Introduction
Cloud adoption journey of Banking, Financial Services and Insurance (BFSI) enterprises requires to address the existing disposition of 2000 and 5000 business applications. Many of these applications consist of legacy technology landscape. Number of factors
must be considered to remediate them before or during the cloud adoption journey.
Application Right Platform (ARP) is a strategic technology standardization process that BFSI enterprises should consider while planning for cloud adoption. This will benefit BFSI organizations in the long run.
What is ARP?
Business applications comprise an ecosystem of technologies that are loosely and/or tightly coupled. ARP is a framework of decomposing the ecosystem of technologies for a given application into multiple technology layers under consideration (source) and
matching the same with preferred standard technology stack (target). For example, an enterprise may decide to adopt only two operating systems, two relational databases, and two middleware software. Many other technologies like reporting, ETL, messaging, data
integration, scheduler, logging, tracing, monitoring, security, and DevOps tools are to be considered for an application. These considerations will multiply when we consider adoption of public cloud with PaaS solution. The ARP framework begins with an assessment
that spans the portfolio discovery with platform definition and onboarding planning.
Many other parameters must be considered in ARP process before embarking on cloud journey as described below.
Key Considerations for Cloud-led ARP
1. Private vs Public cloud vs On-premise data centers
We see a clear trend towards selecting one private cloud and multiple public cloud providers followed by application migration. There is a clear preference for hosting a large number of the applications on-premises due to perceived security questions regarding
liability, non functional requirements and integration with legacy systems. Adoption of public cloud in large BFSI enterprises is primarily seen for specific business use cases like reporting applications or high-performance computing requirements such as
risk analytics applications or archive data platform, whereas we see significant adoption of public cloud in insurance as well as small and medium sized banks.
2. IaaS vs. PaaS vs. CaaS
We see a clear trend in BFSI where IaaS platforms are selected for migrating some of the existing applications whereas turnkey PaaS platforms (Red Hat OpenShift, Pivotal Cloud Foundry, etc.) or Containers as a Service platforms such as Docker Enterprise
Edition, Mesosphere DC/OS or Kubernetes are selected for new application development.
3. Application Centric View & Application Disposition
It is essential to establish the application-to-infrastructure mapping or a ‘Full-Stack’ view of the application as ‘application’ is a logical unit of several software and hardware components. Many enterprises would not have this up-to-date mapping. Application
centric view can help in establishing the complexity of migration and hence the business case. Many large banking enterprises would have classified their applications in terms of their strategic dispositions, namely Buy, Hold and Sell. The Buy and Hold category
applications must be classified further on the basis of their ’Migration Disposition’ using 4R model.
4. Technology Standardization
BFSI enterprises are slowly realizing that when dealing with thousands of applications, going with ‘Lift & Shift’ migrations is not an effective approach in the long term. Hence their efforts on large scale technology standardization apart from OS, DB and,
MW. Technology standardization can significantly benefit to reduce administration cost, cost of license, cost of procurement of multiple tools, and cost of application maintenance and development. When we try to map the ecosystems of technologies to target
technologies, the ARP exercise brings multiple use cases for remediation.
5. Commercial off the Shelf (COTS) Products
BFSI firms use a significant number of COTS products. COTS applications must be certified to run on VM and analyzed for compatibility with the target cloud platform. The upgrade may need adjustments to business processes and/or end user training and may
have implications for the existing licensing model.
6. Additional considerations
- Shared services — Migrating and integrating the shared services like email services, FTP, SharePoint, ETL, scheduler etc. to the cloud will involve coordinating with multiple stakeholders.
- Cross-premises integration and multi-cloud strategy — Integration between cloud-hosted and on-premises applications along with latency and data security is important for public cloud adoption.
- Parity between environments — Using public cloud services to optimize Dev/Test environment is a great example of the benefits of public cloud adoption. However, existing applications still seen using unsupported technologies may not be available on the
public cloud.
- Return on investment (ROI) while moving to public cloud requires understanding of the book value of the legacy hardware, devices, etc and workload characteristics
- Data egress — public cloud would incur extra cost for data egress until critical mass of the applications moves to cloud.
Summary
To ensure successful cloud adoption, the ARP of thousands of existing traditional applications must be addressed pragmatically. ARP can benefit enterprises in reducing propriety OS, DB and MW licenses, adoption of single platform for scheduling, logging,
message queue, rationalizing skills needed to maintain the infrastructures, significant reduction in application development and maintenance cost, and makes applications fit for moving to cloud.