A survey of over 350 Wall Street Information Technology (IT) professionals has revealed a significant increase in the level of interest in new technologies and computing models, in particular cloud computing, as firms seek to overcome budgetary restrictions and skills shortages.
While there was little change from last year in the perceived impact of all other technologies, the number of respondents predicting that cloud computing would force significant business change more than doubled (from 21% in 2008 to 46% in 2009), making it the top disruptive technology, ahead of even operational risk modeling and mobile technologies, according to the survey's results.
Cloud computing is an emerging computing model in which processing, storage, networking and applications are accessed as services over networks — public, via the Internet; or private, via intranets. The cloud model has the potential to cut the costs, complexity and headaches of technology. The research shows that interest in and awareness of cloud computing have risen dramatically and that a great opportunity therefore exists for service providers that can make cloud computing both economic and safe for Wall Street firms, according to IBM.
IT budgets were again under pressure with many firms having experienced cuts in the last year, but there was little change in the year-ahead outlook indicating that budget pressures were possibly leveling off. In 2008 31% of respondents predicted cuts in the year-ahead while 52% expected their IT budgets to remain the same or increase. Despite increased financial pressures in the last year the outlook remained much the same with 32% predicting cuts in 2010 and 50% expecting their IT budgets to remain the same or increase.
"The financial markets form what is termed a complex system which is made up of a vast number of participants, from individual traders to industry entities such as clearing houses, exchanges and central banks, each of them generating and consuming more and more data every day," commented Ian Hurst, general manager, IBM Financial Services Sector, in a press release. "Firms need to capitalize on the latest technogies such as cloud computing to better manage all this data, operational risk modeling and analytics to assess it and turn it into market insight, and then mobile technologies to place it in the hands of the decision makers, wherever they are."
"Budgetary and personnel constraints are forcing firms to think about and look to new technologies, like cloud computing, that can provide the services they need in a cost effective manner," explains Randy Snook, Sr. Managing Director & EVP, SIFMA, in a press release. "With the range of technology solutions, there are risks and rewards, and finding that balance to optimize utility while providing adequate security and functionality will be an important undertaking for firms in the years ahead.."
The survey was conducted by IBM (NYSE: IBM), in conjunction with the Securities Industry and Financial Markets Association (SIFMA), to better understand attitudes toward both recent business and IT challenges in the industry and the priorities for future IT spending, given current market conditions. Nearly 100 professionals from leading Wall Street's Universal Banks and Brokers/Dealers responded to the survey.
"With the kinds of challenges Wall Street firms face, a trend towards cloud computing might be expected. Wall Street firms cited limited IT staff/human capital, high implementation costs and business and IT disconnect as their main internal challenges," added Hurst. "Cloud computing specifically addresses each of these with compelling economics, self-service and virtualization."
Meanwhile the Universal Banks and Brokers/Dealers were united in viewing economic uncertainty as the greatest single external challenge (cited by 90%, up from 67% in 2008). There was also increasing concern about the limited scope for growth opportunities (cited by 29%, up from 18% in 2008).