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Thought Leaders In Cloud Computing: Dan Raju, CIO Of TradeKing (Part 4)

Posted on Sunday, Aug 28th 2011

Sramana Mitra: All right, so, let’s move to your second point.

Dan Raju: Our second point of value is very simple, as it is for everyone else, and that point is infrastructure as a service. Infrastructure as a service has been great for us as a company that was very small and has grown tremendously big in the past five years.

It has helped us to make a wide, upfront capital investment, and at the same time it has given us access to an entire set of tools, capabilities, and enterprise-level structures that we would have to have to invest a lot of money trying to get it. So, this ability to have access to a bunch of technology was another key driver for us. And the next most important driver from a cloud perspective was that in terms of going to market for a company that is growing so fast, whoever wins this game is the person who has the best quick-to-market strategy. We have found that by adopting purely on the infrastructure side, obviously on the platform and the software services, our ability to take a platform from concept to design to development and provision and the entire software development and life cycle that you would normally think about – we found it almost to be 50% or more than 60% in some cases more effective than the entire cycle of what I call purchase of estimate, purchase, manage, and deploy. If you compare that with the same product life cycle using the cloud, we found that it helped us greatly with what I call a quick-to-market strategy.

The fourth thing I found to be helpful to us was the culture at the company. We were better able to create a culture of innovation because behind the act between when a concept is created and when a concept can be worked on, if there is a huge procurement aspect sitting right between them, most of the innovation, the response, and the ability for people to actually touch and feel what they have thought as part of the most innovative idea dies out as it gets lost in the procurement stage. The cloud has been a great facilitator of innovation.

Most important, I think, for us has been that we fundamentally believed in the cloud concept. Some of it was driven by that, so we were able to take a look at solution architectures that were a combination of private and public clouds, and we are able to offer solutions that are much more flexible than what we had in a pure in data center, in-house  product life cycle. The fifth and last one is that we were able to create much more of what I call a scale of flexible solutions architecture. I am sure that if you press me hard, I will come up with a few more, but those were  at the top of my head. These were the best benefits we were trying to leverage through our trial with the cloud.

SM: OK. Fair enough. This is a space that we haven’t really published a lot on before, so you are bringing in a very interesting perspective. I heard you say as you were describing the various ways of having levels of cloud that you used third-party trading tools. You talked about provisioning them and then bringing them to your customer base. What would be interesting I think for our readers to learn about this space is if you could give us an overview of what kinds of trading tools are used in the brokerage business. Who provides what kind of tools, and what does the landscape look like? Because this is potentially an area of innovation, it is an area you know well, and you could tell entrepreneurs interested in looking at the space where they could work.

DR: It is a great question. And since the context of this interview is to provide insights of where value is for the entrepreneurs, let me go into what the landscape looks like and what it will look like. Let me add a few sentences of context for that, too. So, the financial industry in general and the brokerage sector in particular are going through the same evolution that most of retail is going through. It’s a totally different context and a totally different set of value criteria that they think of in a typical retailer, but in general it goes through the same evolution, and I think it is good to think about that evolution from the customer’s perspective first. The customers we have and indeed the entire financial services industry are going through a disruptive time. This disruption creates amazing opportunities for newcomers to create innovation and come up with new concepts that are extremely valuable. The reason I say this is that our customers right now think about precisely this criterion. About 10 years ago, or maybe even as late as 2004 and 2005, the online customer experience was purely browser based, and by that I mean customers always thought of going to something.com or something.net or something like that. It always was a browser-based activity, but now with roughly about 12% of customers every year moving away from a traditional browser-based interaction line to highly fragmented ways of subscribing to services that includes apps and websites, the entire idea of the customer experience is in a period of disruption. Customers are demanding a new online paradigm.

This segment is part 4 in the series : Thought Leaders In Cloud Computing: Dan Raju, CIO Of TradeKing
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This is a must read for owners of stock brokerage firms. In India I find many of them in bad shape except the top 5. they need such a strategy consulting. Amazing article and amazing act by Dan. Cheers.

Sudip Monday, August 6, 2012 at 7:46 AM PT