Trust issues blight bank use of on-demand grids

Grid computing holds out the promise of high capacity computing at low prices, connecting up under-utilised processors to make better use of resources.

And vendors have been quick to offer an on-demand version of grid, effectively offering to rent out processing power on a per CPU basis.

In August for example, Sun launched a financial risk simulations service on a grid network made of 3,000 servers. The vendor offers capital markets firms a predictive risk service at $1 per CPU per hour. And estimates for the future of grid computing are bullish, with analysts predicting the market could be worth $12bn by 2007.

But some financial services organisations are still cautious about adopting the on-demand version of grid computing.

Graham Yellowley, CIO of Mitsubishi UFJ Securities International, said: "I think in financial services we are in control of our own destinies. We are much happier with our own equipment. Sharing something on the basis that you have it for eight hours and then we have it for eight hours is fine - until one day you have it for 10.

"If firms can't source their procurement fast enough they can temporarily use these services. [Financial firms] are also using them as a testing ground. But I don't know of anyone who has moved away from their own kit. It hasn't happened that I can see."

Steve Norton, director of Fujitsu's financial services division, said firms need to make cultural changes before they can adopt shared "on-demand" computing.

He said: "We have a problem with clients all over the world who get very excited and imagine that someone can have an awful lot of processing power they can buy when they need to use it. The problem is if you want to roll it out, it means sharing. But are people going to be able to share?"

He added: "Clearly it is the way forward but it's still some way off. The average server utilisation is less than 10 per cent. As a CIO you have to be able to do better than [that]. But we haven't got the sharing gene in our users. You've got to persuade one dealing desk to co-operate with another. Most of these opportunities flounder when they don't realise what sharing means."

Anders Maehre, senior financial services analyst at Datamonitor, agreed companies need a change in thinking to take advantage of what he calls an outsourced service.

"In financial services [firms] believe they have the best practices and are unwilling to believe a vendor may have a better solution."

But Maehre said for most financial services organisations pay-as-you-go is not a realistic option and longer term contracts are needed: "It's effectively the renaming of old-fashioned outsourcing."

"Saying that, some elements of on-demand are being sought after - I think it's the easy bits. It comes down to a need for change," he added.

The European Commission, which currently spends €130m per year on grid funding, has called for member state governments and businesses to co-operate in pushing grid forward.

Although financial services companies still appear wary of trusting alien technology, Yellowley said grid computing is being put to use in some areas more than others.

"If you have a disaster recovery case and you need a CPU boost, the best way is with utility computing," he said.

"From our perspective we want all our own equipment. But I think that vendors are looking for opportunities. They want to do the true capacity on-demand so it can run on tap. But there would have to be a cultural change [in firms] for that to happen."