In a previous blog, I mentioned that many financial institutions were either in the midst of cloud deployments today or discussing which applications would move first. Typically, standard commoditized processes with low service levels such as HR applications, sales tracking, etc., are the first to move to cloud deployment through software as a service (SaaS) and public cloud models (e.g. SalesForce.com). In this same blog however, I also mentioned that before core financial services applications will move to the cloud, especially public cloud, the overall support and maturity level must improve. As financial institutions move ahead, there are really two distinct trends underway. First, for large financial institutions, they are embracing private cloud concepts as they continue their data center investments. These institutions have already successfully deployed virtualized environments and they are forging ahead with metering and pay-as-you-go internal charge-backs to increase pricing transparency to their internal users. For institutions that are comfortable with IT outsourcing, there is a second approach which is to use SaaS providers that are experienced in financial services and understand the heightened risk and security profile this industry requires.

Certainly, the Amazon outages will give all current and potential users of cloud services a bit more angst around their decisions to move forward. But ultimately, we believe its growth will continue albeit with some lessons learned from the FS approach - look for proper data governance and security, maturity in your cloud providers, and robust back-up and recovery. What are your thoughts?