Cloud Computing Proving To Be Major Resource For Hedge Funds

Cloud Computing Proving to be Major Resource for Hedge Funds

As we near the end of Q1 2013, hedge fund managers continue to generate higher returns. Following several years of sub-par performances from global hedge funds, investment managers have turned to cloud computing and infrastructure-as-a-service providers to not only cut costs, but also boost productivity. Many of the concerns that managers once had about migrating to cloud-based IT solutions, such as security, privacy and application performance, have been alleviated, and the benefits, such as cost predictability, business continuity and scalability, are tangible.

Cost Predictability

As small- to medium-sized hedge funds look to do more with less in the face of today’s regulatory and investor pressures, they need to be able to anticipate and account for their expenses. These firms don’t typically have the budget to absorb surprises related to building and maintaining on-site data centers, which can bring major distraction, a budgeting nightmare and significant risk. A cloud services model offers an out-of-the-box functional infrastructure, deployment in days and drastically reduced start-up risk. Cloud providers own all the equipment and are already used by other funds, so the manager doesn’t need to write the big check up front or worry about any potential missed details.

Unpredictable expenses don’t stop once the data center is built. Equipment can break or simply need to be replaced, and firms face mandatory system upgrades, data corruption and hard drive failure, among other challenges. Adding or removing capacity can also result in hard-to-predict costs, and staff levels must be adjusted at certain thresholds — preferably before workloads reach critical levels. Cloud service providers hedge this risk in exchange for a predictable monthly subscription fee, where even the added or lowered costs of scaling the needed capacity is predictable, since the cost and required lead time for making that change are known ahead of time.

Business Continuity

Hedge funds are held to high standards when it comes to their business continuity plans. A technology failure can be disastrous for money managers, yet more firms than ever are entrusting cloud service providers to “disaster proof” their business. This is because dedicated cloud service providers benefit from economies of scale and can offer a product that is constantly validated by others using the same service. Relocating and replicating IT resources to off-site locations also protects businesses from disasters in primary offices. Funds can tailor solutions to their specific business needs, or outsource “a-la-carte,” moving all their IT resources off site, or outsourcing only key components.

Key man risk is also common in hedge funds with only one or two IT people that are qualified to trouble-shoot technology issues. If those individuals are unavailable at a time of emergency, the result can be disastrous for the business. Consultants can help in an emergency, but they still require time and money to gain familiarity with the IT environment. Having just a few key IT individuals also poses the risk of their own limited capacity; it’s not feasible for one person to monitor the health of an on-site data center 24/7 with very short response times. Conversely, cloud service providers employ teams of dedicated staff that monitor the network 24/7.

Scalability

Cloud providers offer the unique ability to quickly and cost-effectively meet changing business needs. Hedge funds no longer need to worry about how to expand their IT capacity, technical staff levels or server space, or fund new hardware and software resources to grow or enter new markets. Instead, managers can embrace an outsourced model that lets them focus on their core business rather than invest time and effort into solving IT problems. “Scaling down” can be as simple as a phone call, meaning fund managers no longer need to focus on staff layoffs, reselling hardware, or low data center use.

By using these services, hedge funds no longer have to spend the time and money required to build an in-house platform. Cloud service providers can offer an established infrastructure to get managers up and running within days instead of weeks or months. While some managers still perceive cloud computing as an emerging trend in the financial space, it has undoubtedly become an integral part of many hedge funds’ business strategies. It has become evident that IT outsourcing services run day-to-day operations more efficiently and offer managers the chance to scale more effectively, enabling firms to turn over the hassle of managing IT to a trusted partner and focus instead on their core business.

By Chris Grandi, CEO, Abacus Group

About CloudTweaks

Established in 2009, CloudTweaks is recognized as one of the leading authorities in connected technology information and services.

We embrace and instill thought leadership insights, relevant and timely news related stories, unbiased benchmark reporting as well as offer green/cleantech learning and consultive services around the world.

Our vision is to create awareness and to help find innovative ways to connect our planet in a positive eco-friendly manner.

In the meantime, you may connect with CloudTweaks by following and sharing our resources.

View All Articles

Sorry, comments are closed for this post.

Comic
Fintech Systems, Advancements and Investments

Fintech Systems, Advancements and Investments

Fintech Growth According to a recent report, global investment in fintech companies including both venture-backed and non-venture-backed businesses reached $9.4 billion in the second quarter of 2016; investment in venture capital-backed fintech startups, however, fell by 49%. Nevertheless, the Pulse of Fintech, published jointly by KPMG International and CB Insights, suggests venture capital investment in…

How Identity Governance Can Secure The Cloud Enterprise

How Identity Governance Can Secure The Cloud Enterprise

Securing The Cloud Enterprise Cloud adoption is accelerating for most enterprises, and cloud computing is becoming an integral part of enterprise IT and security infrastructure. Based on current adoption trends, it’s clear that the vast majority of new applications purchased by organizations will be SaaS applications. The allure is evident, from cost savings to speed…

Significant Emerging Technologies To Lookout For In 2017

Significant Emerging Technologies To Lookout For In 2017

Emerging Technologies The entire world is being transformed right before our eyes. Emerging technologies are developing at break-neck speeds, and the global community needs to be prepared for what lies in the horizon. As with anything new or evolving there is benefit versus risk to consider. Most of the up-and-coming technologies that will soon affect…

In The Fast Lane: Connected Car Hacking A Big Risk

In The Fast Lane: Connected Car Hacking A Big Risk

Connected Car Hacking Researchers and cybersecurity experts working hard to keep hackers out of the driver’s seat. Modern transportation has come a million miles, and most all of today’s vehicles are controlled entirely by digital technology. Millions of drivers are not aware that of the many devices in their digital arsenal, the most complex of…

Having Your Cybersecurity And Eating It Too

Having Your Cybersecurity And Eating It Too

The Catch 22 The very same year Marc Andreessen famously said that software was eating the world, the Chief Information Officer of the United States was announcing a major Cloud First goal. That was 2011. Five years later, as both the private and public sectors continue to adopt cloud-based software services, we’re interested in this…

Adopting A Cohesive GRC Mindset For Cloud Security

Adopting A Cohesive GRC Mindset For Cloud Security

Cloud Security Mindset Businesses are becoming wise to the compelling benefits of cloud computing. When adopting cloud, they need a high level of confidence in how it will be risk-managed and controlled, to preserve the security of their information and integrity of their operations. Cloud implementation is sometimes built up over time in a business,…

Cloud Services Providers – Learning To Keep The Lights On

The True Meaning of Availability What is real availability? In our line of work, cloud service providers approach availability from the inside out. And in many cases, some never make it past their own front door given how challenging it is to keep the lights on at home let alone factors that are out of…

5% Of Companies Have Embraced The Digital Innovation Fostered By Cloud Computing

5% Of Companies Have Embraced The Digital Innovation Fostered By Cloud Computing

Embracing The Cloud We love the stories of big complacent industry leaders having their positions sledge hammered by nimble cloud-based competitors. Saleforce.com chews up Oracle’s CRM business. Airbnb has a bigger market cap than Marriott. Amazon crushes Walmart (and pretty much every other retailer). We say: “How could they have not seen this coming?” But, more…

Virtual Immersion And The Extension/Expansion Of Virtual Reality

Virtual Immersion And The Extension/Expansion Of Virtual Reality

Virtual Immersion And Virtual Reality This is a term I created (Virtual Immersion). Ah…the sweet smell of Virtual Immersion Success! Virtual Immersion© (VI) an extension/expansion of Virtual Reality to include the senses beyond visual and auditory. Years ago there was a television commercial for a bathing product called Calgon. The tagline of the commercial was Calgon…

Achieving Network Security In The IoT

Achieving Network Security In The IoT

Security In The IoT The network security market is experiencing a pressing and transformative change, especially around access control and orchestration. Although it has been mature for decades, the network security market had to transform rapidly with the advent of the BYOD trend and emergence of the cloud, which swept enterprises a few years ago.…

Report: Enterprise Cloud Computing Moves Into Mature Growth Phase

Report: Enterprise Cloud Computing Moves Into Mature Growth Phase

Verizon Cloud Report Enterprises using the cloud, even for mission-critical projects, is no longer new or unusual. It’s now firmly established as a reliable workhorse for an organization and one that can deliver great value and drive transformation. That’s according to a new report from Verizon entitled “State of the Market: Enterprise Cloud 2016.” which…

Utilizing Digital Marketing Techniques Via The Cloud

Utilizing Digital Marketing Techniques Via The Cloud

Digital Marketing Trends In the past, trends in the exceptionally fast-paced digital marketing arena have been quickly adopted or abandoned, keeping marketers and consumers on their toes. 2016 promises a similarly expeditious temperament, with a few new digital marketing offerings taking center stage. According to Gartner’s recent research into Digital Marketing Hubs, brands plan to…

The Big Data Movement Gets Bigger

The Big Data Movement Gets Bigger

The Big Data Movement In recent years, Big Data and Cloud relations have been growing steadily. And while there have been many questions raised around how best to use the information being gathered, there is no question that there is a real future between the two. The growing importance of Big Data Scientists and the…

Big Data and Financial Services – Security Threat or Massive Opportunity?

Big Data and Financial Services – Security Threat or Massive Opportunity?

Big Data and Financial Services Cloud Banking Insights Series focuses on big data in the financial services industry and whether it is a security threat or actually a massive opportunity. How does big data fit into an overall cloud strategy? Most FI’s have a positive mind-set towards cloud IT consumption as it not only enables…

Will Your Internet of Things Device Testify Against You?

Will Your Internet of Things Device Testify Against You?

Will Your Internet of Things Device Testify Imagine this:  Your wearable device is subpoenaed to testify against you.  You were driving when you were over the legal alcohol limit and data from a smart Breathalyzer device is used against you. Some might argue that such a use case could potentially safeguard society. However, it poses…

Digital Marketing Driven by Cloud, Big Data and IoT

Digital Marketing Driven by Cloud, Big Data and IoT

Digital Marketing Successful digital marketing campaigns are being driven largely by trending technologies, specifically the Internet of Things (IoT), Big Data, and The Cloud. These may be used for a huge number of marketing applications, from optimizing the performance of sports teams to improving science and research, even helping to aid law enforcement. Amazon Web…