Fidelity International, the ex-US business of Fidelity Management and Research with $663 billion of assets under management, is moving its entire data needs in Asia Pacific to cloud vendors.
It achieved a milestone at the beginning of March when it shut down its Hong Kong data center, says Lee FitzHenry, program director for Asia cloud transformation at Fidelity International.
The firm still maintains two racks of servers at a data center in Singapore, but its other major data center in the region, in Japan, is slated to close by September.
The firm is now using Microsoft Azure for data storage, and AWS for computing business applications.
That includes all types of data, including customer data and markets data for its portfolios, FitzHenry says.
From strategy to transformation
FitzHenry is a longstanding Fidelity tech executive, running a variety of digital, web, and middleware projects, first in London and since 2017 in Hong Kong.
His latest title was meant to be head of Asia Cloud Strategy, he says, speaking at an AWS event: “We realized to deliver what the businesses were asking for, we needed to call this ‘transformation’, because it was a change across the entire business, not just in the tech and digital teams.”
Although the firm had set out a broad strategy for moving data to the cloud, a maturing contract at the Hong Kong data center provided the catalyst. The firm’s various business units were already clamoring for greater data use. The idea of just buying more server space at a data center, relying on a prediction of how much capacity it would need over the next several years, didn’t seem like a good idea.
“We weren’t going to renew,” he told DigFin, saying the company was against doing a “lift and shift” of its existing server capacity. “That’s when we knew Asia had to move to cloud at scale.”
Nonetheless, FitzHenry had to spend a good deal of time working with the various business units to assure them of the benefits of a move to cloud. “The first priority was the compliance team,” he said. “They weren’t even sure if we could do this.”
T-shirt sizing the apps
Once the firm decided to go all-in, and abandon its on-premise data hardware, FitzHenry’s team reviewed all the applications Fidelity uses. They bucketed each app in terms of its importance in what he calls “T-shirt sizing”, with each app either small, medium, or large. That gave the firm a sense of what every app did and how best to migrate it to Azure or AWS.
The firm hired Deloitte to help with the project.
The project team set out a few core missions.
First, the migration had to have a value to the business, which means providing Fidelity’s clients with better service.
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Second was to automate everything, turning hardware infrastructure into software, and putting every application in the migration pipeline. The team worked with Richard Paddock, the head of technology for Asia Pacific, to automate every business workload before uploading it to the cloud, with only a handful of functions left requiring a manual touch.
With the help of Deloitte, he ran “pods” of 8 to 10-people teams that were given accountability to build, develop, test, and product new applications for the cloud environment. “They aligned what they were doing with each business product owner, reviewed their tech backlog, their tech compliance, and their business workloads,” he said.
Cost in the cloud
The T-shirt sizing was a good way to see what applications could be shut down. In the old world of putting everything on-prem, business activities for data tend to be bundled, so it’s difficult to cost them. But with cloud, every app, and every computation, can be priced individually.
“It’s about accountability,” FitzHenry said. “Now every business product owner can see the exact cost, by the minute, by the hour, by the day, by the month of running that application.”
It became clear which business units were subsidizing others, and which had been enjoying a free ride.
“You’d be amazed how many app owners [ie, business unit heads], once you put a price point on it, said they don’t need it anymore,” FitzHenry said.
But this also enabled the firm to operate more flexibly. For example, it’s easier to shut operations when they’re not being used, such as over weekends. Fidelity found it straightforward to pause data activities in China during Lunar New Year, something it could not have done before.
“This is a huge step forward, culturally, organizationally, and cost-wise,” FitzHenry said. “We could never have seen these benefits on prem.”
Apps have performed well on cloud, he adds, and in some cases Fidelity has found it better to subscribe to third-party software services via AWS rather than rely on old proprietary apps.
Looking to the long term, FitzHenry says moving to the cloud has boosted the firm’s efforts to reduce its carbon footprint. The same precision on pricing also applies to measuring the carbon impact of every app. “For many organizations, especially for the younger generation, sustainability is key. When we operate on cloud, the sustainability angle improves.”