Banks and other financial institutions moving toward digital transformation are facing numerous challenges, and managing their bi-modal architectures is one of the most critical. Ericsson Hyperscale Datacenter System 8000 lets you set up both legacy and agile infrastructures within the same system, managed by the same platform.

The challenges

The repeal of Glass-Stiegal caused the financial crisis of 2008, some said. No, it didn't, said Bill Clinton. Whether reduced regulation contributed or not, the financial meltdown of 2008 is still fresh in our memories and our pocketbooks. The verdict is clear: banking, the profession that was once described as conservative, solid, and predictable, got out of control. Attempts are being made to bring it back under control.

As big a challenge as re-invigorated regulation, however, is technology; in particular, managing digital transformation.

"As banks face challenging new rules on capital, the cloud offers a way to upgrade infrastructure without huge capital expenditures. Operating expenses can instead go towards minimizing the impact of modernization on their balance sheets."
- Forbes

One of the most important digital transformation challenges to get right is bi-modal IT.

Managing bi-modal IT is complicated

Like those of enterprises, governments, educational institutions, and manufacturing, the IT departments of financial institutions are being pulled in two directions at once. To compete in a digital economy, they need to deliver new products faster than before, at a lower cost.

Enterprises that have made the transition to a digital economy are already functioning with exceptional asset and operational efficiency, reaching average hardware utilization rates as high as 65 percent in their datacenters.

That may be well and good for young enterprises, but, the IT departments of financial institutions cannot afford to abandon the infrastructure and operations that the support their legacy applications. Some of those products run on specialized hardware that is optimized for a particular application. Others are part of virtual environments that must satisfy the needs of multiple and varied constituencies. Changes incur risk and require extensive buy-in. Not exactly agile.

Don't forget customer satisfaction

To further complicate the IT challenge for financial institutions, customers are demanding better service. If a bank implements IT improvements at the cost of customer service, it will lose business.

"The increasing competition and globalisation will continue to open the eyes of customers to various options in the marketplace and reinforce their power of choice ... Survivors will be those who align their entire organisation with the principles of customer-orientation."
- KPMG

The opportunities

Until recently, my wife and I sponsored cadets from the US Air Force Academy at our home in Colorado. After a restful weekend, it was almost routine to wish them Good Luck as they walked out into a pre-dawn blizzard with a laundry bag hoisted over one shoulder and a backpack full of books over the other, muttering "Another day in which to excel."

Those cadets knew that challenges are opportunities in disguise. While dealing with the difficulties of managing bi-modal IT, financial institutions have the opportunity to discover ways to run their business with shorter times to market and lower cost, and perhaps even new business opportunities. Here's one way ...

Combine PODs and vPODs to manage bi-modal IT

Ericsson Hyperscale Datacenter System 8000 provides both the agility and utilization rates promised by a bi-modal architecture, but within the same system or infrastructure. A vPOD, short for virtual performance-optimized datacenter, is a software-defined capability of Ericsson Hyperscale Datacenter 8000. First you define the vPOD, then you assign networking, compute, and storage resources to it, then you use it to provision cloud applications and services as you would any physical server.

Because vPODs are simple to create and provision, they keep you agile. Because they are assembled from resources in a common pool, and can return those resources to the pool when they are no longer needed, they keep your hardware utilization rates high. And your datacenter lean.

The Ericsson hyperscale system provides a further advantage for IT departments dealing with bi-modal requirements. In addition to assembling software-defined vPODs, it allows you to assemble hardware-defined PODs. If you'd rather reserve a few compute sleds (or racks) within the hyperscale system for dedicated applications, do that. Although they are physically located within the hyperscale rack, you can keep their resources out of the common pool, and manage them as independent servers. Which means you can have the benefits of a bi-modal architecture within the same system, but without the downsides. And, as you have less of a need for hardware-defined PODs, you can allocate those resources to the common pool, where they can be used in vPODs.

We are talking about these topics this week at the Gartner Symposium/ITxpo
Intelligent_Digital_Factories.jpgin Orlando this week.  And we've just released a new e-book on "How to master the digital economy."  Check it out!

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About the photograph

I took the picture of the young spruce tree growing beside the dead tree trunk in a high meadow on the southern slope of Engineer Pass, in the San Juan mountains of Colorado in September of 2016.


Cloud Infrastructure

Rick Ramsey

I started my high tech training as an avionics technician in the US Air Force. While studying Economics at UC Berkeley, I wrote reference manuals and developer guides for two artificial intelligence languages, ART and SYNTEL. At Sun Microsystems I wrote about hardware, software, and toolkits for developers and sysadmins, and published “All About Administering NIS+.” I served as information architect before joining BigAdmin, which morphed into the Systems Community at Oracle. I left Oracle in May of 2015, and now write for Ericsson.

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