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The skinny on smart IT
May 01, 2005
When you spend less, you get less. That's not a bad rule of thumb, but it doesn't apply very well to business computing anymore. The commoditization of hardware and software, together with advances in networking, is providing smart companies with opportunities to pursue new methods of computing that are at once cheaper and more effective than traditional ways. Just look at the recent experiences of two big financial institutions, Scotiabank and Wachovia.
At a conference last week, Scotiabank vice president J.P. Savage told a compelling story - written up in ITWorld Canada - of how the bank is switching from traditional PCs to stripped-down "thin clients" at its 1,000 branches. Keeping all the branches' personal computers up to date and running smoothly had become an expensive headache for management and a big annoyance to the bank's 20,000 service reps. The problem "had everything to do with poorly performing IT as a result of aging desktop technology ... Failure rates were high and performance was low." Savage, moreover, was "troubled" by "the spectre of having to endure yet another major desktop lifecycle refresh that would ultimately put the company in the same position down the road." So instead the bank decided to consolidate the branches' data-processing and storage requirements in 120 central application servers and let the reps tap into those servers over a network using easy-to-maintain thin-client terminals. Because the branches' software is run centrally, it's always consistent and up to date. Not only has the bank slashed its PC upgrade and maintenance costs, said Savage, but it's also boosted the productivity of its reps.
Wachovia had a different challenge. The firm needs a lot of raw computing power to analyze some of the more complex securities it trades. Instead of spending millions to install big new servers to crunch the numbers, it decided to tap into the computing power lying dormant in the hundreds of personal computers used by its traders. Using software to tie together those desktops into a single "grid," it assembled, in effect, a supercomputer to run its analytical software. By using existing machines to create a "virtual" application server, it sidestepped big new investments in hardware. But that wasn't the largest benefit. The grid is so potent that it has sped up the analyses dramatically. What used to take eight hours takes just 15 minutes, according to IT director Joe Belciglio - and that has meant smarter trades and bigger revenues. Recently, Wachovia has begun using the grid to run more traditional tranaction software, according to CNET.
What's fascinating is that the two banks took seemingly opposite approaches: Scotiabank deployed servers to do what desktops used to do, while Wachovia used desktops to do what servers had been doing. Both, though, capitalized on the same trend: the growing ability to consolidate previously fragmented IT assets and manage them centrally - in a way that delivers a lot more for a lot less. Shifting to grid computing or thin clients won't be the right move for every firm, but all organizations should be able to find ways to profit from the underlying changes in information technology.
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