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Morgan Stanley Aims for the Clouds

David Reilly, CIO of Enterprise Infrastructure, heads Morgan Stanley's industry-leading cloud and virtualization initiatives. He's not afraid to rely on vendors for substantial chunks of these and other projects.

Cloud computing is nothing new to Morgan Stanley, which has been abstracting hardware from applications since before the terms "cloud computing" and "virtualization" came into vogue. The firm has used mainframe processing from a shared infrastructure at an IBM on-demand data center since 2004 and operates a nearly 20,000-node server grid.

Today cloud computing and virtualization using commercially available solutions are at the heart of Morgan Stanley's long-term IT strategies, according to David Reilly, the firm's CIO of enterprise infrastructure. The underlying technologies, he relates, finally are mature enough to support large-scale deployments with enterprise-class reliability, and over the next several years Morgan Stanley plans to pursue significant cloud services and virtualization implementations.

"These efforts will help us improve economics as we optimize the mix of fixed to variable costs and operating to capital expense, and create a better end-user experience as we shift from a 'one-size-fits-all' deployment model to a more tailored approach," Reilly says. "When a firm spends as much of its operating expenses on infrastructure as ours does, it has a responsibility to deliver a commercially viable set of products, and cloud computing is going to allow us to get on a very different price trajectory."

The Enterprise Infrastructure (EI) group is responsible for providing IT services to every employee, region and business in Morgan Stanley, including desktop computers, office applications and telephony services, as well as the infrastructure for the trading floors and the servers, storage, mainframe services in the data centers and centralized database services, and security. "EI is the one organization at the firm that delivers services used by every employee, every day," Reilly comments. "If a piece of technology or infrastructure is used by multiple businesses, it's provided by EI." (This excludes only specialized applications used by business units that are supported by IT staff within those units.)

David Reilly, Morgan Stanley
Reilly's team numbers approximately 2,800 and includes a mix of permanent employees, contract staff and partner-provided staff. "I've only been at the firm a year, but I've been struck with the level of talent the firm has -- it's the best I've ever seen," he says. "We have an extraordinary team here that has worked together for many years." The group's budget for this year will come to approximately half of an enterprise IT budget exceeding $3 billion, Reilly reports.

Partnering for Success

As it builds on its cloud computing and related IT strategies, Morgan Stanley grows ever more willing to use commercially available products and services and to work closely with hardware and software providers, according to Reilly. Of the 1,000 vendors that provide services to Morgan Stanley, he says, the firm considers about 400 to be critical partners and about 40 to be truly strategic, though Reilly declines to name any vendor specifically. "We tend to have deeper engagements with a number of these partners," he says. "We're very involved in the technical design of a lot of these products."

Such collaboration is fundamental to the firm's infrastructure strategy, Reilly insists. "We can't self-provide nor do we want to self-provide all the services that our internal clients receive," he acknowledges. "We're never going to be the best in the world at certain services; for instance, we're never going to run the best cell phone network. Where we can find a partner that can deliver the service better than we can, and where the delivery of that service does not represent a competitive differentiator to our clients, that's where we partner."

Server and desktop virtualization, the heart of an internal cloud, are top priorities for Reilly's EI group. Desktop virtualization, he explains, helps the group provide business continuity by enabling employees to function from their primary place of work, from home or from a backup site. Instead of having to manage three PCs per employee, using desktop virtualization, Reilly says, a single blade with backup that can be accessed from anywhere can deliver identical application performance and user experience.

And while some users, including traders, may get dedicated blades, other users can share blades with up to 40 or more other people, Reilly adds. Further, while in the past virtual desktops have experienced some performance degradation, "We believe those will be addressed fully this year," Reilly says, noting that virtual desktops are more cost effective and easier to scale than traditional computers.

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