Almost two years ago, I wrote about how NYSE Technologies was launching a "community cloud" targeted at the financial trading community. At the time, it was a brave experiment, with powerful ideas behind the offering.
I was duly fascinated.
Now, two years later, they're now reaping the benefits of being the first mover in their industry: many customers, expanded services, increased investment -- success is clearly at hand.
Could the dynamics behind their success lead to similar community clouds for other industry sectors?
I think so ...
Expanding The Cloud Lexicon
We're all somewhat familiar with private clouds, public clouds and hybrid models. How does the notion of a community cloud fit in?
It's not a private cloud: community cloud services run multi-tenant on shared infrastructure using a common operational model. It's certainly not a public cloud in several important aspects.
Certain aspects *might* be described as hybrid, but that's not what's really going on here. So it certainly deserves a separate moniker as it's meaningfully different than other forms of cloud.
Welcome To The Financial Trading World
The competitive demands of financial trading leads to a very unique and specialized flavor of IT as compared to more familiar enterprise styles of IT.
Performance (specifically latency) certainly matters. People will spend an enormous amount of money just to shave a millisecond here or there.
The notion of "trust" in its broades sense is paramount: trusting availability, trusting predictable performance, trusting security, trusting compliance and regulatory requirements are being bet, and so on.
No trader would bet on a less-than-trustworthy solution of any type.
But there's more going on here. The entry-level investment to build and operate the required infrastructure is not trivial: co-located data centers, mission critical infrastructure coupled with mission-critical operational discipline -- and that's before you start looking at applications or analytic models.
Years ago, someone in the sector put it to me quite succinctly: go big or go home. High table stakes required just to get in the game.
Going deeper, everyone pretty much works off the same information sources and feeds. Sharing of raw information feeds is the norm. There's a reasonable level of commonality in many of the applications that everyone uses -- although most everyone brings along some of their own secret sauce.
The notion of a shared IT platform, built and operated to specifications, consumed as a service, with rich information feeds and application availability -- well, you can understand why NYSE Technologies has been so successful with their platform.
The NYSE Technologies Community Cloud
Formally known as the NYSE Technologies Capital Markets Community Platform, this is not your familiar cloud. I'm sure that certain cloud purists would find much to dislike here :)
First, please disabuse yourself of any notion that this is some sort of semi-public resource connected to the internet. The security and isolation mechanisms are derived from the financial industry, not the cloud industry.
On the NYSE cloud, you know exactly who your neighbors are, and what they're doing.
NYSE provides a full range of services: from IaaS (either shared or dedicated) through several PaaS-like offering and a growing set of industry-specific applications consumed through a SaaS model. Since everyone in the community has largely the same requirements, NYSE can create a precisely targeted and differentiated offer that can't be easily replicated.
The appeal should be apparent: (a) far lower entry costs to a world-class infrastructure, operations and application support environment, (b) predictable unit costs for what's consumed, (c) expedited access to rich information feeds and application sets that are highly relevant, and (d) access to a community of like-minded people who can share and collaborate as a community.
In essence, the playing field has been effectively levelled in the capital markets industry: everyone now has access to the same level of purpose-built IT capabilities. Anyone wanting to differentiate above and beyond NYSE's services had better be prepared to make a serious investment indeed.
It's no wonder they now have several hundred customers: spanning the range from smaller outfits to some very big brand names as well.
Will We See Other Community Clouds?
NYSE's success in the financial community is inarguable, but could the community cloud model work elsewhere? Yes -- I think so -- but with important caveats.
Here's the criteria that I think leads to a community cloud approach:
- the activity must be very demanding from a compute and information perspective.
- entry costs to achieve critical mass must be quite high.
- greater-than-average concerns about security, availability, governance and compliance.
- a good degree of information sharing from common sources and feeds.
- a reasonable consistency in the applications being used by the community.
- a desire to compete-yet-collaborate through interactions with other community members
So where else might we see the growth of community clouds?
Certain parts of the energy exploration industry have been using a similar model for many years -- although I'm quite sure they don't call it a "community cloud".
Different segments of the healthcare and life sciences industry are candidates: health information exchanges, or conducting clinical trials for example.
As the utility industry moves to smart grids, the potential is there as well. Large-scale retailers are also a potential candidate.
There's also another way of thinking about it -- new and compelling IT use cases that require substantial investment and span multiple segments. The newest wave of predictive analytic applications (big data if you will) certainly fits this profile. It's not hard to imagine community clouds forming around this vector.
Are there more opportunities out there? Too soon to tell -- but success has a way of inspiring others to do the same.
Want To Know More?
EMC (in collaboration with VMware and Intel) did a wonderful video piece on NYSE Euronext -- I found it both well-produced and insightful -- worth a few minutes of your time. No surprise we're quite proud to have them as a customer and as a partner.
Harking back to a familiar theme: the world is far too diverse a place for One Cloud To Rule Them All.
There will be hundreds of thousands of private clouds. There will be thousands of publicly consumable clouds as well.
The real question -- will community clouds end up being the most interesting cloud type of all?