is really starting to gain some ground with Azure. Developers are familiar with Windows Server and Systems Center, so they don't have to implement additional cloud management technology to run a cloud. So it might help some skeptical companies test the cloud, since they will have everything in tools that they already know how to use.

Plus, other cloud vendors now seem to be paying attention to Azure, which they weren't doing a while ago. I think they may feel threatened by Azure's recent moves.
IvySchmerken
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IvySchmerken,
User Rank: Author
10/13/2013 | 1:28:05 PM
re: Microsoft's Capital Markets Focus: Azure and Windows 8
Though most capital markets firms and exchanges have adopted Linux, cases like Direct Edge and Singapore Exchange choosing Windows over Linux show that Microsoft still has strong presence in the FS enterprise. Microsoft enterprise customers can use the Azure to migrate applications to the cloud, but as you say, keep the client data inside the firm. Isn't Microsoft arriving late to the cloud party?
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