This may not be going out on much of a limb, but I predict that 2018 will go down as the year the cloud moved from one of several good options for deploying technology to the only obvious choice. Yep, on-premise servers are going the way of your tape backup systems. (Please tell be you’re not still using tape backups.)
The reason for this paradigm shift toward the serverless financial institution is simple: Maintaining on-prem servers sucks. It sucks big time.
If you’re a techie, think about how long it would take you to acquire, configure and deploy a new on-prem server. Days? Weeks? How valuable is your time? With the right cloud provider, you can get a new server stood up in minutes. (Disclaimer: Your results may vary, but I’ve seen it happen.) And that doesn’t even factor in the thousands of dollars you spent to buy that on-prem server, compared to a number pretty close to zero that it costs to deploy in the cloud.
Then, of course, there’s server maintenance and all those damned patches. How much time do your employees spend on that, and how much do you pay them for that effort? Probably a lot, and definitely a lot more than the nothing extra you’d pay a cloud provider to handle that minutia.
Let’s not forget that servers need to be replaced every few years, too. So then that expensive, resource-gobbling process starts all over again. Who needs it?
At first, the cloud was a little scary. If we deploy in the cloud, we won’t need as many employees, and people will lose their jobs. Or so the thinking went.
What organizations that have embraced the cloud have found, however, is that rather than cutting staff, they’re able to devote that staff to more strategic initiatives. Instead of maintaining old hardware, they’re creating new products and services. And that makes for happier employees.
The financial institutions that thrive will be the ones that can remain nimble. The cloud has the edge there, too. If something happens today, you can conceivably respond to it today, at least from a server standpoint.
The cloud has become popular for ancillary services like imaging and office productivity, but in 2018, you’re going to be hearing more and more about cloud-based core data processing platforms. Why? The cloud has been battle-tested on the small stuff and now it’s ready for the biggest technology deployment a financial institution ever makes.
Think about it. Why would you buy an in-house core system when a cloud-based system can give you the exact same capabilities without all the hardware headaches? You wouldn’t. Or at least you shouldn’t.
For that matter, why would you buy into an aging service bureau solution that limits your capabilities when your options in the cloud are unlimited? Ditto.
This time next year, when we’re in the midst of an avalanche of financial institutions switching to cloud-based cores, you can look back and think, gee, for once John really did know what he was talking about.