C-level briefing: Matthew Finnie, CTO of Interoute talks to CBR about why the perception that cloud isn’t compliant is wrong.
As businesses look for technology that will provide them with a more agile and dynamic way of working that gives them a more flexible cost base, cloud is often the first port of call.
The pitch for why cloud is good for your business is a well worn one that CIOs could probably recite as well as a trained actor.
However, as well worn as the benefits may be, the negatives have also faced a diatribe that to some extent has played a role as to why some highly regulated industries such as financial services, have been slow to adopt.
Typically the argument is that public cloud is neither regulatory compliant nor does it adequately enough protect the business against security threats.
Matthew Finnie, CTO, Interoute, told CBR: "The simplest way to look at it is that regulators don’t really care about cloud, what they mostly care about is data. They care about access to data, who has access to data and what are the controls in place for who has access to that data and what are the protections in place so that data doesn’t leak."
In defence of cloud service providers being compliant, Finnie said: "If you look at most cloud it is delivered by service providers, most service providers do it for a living, most enterprises don’t.
"So in terms of focus, in terms of compliance, in terms of controls , someone like an Interoute or like an AWS or Microsoft, it’s in our best interest to make sure we are compliant and we can demonstrate compliance to customers."
It has been a lengthy battle for public cloud providers to change the minds of businesses in heavily regulated industries but it is one that they are starting to win.
The result of this win is that more and more businesses are deciding to get out of the data centre game as the realisation hits that operating their own is not their speciality, and while existing infrastructure can to some extent provide a working environment that can deal with all workloads, it is not particularly good at doing it.
"If it is internet facing and it’s in your own data centre then that is an exceptionally expensive way of serving stuff out to the internet. It is so much cheaper to give it to someone like an Interoute, or an Amazon," said Finnie.
Finnie believes that the market is developing a kind of generic plan for getting as much of the businesses workloads out of their premises as possible because that side of the fence is more expensive.
Finnie said: "That side of the fence so to speak is going to be very expensive at a networking level, at a cost level, management level. And while you can say it’s all sunk, it may be sunk at a capital level but it’s not going to be sunk at an operating cost level, it’s not going to be sunk at an opportunity cost level either."
This is an argument of cost and flexibility to provide a platform that combines both cloud needs and enterprise workload needs.
Finnie said that he is increasingly seeing customers shutting down racks of servers in third party collocation, predicting: "2017 is a big year for getting out of data centres."
What banks are doing is one of the most interesting things for Finnie, who said that for years Interoute regarded them as mini carriers in the sense that they have massive IT departments but buy like a carrier.
Interoute, which sells to pretty much every carrier in the world, saw that banks, for control reasons, would always own everything, buy like a wholesaler, but have the service levels of a very high touch enterprise customer.
"They may buy a 10gb whereas the big hyper-scales would buy 2 terabytes and will require less service than that 10gig – it’s sort of a no brainer where you put your focus," said the CTO.
However, this has changed over the past year as a shift of attitude among banks has taken place.
Finnie said: "What we’ve seen in the last year, which has surprised us, pleasantly, is we’ve seen a shift in attitudes and I think two things have driven it. One is a recognition of needing a much more flexible environment in which they develop, so anything from data analytics to direct digital engagement with the customer base and the infrastructure they built probably lacks the level of outward facing flexibility and scale you can buy from a cloud provider."
The second reason is that possibly due to increased market competition, the banks may no longer be in the position to financially support running their own infrastructure and being so in-house focused.
Finnie said that there has been a similar shift that was seen with networks 10 years ago, people realised that building their own networks made no sense, now from a compute workload perspective it started with the public cloud and people are starting to realise that it makes no sense to build it themselves.
As banks move slowly to a different infrastructure and IT models, the likes of Interoute, AWS, Microsoft Azure and other cloud vendors will no doubt be looking at breaking into the market.
Dealing with regulations is an understandably concerning issue for all affected by them, the EU General Data Protection Regulation for example is one that will undoubtedly have a lasting impact, and will have one regardless of whether the UK decides to leave the EU or not.
On the subject of ‘Brexit’ Finnie said that it would be, "an unnecessary level of uncertainty," but that there would still be business from the EU with UK.
Finnie said: "We live in a digital infrastructure world a large part of what we do is make the physical world that much simpler and its fiddly enough as it is and if you make it go and make it more fiddly it just makes more work and for what benefit?"
Uncertainty is a huge issue for customers and with Europe already being extremely complex, ‘Brexit’ for Finnie is something of an unnecessary issue.