DevOps, Cloud

This blog is part 4 of a series of 7 on the results of our inaugural research report The State of DevOps in Financial Services.


Earlier this year Contino reached out to IT professionals in financial services to gain a greater understanding of innovation and DevOps in the industry.

We received responses from 165 professionals, ranging from engineers to CTOs working at a range of financial services organizations from FinTech startups and investment funds to insurance firms and the biggest global banks.

This culminated in our research report The State of DevOps in Financial Services.



For an introduction to our findings, check out an earlier article here. This blog series will take a closer at each chapter of the report in turn. 

Today, we tackle the issue of how the cloud is being used in financial services.

The Cloud in Financial Services

The headline: public cloud is catching up with on-premises!

Almost all organizations have dipped their toes into the cloud to some extent. Only 2% are making no use of any cloud services whatsoever.

A slight majority of workloads are on-premises (42%), followed by public cloud (33%), then  private cloud (25%). While it is to be expected that on-premises would form the majority of responses, it is encouraging to see public cloud a close second.

Given the rapid rate of public cloud adoption [1] we could see public cloud outstrip on-premises within a few years in financial services.

Public vs. Private vs. On-Premises

Is there any difference between those that use the public cloud versus those that remain on-premises?

Cross-referencing cloud usage with DevOps maturity yields noteworthy results. For those with a DevOps maturity of five, all respondents stated that they were using the public cloud in some capacity. Their workloads were fairly evenly split across public (36%), private (29%) and on-prem (35%). Interestingly, only 27% stated that provisioning infrastructure was a major barrier to deploying at speed and scale (see pp.18-19).

By contrast, for those with a reported DevOps maturity of one, only 20% of workloads are in the public cloud, 19% in a private cloud, with 61% on-premises. Simultaneously, provisioning infrastructure was cited as the biggest barrier to deploying software at speed and scale by 71%. Clearly, the public cloud is an important pillar of a mature DevOps practice, massively reducing the problem of infrastructure as a barrier to rapid software deployment.

Enterprises vs. SMEs

A crucial question is what impact the size of a company has on how it hosts its workloads. How do enterprises fare in comparison to smaller companies?

Enterprises have 44% of workloads on-premises, versus 33% in public, 23% private. Companies with under 500 employees, by contrast, have fewer workloads (34%) on-premises, more (40%) in the public cloud, and about the same (26%) in private clouds.

Predictably, larger organizations are majority on-premises and smaller organizations are majority public cloud. This is reflected also in their time-to-market, with on-prem orgs slower than those in the cloud.

What’s Are the Biggest Barriers to Migrating to the Cloud?

The biggest barrier to cloud migration is a lack of leadership and management support. Not only did it score the highest overall (56%), but was cited as the number one barrier by 47% of respondents. This suggests that many leaders are often stuck in more traditional mindsets and operating models, unwilling to branch out into new areas.

This is significant. Progress cannot be made without buy-in from the leadership team. Adoption of the cloud is correlated with high release rates and high DevOps maturity. Financial services leaders need to be more open to technological shifts if they are to successfully execute their digital innovation strategies.

Other major barriers include a lack of knowledge and skills at 56% and security with 48%. The skills issue is well-known. There are more cloud vacancies than engineers. Security also is a classic pitfall.

Organizations try to just shift their old security models to the cloud and it just doesn’t work. New world, new rules...and new operating model required!

What’s clear across all three of those major barriers is that maintaining the status quo is a recipe for obsolescence. Your leadership need to be with you, then as a forward-thinking company you will be more likely to get the skills you need, and the right operating model will ensure that you don’t just drag the problems of the past with you into the future!

Conclusion

The public cloud is gaining momentum in financial services and with good reason: it helps to eliminate the infrastructure bottlenecks that are holding organizations back.

But some organizations – larger ones in particular – are encountering barriers to migration. Foremost amongst these are mental barriers: a lack of understanding among leadership and difficulties shifting to the new perspectives of the new world of the cloud!

References

[1] According to Forrester the global cloud computing market is growing at a 22% compound annual growth rate

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  • Ben Saunders

    Client Principal

    Ben is a highly motivated, professional consultant with a proven track record of delivery across the financial services, media, retail and energy sectors. Having managed project teams of up to 30 resources, with budgets of £5m, he has forged a reputation as a driven and focused professional with exceptional leadership skills, paired with significant experience of communicating with C-Level executives, at a strategic level.

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