With remote and new hybrid working models expected to be the norm for the employees, on-premises based access to data is fast becoming a liability.
“The advent of remote work during the pandemic has significantly reduced management’s resistance in having applications in the cloud rather than in-house”, says Alexander Sokol, executive chairman of CompatibL.
“The most important change has not been technological, but psychological,” he says.
Security risks are often cited as the reason organisations have not transitioned to the cloud. The belief being because a server is local and housed at a site owned by the company, it is more secure than the cloud. However, this reliance on ‘physicality’ creates a false sense of security. According to Sokol, a security breach will likely not be from someone breaking into a data centre and physically accessing the local server but through a cyberattack.
“If you look at the most recent security hacks, almost all of them, with very few exceptions happened when an on premise or data center network was compromised through a cyberattack rather than through a breach of physical security.”
“In a modern world, you cannot operate while disconnected from the internet. No matter how good your firewall is, if you're maintaining this firewall with a small IT organisation, it is far less secure than if you were relying on AWS, Azure, IBM or any of the other major cloud providers.”
With cloud providers handling much more of the infrastructure, the IT department also needs to trust their provider.
“They have whole teams and divisions staffed by extremely competent people who work on cybersecurity,” says Sokol.
“You must trust your cloud provider on cybersecurity. They can do things that an individual organisation cannot do without a massive budget, and can be your trusted partner in securing your network from cyberattacks.”
Legacy and comfort
Another major hurdle for the adoption of the cloud is relying on niche or customised software that fulfills specific needs within the organisation but has not been transitioned to the cloud. Even for tasks that are common in the financial industry such as risk management, each organisation has their own way of doing things and this requires customised or even fully bespoke software solutions.
“In enterprise banking and asset management, there is no out of the box software. There are always unique aspects in each organisation with respect to what systems they have and how these systems are connected and used within their organisational structure,” says Sokol.
While it may be challenging to move legacy software to the cloud, there are steps businesses can take to help ease the transition as well as get the best value out of moving to the cloud.
“True cloud transition is converting your application from monolithic design to a set of distributed microservices,” says Sokol. “Many benefits of the cloud are only realised when you move to a modern microservices based architecture. You will not realise full potential of the cloud by merely moving the legacy software to a virtualised machine.”
The level of challenge in transitioning legacy software to the cloud often comes down to how well designed the legacy software is, he adds. Software that is modular rather than monolithic and is well engineered could be transitioned to the cloud within three to six months. On the other hand, transitioning software that is less well designed can take much longer.
“A monolithic application built on outdated technology may require a full rewrite before it can be deployed in the cloud. It is a challenge, and it requires a budget. But once you commit this budget and commit the time, there are major benefits in migrating.”
Finally, overcoming the sense of comfort of using a tried and tested solution is an additional hurdle that businesses need to get over. Both the IT department and end users (traders and risk managers) usually abide by the adage - don’t fix what isn’t broken. Sokol says a poorly planned transition can prove to be quite frustrating to the users and disruptive to the business.
“If transition to the cloud is done without considering the way that people work with on-premises applications, it can fail. People will discover that something that they have taken for granted is not possible in the cloud.”
He gave an example of an application being run on the desktop. Whenever an error occurred, the user would find the log files in a folder and forward them the IT department. However, when that software was moved to the cloud, the logs could no longer be included with the support request, making troubleshooting more difficult.
However, if all the correct planning is done, both the IT department and end users will ultimately adapt to the new ways of working and see the efficiencies of the cloud.
“After a few months, once people become completely comfortable and they realise that whatever they do locally can be done better in the cloud, they can’t even go back [to an on-premises system]. To them, working locally will be uncomfortable.”