Cloud Migration FAQs with Girish Khilnani

In a software end-of-life (EOL) scenario, how should firms decide whether to perform a software upgrade or a cloud migration?  

Barber: Every application is different—and some applications are simply not cloud-friendly—so it’s imperative to know what the application is doing and whether migration to the cloud makes sense. 

Cost is also a factor. Cloud computing has a slightly more elastic pricing model, so anyone considering cloud migration has to take that into account. 

Khilnani: I’d agree that the pre-assessment process is critical. When we do a discovery with a client facing an EOL situation, we look at their entire environment and consider their overall requirements, compatibility issues, advantages vs risks, and cost. 

The most essential thing is to make an informed decision: one where you’ve considered all of these factors before upgrading or migrating. 
 

What are the advantages and disadvantages of public cloud vs private cloud?  

Khilnani: The main difference between public and private cloud comes down to the level of control you want to have over your environment. 

Private cloud gives you complete control over maintenance, changes, your ability to implement unusual configurations, and so forth. In public cloud, that’s all handled by Microsoft, Google, Amazon, or whoever is running your servers. 

But by the same token, public cloud offers some tremendous advantages: scalability, flexibility, zero up-front capital expenditure, and the sort of cost savings you can only get from a consumption-based pricing model. 

Barber: The other major benefits of public cloud are resilience and security. 

In a public cloud model, you’ll be working with a vendor that’s operating at the scale of a company like Microsoft. A private cloud provider might have one or two data centers. Microsoft has over 200. So, there are some clear resilience benefits there. 

In terms of security, when you’re using a public cloud service, you get automatic security patching and automatic updates. This is another massive benefit given today’s cybersecurity landscape. 
 

Are there any special considerations about cloud migration for financial services businesses like hedge funds, asset managers, and private equity firms?  

Barber: The technology environment in financial services is unusually complex. Financial services businesses—and their technology partners—underestimate that at their peril. 

To begin with, you have lots of specialized and highly customized applications: risk management tools, calculation engines, market data systems, and the like. There are industry-specific data protocols, like FIX, that outside IT consultants simply won’t have much experience with. Finally, many companies in this space just don’t match the profile of what you’d usually find in an average corporate IT environment. For instance, you might have a 20-person fund with tens of billions of dollars in assets under management. 

The upshot is that cloud migration for financial businesses has to be handled very, very delicately. To be frank, a lot can go wrong even if you do everything your public cloud provider has told you to do. Big tech companies write their specifications and migration guidelines with a standard IT environment in mind, which of course makes sense considering who the bulk of their users are. But the IT environment is often anything but standard at, say, a hedge fund. So, while the cloud provider’s official guidance will work perfectly well for 99% of their users, it’s not uncommon to see “unexpected outcomes” in a more complex environment. That’s why extensive pre-migration planning and testing are critical for the kinds of clients we serve. 

Khilnani: I agree that extensive planning and testing are crucial, given the complexity of the IT environments involved. It’s also essential to communicate clearly with users before, during, and after migration. 

At Linedata, we are always careful to educate end users about upcoming changes and about how their new applications or services are to be used. We follow up to the go-live and beyond.  

This is an industry where operational leverage is often the difference between success and failure—and accordingly, there is a very low tolerance for downtime. By communicating with and educating users, you prevent problems before they happen.
 

Does public cloud help with compliance issues? 

Khilnani: Public cloud has an impact on compliance in a couple of ways. 

For one thing, it makes compliance reporting far easier. There are reporting tools built into the large platforms. It’s easy for a compliance officer to go online, identify what is in the environment, and get a detailed audit trail or report for every application. 

Beyond that, the policies, practices, and capabilities of public cloud services are very well documented. That makes it much easier to verify that you are in compliance with specific regulatory standards like GDPR or PIPEDA. There’s just no ambiguity. You can go to the Microsoft website, or the AWS website, or whatever, and get all the necessary information. But if your assets are in a private cloud environment, you’ll be asked to show far more detail—if not a full SOC 2 report or something similar. 

Barber: Another consideration is that all of the big vendors are now focusing more on their public cloud platforms than their on-premises offerings. In terms of both security and compliance, the situation for those who have moved to the public cloud is now very good—and it will only get better. 
 

What is the future of public cloud in the financial services industry?  

Barber: I’d consider private cloud to be legacy and public cloud to be the future. At some point, nearly all firms in this industry are going to end up moving to the public cloud. 

Khilnani: The question financial firms need to be asking themselves is not if they should migrate to the public cloud, but when, and how. They have to decide which cloud service provider’s platform will best suit their immediate and long-term needs. 

It’s essential to take the right decision, at the right time, so as not to be left behind. These are, of course, big questions! But that’s why we’re here: to help our clients find the answers they need—so they can succeed today and in the future. 

About the author, Girish Khilnani 

Girish Khilnani co-heads Linedata’s Technology Services business, which includes Public and Private Cloud, Cybersecurity, and Managed Services. He’s spent nearly two decades managing IT infrastructure, cloud, and global service delivery teams to provide leading-edge solutions for financial institutions. Girish is passionate about enabling operational excellence that supports the specific requirements of hedge funds, private equity, and asset managers. 

About the author, Joshua Barber

Joshua Barber co-heads Linedata’s Technology Services business, which includes Public and Private Cloud, Cybersecurity, and Managed Services. He’s spent nearly two decades building and managing IT Service Organization delivery teams, while basing himself in North America, Europe, and Asia. Josh is passionate about delivering excellence and enables IT teams to grow and scale to the rapid and specific requirements of hedge funds, private equity, and asset managers.