The benefits of a hybrid IT infrastructure approach

Many established financial services institutions have built up a formidable collection of on-premise technologies, from mainframes and legacy databases to large middleware platforms and even grid server farms. But the industry agrees that cloud computing and transitioning to a service-based IT model supported by cloud, are the way forward.

When cloud was introduced as a strategy around a decade ago, most IT leaders embarked on a cloud-first strategy, attracted by its scalability, processing power and service-based charging. They piloted cloud applications where it made sense from a cost, performance and security perspective.

However, there’s now a growing realization that the benefits of cloud services may not be realized for every application. Public cloud service providers have improved their security and workload management facilities. However, scale dictates the level of cost benefit that cloud services deliver, and cloud can’t give IT organizations the kind of control they get in-house.

In response, retail and commercial banks, insurance firms, traders and other financial services providers are now choosing to invest in hybrid IT infrastructure: a combination that includes on-premise, colocation facilities and public cloud services.

Fujitsu observed that, “driven by the need for faster digital transformation, hybrid IT estates have become the norm, with the most successful customers opting for a ‘right workload for the right cloud platform’ approach.” And IBM recently said that about 63 percent of organizations are using two or more separate clouds and for good reasons, considering the advantages that hybrid IT infrastructure can yield as outlined below.

Data efficiency

The first is that hybrid IT infrastructures can provide the right level of data efficiency, depending on the requirements of specific applications, users or data.

So, for example, a low latency network is essential for high-speed trading because microseconds of delay can massively lower the institution’s profitability per transaction. Therefore, running this operation on-premise is preferred.

However, a public cloud service will suit other workloads better, particularly if they have unpredictable loads that need to scale quickly and harness as much compute power in real-time as is necessary. Seasonal e-commerce billing and ordering processes are an example of this. In comparison with on-premise ‘scale up’ data center infrastructure, you would need to add physical servers, storage and networking elements and carry out capacity planning to achieve the same level of usage, which is expensive.

Security and risk

Secondly, operating data center equipment on-premise or at colocation facilities also enables you to enforce the highest levels of security and controls and ensures you meet legal and regulatory compliance requirements.

Financial services institutions also, understandably, want to mitigate risk by controlling access to internal systems and data, and hybrid IT infrastructure can help by offering a range of security options.

Customer centricity

Thirdly, customer-centricity is now an essential ingredient for the success and futureproofing of established financial service brands. This makes it paramount to have the right technology platforms and capabilities in place to give superior customer service.

Again, on-premise and colocation IT can assist in this, as these infrastructures offer high bandwidth and high-throughput networking that delivers real-time responsiveness for applications and databases.

The challenge with cloud-first infrastructure is that centralized resources are not optimized for seamless customer experiences, based on where users access the network and associated resources.  Hybrid IT, on the other hand, places applications and resources in the appropriate network environment, offering real-time user access, regulatory compliance and iron-clad data security.

The best of all worlds

Therefore, the potent combination of cloud, colocation and on-premise infrastructure provides financial service organizations with a comprehensive set of options in terms of data efficiency, security, and customer centricity – as operational cost optimization for performance and scalability.

Panduit network infrastructure solutions enable hybrid IT, helping you to realize the benefits of selective workload deployment to the right environment, optimized for cost, performance and scalability and delivering a world-class user experience.

Download our e-book to find out more about Panduit’s hybrid IT infrastructure solutions for financial services organizations.