WHITE PAPER

BUILDING A FINANCIAL SERVICES–READY SERVER PLATFORMOnly server technologies with rare and special characteristics can position financial institutions for long- term success.

When it comes to mission-critical computing, no industry has more intense requirements than financial services.

And in that industry, no organization faces more intense IT pressures

than the New York Stock Exchange.

Just ask Cal Braunstein. Although he’s now CEO and executive director of research at analyst firm Robert Frances Group Inc., he was once responsible for supporting the NYSE’s consolidated ticker system, which these days reports trades involving well over one billion shares a day.

Needless to say, businesses listed on the exchange and investors trading on it had little tolerance for downtime, Braunstein recalls. In fact, any outage longer than two minutes had to be reported to the federal government. If the problem lasted five minutes or more, the w was legally obligated to suspend trading, and getting everyone back on the floor again afterward could take as long as half an hour. The next day, the ugly details would be all over the front page of the Wall Street Journal.

“No one wanted to experience a two-minute outage,” Braunstein says. “And we definitely did everything possible to never have a five-minute one. The objective was an always-on environment.”

That’s a goal the NYSE shares with most other financial services enterprises. Banks, securities firms and insurers process huge volumes of transactions every day, and their clients rely on them to do that work rapidly, securely and on demand. Meeting such high expectations is extraordinarily difficult but far from impossible—if you use mission-critical server technologies with a rare and special blend of qualities.

DAUNTING REQUIREMENTS

The finance industry’s extreme computing needs ultimately stem from its equally extreme business challenges. For starters, customers insist on nothing less than nonstop, 24x7 access to their account information. “They expect systems to always be there,” Braunstein observes. They also expect complete protec-tion for their data and immediate response. Brokerage houses, for example, must execute every one of the thousands of buy and sell orders they receive each day all but instantaneously. “Billions of dollars can be lost in a second or two,” Braunstein observes. Simi-larly, a bank with a sluggish Website probably won’t be anyone’s bank for very long, he notes.

Keeping pace with the financial world’s breakneck pace of innovation isn’t easy either. To keep profitability high, financial services firms are constantly rolling out new products and services, and no firm can afford to fall behind. Continually evolving regulatory requirements only add further complica-tions. “Simply complying with the new reporting mandates that have been added in recent years is putting firms under tremen-dous strain,” says Ambreesh Khanna, vice president of product management for financial services at Oracle of Redwood Shores, Calif. “This stuff just keeps piling up, and dealing with it all makes an already complex job even harder.”

For IT leaders at financial services firms, pressures such as those translate into an unusually daunting set of requirements. To meet steep client expectations, they must deliver blazing-fast perfor-mance, airtight security and uninterrupted uptime. And to keep pace with growth and new-product launches, they must also be ready to scale systems up rapidly—or scale them down just as swiftly if appropriate. “Nobody wants to do what they were doing in the 80s or 90s, which was overprovisioning data centers by 90 percent,” Khanna says. Financial institutions need hardware and software that can quickly provide more processing power and storage capacity whenever it’s needed but also shrink back down flexibly if the institution’s needs decline later.

In case all of that isn’t difficult enough, financial firms typically have tight IT budgets, so their technology decision-makers must satisfy that long list of demands as cost-effectively as possible. Those same cost constraints make minimal administrative overhead a top priority as well. “The Holy Grail of finance industry data centers is a lights-out facility that manages itself,” Khanna remarks.

TURNING CHALLENGES INTO OPPORTUNITIES

Meeting such stringent requirements takes mission-critical server technologies with exceptional strengths. For example,

only systems with robust multithreading and a generous supply of physical processors and cores can satisfy the finance industry’s intense performance and scalability needs. “You want to be able to fire up unused threads or idle compute power in your existing servers rather than install new ones every time traffic goes up,” Khanna says. Systems with flexible configuration options further accelerate throughput by empowering technicians to partition and tune separate portions of the environment for specific workloads.

To keep security strong, state-of-the-art authentication, data integrity, data privacy and single-sign-on capabilities are must-haves too, along with granular multilevel rights management functionality that gives users and applications only the minimum privileges necessary to complete authorized tasks. Integrated virtualization software and self-healing management systems that can detect and repair problems automatically are equally essential to keeping availability high and operational expenses low.

To the maximum degree possible, required functionality should be built in rather than added on. “A server platform that comes out of the box with a comprehensive set of tightly integrated components costs less to acquire,” Khanna says. It also takes less time to install, integrate and maintain. All of that makes for greater cost-effectiveness not just up front but also throughout the system’s lifespan.

Finding a server platform with all those attributes isn’t easy, but the rewards of doing so can be enormous. “With the right server infrastructure, every challenge a financial services business faces can become an opportunity instead,” Khanna notes. Rather than burdens, for example, availability and security can be selling points for courting new clients, and massive data volumes can be a source of competitive gain. Braunstein, in fact, has seen investment firms earn back the cost of deploying more-powerful

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Financial institutions need hardware and software that can quickly provide more processing power and storage capacity whenever it’s needed but also shrink back down flexibly if the institution’s needs decline later.

servers within a matter of weeks. “They were able to spot fleeting pricing advan-tages and execute the trades before the gaps disappeared,” he says.

Additionally, institutions with a truly flexible, scalable and manageable server platform have the agility to handle whatever the future holds. For example, firms with an appropriate server platform have not only the scalability and reliability to comply with intense new regulatory reporting requirements today but the flexibility to accommodate further compli-ance challenges in the years ahead. They can also spend less time and money on administration and more on introducing innovative new products.

UNPARALLELED POWER

Khanna advises institutions searching for a finance-ready server platform to begin by finding a platform vendor, such as Oracle, with deep industry expertise. “You need a partner that really knows its way around a financial services data center and incor-porates that knowledge in its products,” he observes. Oracle’s SPARC servers, for example, reflect lessons Oracle has learned across two decades on the financial industry front lines. “SPARC essentially grew up in the financial services industry, and we’ve always used meeting that industry’s extreme needs as the stan-dard we wanted to achieve,” Khanna notes.

Not surprisingly, then, Oracle’s SPARC servers are engineered from the ground up to deliver mainframe-caliber speed and availability at a fraction of the cost. They’re also hugely scalable. Oracle’s SPARC T-Series and SPARC M-Series servers are designed to run the most crit-ical applications with less risk associated with application availability, down-time and business continuity. SPARC Servers also feature some of the IT world’s most formidable security controls, such as on-chip cryptographic acceleration based on 16 industry-standard ciphers. “That enables firms to have strong security without sacrificing performance,” Khanna notes.

Oracle’s SPARC servers come with an array of no-cost software too, including

the cutting-edge Oracle Solaris operating system and built-in virtualization, management and middleware systems. Seamless integration with enterprise applications and line-of-business solu-tions further lowers software procurement and implementation costs while adding advanced functionality for a wide range of industry-specific needs. End-to-end services, meanwhile, ensure that server deployments get up and running quickly and remain continuously available.

Such advantages enable Oracle’s SPARC servers to deliver a host of impressive quantifiable benefits. In fact, companies that base data center refreshes on Oracle’s SPARC servers experi-ence payback in less than 13 months on average and collect a 267 percent return on investment over three years, according to research from analyst firm IDC. Firms included in that study also reduced server outages by 99 percent and boosted productivity by $38,013 per 100 users.1

Those are big numbers, of course, but only fitting in the context of financial services IT, where big numbers are the norm. “Computing doesn’t get any more mission-critical than it is in financial services,” Khanna observes. And only heavy-duty technologies such as Oracle’s SPARC servers can stand up to the finance indus-try’s punishing demands. “Whether you’re in banking, insurance or capital markets, you’re dealing with immense workloads on a daily basis,” Khanna says. “The importance of choosing the right server platform is every bit as immense.” nOracle’s SPARC Server Systems

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“Computing doesn’t get any more mission-critical than it is in financial services. Whether you’re in banking, insurance or capital markets, you’re dealing with immense workloads on a daily basis.”

— Ambreesh Khanna vice president of product management

for financial services at Oracle

1 Randy Perry and Susan G. Middleton, “Time for Change: Optimizing Datacenter Infrastructure with Technology Refresh,” IDC, July 2012.

In this executive Q&A, Oracle’s Khanna discusses how evolving regulatory require-ments are creating new challenges for financial institutions and how the right mission-critical server platform can help firms address those demands more efficiently and cost-effectively.

How have regulatory requirements in the financial services industry changed in recent years?They’ve become a lot more stringent and all-encompassing. Regulators now require firms to report across all of their business lines together instead of handling each unit separately. They’re also asking financial insti-tutions to track matters such as liquidity risk on a more real-time basis, so figures you might have submitted monthly before must now be calculated several times a day in some cases.

What kinds of challenges have those changes created?It’s like a perfect storm of requirements that’s a complete nightmare for CIOs, CROs and CFOs. First, to meet all the new reporting mandates, financial firms must collect data from multiple business units and place it in a central repository. That’s a tremendous data management challenge. You have to extract and transform immense quantities of information from a bunch of siloed systems up to several times a day and fit it into one big, unified data model. Then you’ve got to generate reports evaluating the poten-tial effects of various hypothetical stress scenarios, such as a 1 percent interest rate rise or a debt default by a Eurozone country. That takes a lot of compute power. And since most of this spending is nondiscretionary, there is pressure on CMOs to identify profitable customers, create strategies to up-sell and cross-sell products and develop targeted campaigns for microsegments to be able to generate new revenue for the banks. This is another data management challenge, requiring data from various operational systems to come together with nontradi-tional data sources such as social media and Weblogs.

What capabilities in a mission-critical server platform can help financial institutions comply with new regulations?For starters, you need a platform that’s elastic in terms of storage as well as processing. So you need something that can dynamically scale up or down as regulatory requirements change. You also need a platform with robust perfor-mance and outstanding reliability. If your server infrastructure can’t cope with large data volumes or if it’s anything less than continu-ously available, you’re going to have a lot of trouble meeting your reporting obligations. Finally, comprehensive management and tight security are essential as well, because you’ve got to be certain you can administer your reporting environment centrally and protect sensitive data both in transit and at rest.

What makes Oracle’s SPARC servers a great choice for regulatory compliance challenges?There’s simply no other platform in the industry with a better track record for reli-ability. Plus, all SPARC servers from Oracle are multisocket, multicore, multithreaded systems with an extremely high clock rate and extremely large memory caches, so they deliver outstanding performance even when confronting the finance industry’s immense transaction loads. The current generation of SPARC servers is extremely scalable too, in that you can quickly add more processors, cores and virtual machines as demand increases and then scale everything down just as quickly if that capacity isn’t needed anymore.

In addition, Oracle’s SPARC servers come with the Oracle Solaris operating system, which has advanced storage functionality—such as built-in deduplication and thin provi-sioning—that simplifies data management and lowers costs. The SPARC platform also boasts state-of-the-art security features and inte-grated management software that empower IT professionals to safeguard and maintain regu-latory reporting solutions through a single, unified console. We really believe that the platform offers a combination of capabilities no other mission-critical servers can match.

FOR MORE INFORMATION: please visit www.oracle.com

VIEWPOINTEXECUTIVE

Ambreesh Khanna VICE PRESIDENT, PRODUCT

MANAGEMENT, FINANCIAL

SERVICES GLOBAL BUSINESS

UNIT AT ORACLE

Tackling Compliance with the Right Server Platform