Recently the US Department of the Treasury published a paper titled “The Financial Services Sector’s Adoption of Cloud Services.” The paper raised some potential concerns with Banks embracing the Cloud. It raises some valid points, but mostly it re-affirms what users of Oracle Exadata Cloud@Customer already know: Cloud@Customer is a better model than pure cloud for addressing the Cloud requirements of Financial Services companies. If you look at the six key issues raised in the paper, most are mitigated by the Cloud@Customer model. The proof is the major global customers including both large and small banks who have adopted Exadata Cloud@Customer to leverage the benefits of cloud while addressing the regulatory requirements associated with their business.
Let’s take a closer look the issues raised in the paper:
1. Insufficient transparency to support due diligence and monitoring by financial institutions.
Oracle has worked closely with its financial service partners and provided detailed information about the architecture and operations of the system. In addition, we have put a strong focus on improving the notifications to customers regarding various incidents that may affect the health of their system. Cloud users can subscribe to various incident events and receive automated notifications when incidents occur. Customers can optionally share those notifications with Oracle Cloud Operations, to speed resolution of issues when detected by the cloud incident monitoring. Customers who have enabled Operator Access Control, a feature developed specifically to meet requirements provided by Oracle’s leading financial services customers, can also in near real time monitor the commands and keystrokes of Oracle operators accessing the Cloud@Customer infrastructure and terminate operator access if they detect abnormal activity.
2. Gaps in human capital and tools to securely deploy cloud services.
Oracle Database in the Cloud is the same as Oracle Database on-premises. Many Oracle users already have the talent and tools to work with Oracle databases. Not all tools and skills are applicable in the cloud, as we have provided additional cloud specific automation and monitoring to simplify end-user operations and reduce their dependency on staff with specific skills or knowledge. Unlike database services that are locked to a specific cloud, Oracle users can easily migrate Oracle databases to and from the cloud with near zero downtime. It is unnecessary to keep things on-premises forgoing the benefits of cloud out of concern there will be a skills gap.
3. Exposure to potential operational incidents, including those originating at a Cloud Service Provider (CSP).
Although Exadata Cloud@Customer is designed to run connected, disconnecting Cloud@Customer from the Oracle Cloud will not affect the databases and applications using the system. If the Oracle Cloud suffers an outage, databases running in customer data centers on Exadata Cloud@Customer will continue to be fully accessible.
4. Potential impact of market concentration in cloud service offerings on the financial sector’s resilience.
This is a valid concern but illustrates why many influential cloud users are resisting putting all their applications in a single cloud, under the control of a single hyperscale cloud provider. Oracle’s approach to cloud is to give users choice, by partnering with other CSPs and to provide features and capabilities to make multicloud solutions that span multiple CSPs easy to implement and operate. The most common example of this is Oracle Database for Microsoft Azure, but Exadata Cloud@Customer can play a similar role. Some of the largest banks are using Cloud@Customer to co-locate their critical database services in facilities where they can be easily accessed by applications running in other 3rd party clouds.
5. Dynamics in contract negotiations given market concentration.
Another good point, which is why we believe the market will embrace multicloud solutions, eventually forcing CSPs who have built walled gardens to better support interoperability with the other CSPs. This open interoperable approach will serve to blunt vendor power and level the playing field for all customers. Oracle strives to compete by best meeting customer requirements. As we’ve developed new and innovative features to meet the requirements of our larger customers, we’ve incorporated them into our services making them available to all.
6. International landscape and regulatory fragmentation.
Oracle’s strategy is different from other CSPs. We are providing our customers multiple ways to operate their cloud in the location of their choice. We start with many regions, located all over the globe. Unlike some CSPs, we never move customer data out of the region where it resides unless directed by the database owner. We offer Dedicated Regions for those who wish to implement a full cloud solution in a location of their choice, be it in a country with no OCI presence, or even inside their data center.
We are working to roll out Sovereign Clouds in the EU, where we will restrict operations and customer support responsibilities to EU residents. This will help address any EU requirements for data locality and operational control. For a solution at even a smaller scale, we offer Exadata Cloud@Customer, where users can deploy as little as a single system but keep their data under their physical control. We also offer Operator Access Control for Exadata Cloud@Customer, to limit and control Cloud Operations access to a local Cloud@Customer Infrastructure, extending the user’s control to allow them to meet various local country regulations.
Major banks have already identified the issues in the US Department of the Treasury report and potential pitfalls with the cloud and have worked with vendors like Oracle to develop alternative cloud deployment models like Exadata Cloud@Customer that address these issues. This report reaffirms Oracle’s strategy in the market with multiple public cloud regions, Dedicated Regions, Sovereign Clouds, Exadata Cloud@Customer and Operator Access Control. While the US Treasury report raises valid concerns, smart adoption of cloud is key to safely leveraging the cloud while meeting regulatory requirements.
Bob Thome has over 30 years of experience working in the Information Technology industry. With experience in both hardware and software companies, he has managed databases, clusters, systems and support services. Additionally, Bob Thome's experience spans 20 years at Oracle, where he has been responsible for high availability, information integration, clustering and storage management technologies for the database. For the past several years, Bob has directed product management for Oracle Database cloud technologies, including Oracle Exadata Database Service, Oracle Exadata Cloud@Customer, and Oracle Base Database Service.