Countless financial services firms have turned to the cloud to improve their IT infrastructure. That’s because many on-premise solutions have become costly, tedious, and counter to their evolving IT goals.
But “the cloud is not a silver bullet for every single business process,” as Forbes describes. Cloud solutions should be part of any modern IT stack. But a holistic cloud infrastructure approach may not be the most cost-effective; it may not deliver on financial firms’ functional, scaling, and security needs as well.
For many financial services organizations, hyperconverged infrastructure (HCI) is a worthwhile alternative to holistic cloud. “You can use hyperconverged infrastructure to simplify technology operations and deployment, build flexible, scalable infrastructure everywhere, and improve resource utilization and management,” Brent Ellis, senior analyst at Forrester describes.
Now, HCI is growing in interest among financial services companies. But not all IT decision makers understand the right use cases for HCI, nor do they have a clear picture as to the financial, performance, and user experience outcomes it can provide.
In this article, we explore the concept of hyperconverged infrastructure and its potential benefits for financial institutions, such as simplified management, improved scalability, and cost savings. We also discuss how a managed IT platform can assist financial firms in implementing and managing HCI technologies effectively.
Defining Hyperconvergence in the Context of Financial Services
In its simplest terms, HCI involves centralizing and modernizing how data centers are operated. It combines compute, storage, networking, and virtualization into one system in a single rack. Often called a “data center in a box,” it can boost the efficiency of IT operations significantly; there’s no longer a need to manage individual hardware components.
Since financial firms using hyperconverged infrastructure need only one, centralized software tool for it, they can more easily deploy, scale, and manage their infrastructure, even across multiple locations. This provides critical benefits for financial firms—those with branch offices or clients across different geographies, for example.
Critically, HCI allows financial firms to keep some of their workloads on-premise without suffering from all the limitations of an on-prem-only infrastructure. For example, on-premise may provide advantages in terms of security, load-balancing, and latency. By leveraging HCI’s hybrid capabilities, financial firms can benefit from the strengths of both on-premise and cloud to best meet their needs.
Hyperconvergence vs. Cloud? It’s Not a Competition.
Hyperconvergence is commonly framed as a direct alternative to cloud. But to reiterate, there’s no need for this kind of false dichotomy. HCI strategies employ both on-premise and cloud in tandem; in most cases, this means leveraging the benefits of one without losing out on the advantages of the other.
For example, firms may find on-premise resources ideal for smaller workloads that require low latency. Meanwhile, the cloud is often best suited for larger workloads that can become more scalable, drive cost efficiencies, and simplify access for users and IT teams. Meanwhile, financial firms can keep some workloads locally, leveraging the advantages of on-premise infrastructure where it applies.
Should circumstances change, they have more flexibility in terms of how they use those two environments. “HCI solutions present a certain nimbleness that allows organizations to adapt to changing computing needs,” as Forbes describes.
When Does HCI Make Sense for My Financial Firm?
With so many infrastructure options, it can be difficult for senior leaders to determine the right course of action for their firms. But there are specific circumstances that may make the decision simpler, strictly because some challenges are best met with an HCI approach. Here we explore specific circumstances where HCI can help.
You want some on-premise advantages but lack in-house IT resources.
HCI can be particularly beneficial for firms that need to deploy mission-critical applications but lack the resources or personnel to manage them. For example, HCI can provide a more cost-effective alternative to cloud for workloads that require higher levels of security and reliability, while cloud can simplify teams’ management of other critical functions.
“If you are a small IT shop with limited resources, you can have one person do all of it,” says Ashish Nadkarni, an analyst at IDC, a market intelligence firm about HCI. “An HCI cluster can take care of all your workloads. You can have a single console to provision the resources, and you are up and running. HCI creates agility.”
You want to manage IT environments remotely.
HCI can help firms with multiple branches or remote users manage their IT environments without the need for on-site IT personnel. A hardware failure at a single site doesn’t require the immediate attention of an on-site team, freeing financial firms from keeping staff at every site. Instead, a single team can manage HCI from a centralized location, even while maintaining effective control.
HCI simplifies software updates as well, where firms needn’t require remote teams to update their on-site devices themselves. “All software layers—[including] hardware, firmware, hypervisor, storage, and management—can be upgraded simultaneously as a single, fully-tested system to eradicate component compatibility concerns,” according to Financial Digest.
You want to save money, better.
Cloud is often celebrated for its cost-saving potential, but cloud infrastructure doesn’t necessarily save in every capacity. “Cloud hosting does not vaporize the costs but rather operates via an economy-of-scale mindset that may or may not reduce your own expenditures,” as Forbes describes.
Specifically, firms may pay providers for services for which the cloud isn’t necessary when they could simply support those capabilities themselves. Instead, financial firms can reduce their overall infrastructure total cost of ownership (TCO) by keeping some data and applications on-premise.
This applies to resources that don’t need the unique benefits of cloud, such as scalability. For financial firms, these resources may include compliance-related workloads, those that require low latency, and any application for which cloud pricing would be too costly.
You want to scale new products, services, or applications quickly.
Even so, scalability is one of the primary advantages of HCI because financial firms can quickly deploy new products or services. As we’ve shared, virtualizing some of your digital infrastructure can help financial firms scale services up or down as their circumstances evolve.
For example, an investment firm may have customers that require additional services during peak trading hours or when markets are volatile. By leveraging HCI, the firm can quickly scale up its resources to meet demand without incurring substantial additional costs. The same applies to applications, where HCI can quickly deploy an application and its associated resources, with minimal effort or cost.
You’re tired of working with so many IT solution providers.
Firms also can reduce how many vendors are involved in supporting and scaling their infrastructure. For one credit union, HCI met all their essential requirements in terms of time savings, availability, scaling, and disaster recovery. But also, it allowed the firm to work with a single vendor for all its infrastructure needs, reducing cost and complexity when managing updates and changes to their environment.
Keeping Your Firm Grounded While Staying Ahead
“To summarize, hyperconverged infrastructure enables organizations to deal with the dreaded C-word: change,” says Forbes. As technology demands grow and evolve, HCI offers financial firms a simple yet effective infrastructure that can keep up with those changes.
Option One Technologies Can Get You On Track
Determining whether HCI is right for you depends on your unique circumstances. Option One Technologies can help you determine then implement the right IT infrastructure solution for you. Contact us today to learn more.
