By Tom Steinert-Threlkeld
While operational and capital savings were the initial drivers behind Credit Suisse's four-year-old effort to create a virtual infrastructure, the Zurich-based financial services firm says the real payoff is increased speed and agility.
Credit Suisse in 2004 announced plans to spend $100 million on a new applications development, securities operations and data center facility in Raleigh, N.C. But the center never got built. Instead, the firm opted to find ways to manage the growth of its trading and other operations within its existing IT infrastructure.
That meant Credit Suisse had to accelerate its move into the virtual world, where physical servers, storage devices and communications channels get chopped up and the pieces managed as virtual machines. Turning all computing resources into virtual resources was the only logical path to meet a "real-world need" at Credit Suisse, according to Leslie Muller, VP of virtualization technologies at the time. The plan, he says, was to totally virtualize its global data centers by the end of 2010.
However, increased business agility has been a bigger benefit than the reduced spending on servers, workstations and networking gear, says Muller.
When Bear Stearns collapsed and Lehman Brothers declared bankruptcy last year, bulge-bracket firms like Credit Suisse had to take on defecting customers quickly. In such cases, reassigning capacity to critical uses overnight is imperative. "The window of opportunity is very small," says Muller.
In day-to-day operations, Credit Suisse's derivatives unit has cut the time needed for large runs of risk assessments from eight hours to two. Calculations used to be handled in sequence in a single thread on a given processor, but virtualization has allowed traders to set up the equivalent of three machines to run simultaneously on each core processor. Similarly, traders who used to keep three workstations under their desktops have been able to replace them with slightly more than one virtual workstation each. For temporary additional power, they can sign up for "disposable" workstations that last 30 or 60 days.
Previously, it could take months to get new servers--or even a desktop computer--in place. Now, the task has largely become reassigning computing power to new activities or individual users. Credit Suisse uses a homegrown system to track requests for new virtual machines, as well as their activation and expiration dates. When a machine's life ends or its user departs, the processing power is automatically returned to the pool.
This flexible use of power and bandwidth also makes it quicker to introduce new financial products, notes Muller.
Currently, users worldwide share storage, applications and processing power in four Credit Suisse data centers, where racks of blade servers are used to create the digital equivalent of 2,700 servers and 8,000 desktop computers. The savings over operating the same number of physical machines is more than $3 million a year, according to Muller, who estimates that the energy savings alone paid for all the equipment purchased for the project.
Credit Suisse is not going to meet its goal of total virtualization until "much further down the road," says Muller, but it will finish stages of the initiative in 2010 and 2012.
Wall Street Virtualization
Rachel Chalmers, research director in 451 Group's infrastructure management practice, gives the Credit Suisse program a 6.5 rating on a scale of 7 for the maturity of its automation and management of virtual services. The self-service portal that lets users assign themselves new computing resources is notable, says Chalmers, as is the ability to charge each line of business or project for its usage.
Other big Wall Street firms are at about the same point with their own programs, she notes. In fact, Merrill Lynch & Co. probably was ahead of the pack in virtualizing desktop computers when it was acquired by Bank of America Corp. Though that deal appears to have put the virtualization efforts on hold, says Chalmers, they may gain momentum with the arrival of Andy Brown, who championed virtualization at Merrill earlier this decade, as Bank of America's head of strategy, architecture and optimization.
The clearest thing that sets Credit Suisse apart is the progress it has made in commercializing its virtualization management software, says Chalmers. Last year, the firm spun off DynamicOps to sell the software, branded as Virtual Resource Manager.
DynamicOps does not directly compete with tools from VMware, Citrix Systems and Microsoft Corp. that help companies who are using a single brand of software and its hypervisor to create and manage a virtual infrastructure. But for organizations that use products from more than one company in different parts of their operations, Virtual Resource Manager acts as a hypervisor-agnostic system for assigning resources, as do similar automation and management tools from Embotics, Fortisphere and ManageIQ.
The Credit Suisse spinoff has attracted more than ten customers across an array of industries, says DynamicOps CEO Rich Krueger. Muller is now chief technology officer of the business, which counts Credit Suisse as a customer.
Funded by Credit Suisse's Next II venture arm, DynamicOps should have an advantage over its rivals in financial support, says Chalmers. Embotics, Fortisphere and ManageIQ were each generating less than $1 million in annual revenue at year-end 2008, she estimates. But, she adds, even if DynamicOps has signed 20 clients, the average deal size is $55,000, which amounts to less than $1 million in yearly revenue.
Customers can use the resource manager to, in effect, build a private cloud of computing power and avoid VM sprawl, where administrators lose track of vast numbers of virtual machines, which continue to tie up resources.
Alternative investment manager Man Group uses the software to manage 800 physical servers and 2,000 desktop computers around the world. The firm was able to decommission 148 servers at a maintenance savings of $135,000 a year. "Our desire is to push the virtual estate up to 80 percent" of all computing, says Neil Smith, Man's head of global platform engineering. The remaining 20 percent would use servers dedicated to specialized in-house applications.
As at Credit Suisse, Man Group has seen installation times drop from months or weeks to hours. According to Muller, users should be able to set themselves up with computing power in minutes.
This article can also be found at SecuritiesIndustry.com.
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