Overheard this week, a conversation between a bank’s CIO (the Technogeek), CFO (Mr. Bean) and CEO (The Governor).
TECHNOGEEK: So times are tough and we need to manage costs. I suggest we do that by using cloud computing and software-as-a-service tools.
THE GOVERNOR: Can you talk English, technogeek?
TECHNOGEEK: Sorry, Governor. What I’m talking about is that we place all of our computing needs into the world of on-demand services.
THE GOVERNOR: And what does that mean, I’m still not getting you.
TECHNOGEEK: Well, it means …
MR. BEAN: Look, let me have a go nerdyman. Sir, it means that we will save lots of cash.
THE GOVERNOR: Sounds better. How does that work?
MR. BEAN: Well we bung all the stuff that costs lots of money in his compute operations and give it to Google or IBM or someone.
THE GOVERNOR: That’s not so good. Isn’t that dangerous?
TECHNOGEEK: No sir, because they will run that as we need it. Let me try to explain in a simple analogy. If you were opening a bank account, you wouldn’t open a high net worth premier account on day one would you?
THE GOVERNOR: Well, I would, because I’m a high net worth premier …
TECHNOGEEK: Sure, I know you would, but what I mean is that you wouldn’t open the bank account with all the bells and whistles on day one, because you don’t know what bells and whistles you need.
THE GOVERNOR: No geekyboy, we would sell them that account with all the bells and whistles as we can then charge fees for that stuff.
TECHNOGEEK: Of course sir, but in a computing sense – where we want to avoid investment and capital expenditure this year – what this cloud stuff means is that we can open a basic account on day one and then just pay-as-we-go.
THE GOVERNOR: Oh, like a mobile service.
TECHNOGEEK: Yes, that’s what I meant.
THE GOVERNOR: So why didn’t you say so. Mr. Beancounter, is this a good idea?
MR. BEAN: Yes.
THE GOVERNOR: A man of few words. What I’m asking is that I don’t like pay-as-you-go – my mobile is on a corporate monthly direct debit account – so why would we put our computing into that sort of arrangement?
MR. BEAN: Well, it means we can have unlimited compute capacity and just pay for what we need and use, rather than buying a massive great system in-house and paying for it all up front.
THE GOVERNOR: But don’t you pay more long-term?
MR. BEAN: Why do you say that?
THE GOVERNOR: Well, this sounds like some sort of rental system and my mum used to rent her telly. It was good in the 1960s, but she’s now using a 1960s TV and paying 2010s rental prices. That doesn’t make sense.
MR. BEAN: Of course not sir, but this is not the same. We pay for what we use and the partner we choose – Microsoft, Cisco or whoever – has to maintain the infrastructure to today’s standards. Equally, we’re not really renting anything, we’re just paying-as-we-go. It’s different.
THE GOVERNOR: It may be different, but if it’s not renting then it’s pay-as-you-go and that means, in my mobile service, that I don’t get a free phone every 18 months so it’s not as good a deal after all.
TECHNOGEEK: I think rentals and mobiles might be confusing things here. Let me have another go at clarifying.
MR. BEAN: Good luck.
TECHNOGEEK: Sir, today we have millions of dollars wrapped up in creaking systems that are not cut out to handle the 21st century demands of our corporate and retail customers.
THE GOVERNOR: So? That’s normal for a bank, isn’t it?
TECHNOGEEK: Yes, but it shouldn’t be, and we believe we can make a difference by doing things differently.
THE GOVERNOR: Ah, so this might grow our business.
TECHNOGEEK: Absolutely right sir. In fact, it will not only grow our business but allow us to deal with any eventuality.
THE GOVERNOR: How so?
TECHNOGEEK: Well, the idea is that – and let’s take a practical example – we could take our payments processing, for example, and place that application on a kind of bureaux service with Amazon, and they would run the computing for us.
THE GOVERNOR: Amazon? The bookseller?
TECHNOGEEK: Yes, but they do a lot more than that these days and are one of the largest providers of computer services in the world.
THE GOVERNOR: A bookseller?
TECHNOGEEK: Yes sir. Anyways, we put everything out to Amazon and they run our computing power for us. We then pay them per transaction and, depending upon our daily volumes, we then pay for what we use.
THE GOVERNOR: Like an electricity bill or something like that?
TECHNOGEEK: Spot on sir. Just like electricity, we pay for our computing power and services on a ‘as used’ basis. That way, we never have to buy a great big server farm or whatever, but can be completely adaptable to volume, scale and business demands as they ebb and flow.
THE GOVERNOR: OK, I think I’m getting it now. We have a mobile pay-as-you-go service that works like an electricity bill that we rent from a book seller.
TECHNOGEEK: Hmmm … not quite.
MR. BEAN: Look sir, I think you’re almost there. The bottom-line for me, and what convinced me, is that we never have to buy any hardware in the future. We just get that power on an as needed basis and it will save us about twenty squillions dollars a year.
THE GOVERNOR: Oohhh, that sounds good … but what happens if there’s a problem?
TECHNOGEEK: A problem with what?
THE GOVERNOR: Well, let’s say that Google or Amazon give our information away or accidentally delete it or lose a transaction.
TECHNOGEEK: Why would they do that, sir?
THE GOVERNOR: Because they’ve done it before – look what happened to my emails with Bunty in Googlemail – and I’m just not sure that a third party can be trusted with our data.
TECHNOGEEK: Oh, you’re worr
ied about privacy and security?
THE GOVERNOR: Absolutely. Aren’t you?
TECHNOGEEK: Of course I am sir, but we’ve got that covered.
THE GOVERNOR: How?
TECHNOGEEK: Well, in our contract, it makes it clear that the data we provide to the service provider must be protected.
THE GOVERNOR: And what happens if it’s not?
MR. BEAN: We get paid squillions.
THE GOVERNOR: Can you trust them though?
TECHNOGEEK and MR. BEAN together: Yes.
THE GOVERNOR: Alright, alright. Well let’s test it out with a toe in the water in some area that isn’t too sensitive, like employee payroll.
TECHNOGEEK: Can’t do that sir.
THE GOVERNOR: Why not?
TECHNOGEEK: Because, you know …
THE GOVERNOR: What?
MR. BEAN: Bonuses sir.
THE GOVERNOR: Oh shoot, yes. So what do you suggest we use this for?
TECHNOGEEK and MR. BEAN together: We have no idea, and hoped that you would come up with something sir.