Top-tier Australian bank Westpac this afternoon revealed it had over the past year deployed its own private cloud computing facility within its operations, working closely with the VMWare, Cisco and EMC cloud consortium to do so.

“Out of all the banks, we’re the only ones to have built a private cloud,” the bank’s group executive of Technology Bob McKinnon told journalists in Sydney this afternoon. “We’ve been building relationships with VMWare, EMC and Cisco — we’re done a lot of work with them in the past 12 months on mid-range [servers].”

The bank’s move comes as the term private cloud — referring to internal infrastructure which has many of the extensible benefits of cloud computing facilities — has swept Australia’s technology sector by storm over the past few months. IT services giants such as CSC and Fujitsu are pushing heavily into the space, and even telcos like Telstra and Optus are getting into the act, deploying their own cloud computing infrastructure and making it available to corporate customers.

McKinnon said the bank couldn’t let its data go offshore, which meant its choices were limited when it came to utilising cloud computing, as most large cloud computing providers — such as Amazon, Microsoft and Google, for example — do not operate dedicated facilities in Australia.

Much of the hardware for the facility is brand new, with McKinnon saying the bank had deployed the equivalent of hundreds of virtualised servers. The project has been driven by the bank’s general manager, Engineering & Sustainability; Technology, Randy Fennel. And Cisco’s Unified Computing System is core to the Westpac vision. The bank already had a close relationship with the US networking giant courtesy of an IP telephony deployment several years ago.

Some of the aims of the Westpac deployment have been the ability to quickly provision new processing capacity when needed, and cost savings gleaned through avoiding capital expenditure for each new internal technology project that required computing power.

Westpac chief technology officer Sarv Girn said the bank had already cut down the time it took to provision a new server “from weeks to days”. The organisation has first shifted much of its testing environments into the cloud, with Girn pointing out that it couldn’t afford to build a complete new traditional processing environment whenever a new technology project needed to be tested.

“There’s a big application in testing, a big application in development, a lesser application in production,” said McKinnon.

Girn sees the cloud deployment as just the latest generation of outsourcing — highlighting earlier types of financial services processing that had seen punchcards shifted around on trucks — and then the application service provider model which had been hyped a decade ago.

“Risk aspects haven’t changed in those three generations,” he said — and the process was still “all about end to end service delivery” for the bank.

Girn said it was a “no brainer” that applications such as corporate email and collaboration would eventually make their way into the cloud as well. Fellow financial services giant AMP has already shifted its corporate email platform onto a hosted Exchange implementation managed by outsourcing partner CSC, and Coca-Cola Amatil is following suit.

Not all organisations will be able to afford their own private cloud infrastructure. But those who can appear to be highly interested in the solution at the moment. “We’re a large organisation — spending $2 billion on transformation over five years allows us to have our own cloud when it comes to testing,” said Girn.

Look out for more coverage of Westpac’s broader IT operations over the coming days.

Image credit: Winam, Creative Commons

Related posts:

1. Virtualisation and private cloud: What’s the difference?
2. Westpac: A case study for the complex cloud
3. Westpac loses McKinnon deputy Sarv Girn
4. Westpac delays core IT overhaul
5. ‘Keen’ NAB joins global cloud alliance

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1. Martin Barry
   Posted 12/10/2010 at 3:52 pm | Permalink | Reply

   [quote]the bank had already cut down the time it took to provision a new server “from weeks to days”.[/quote]

   Sounds like virtualisation, not cloud.

   For anything to be labelled cloud it should be at least:
   - self-service – users can request changes to available resources at any time
   - on-demand – automation makes the changes in minutes or hours
   - elastic – flexible specifications of resources (# of servers, CPU, RAM, disk space, networking etc.etc.)
   - pay-as-you-go – incremental billing that multiples resources used by the exact duration they were used

   • Stewart
     Posted 12/10/2010 at 4:35 pm | Permalink | Reply

     @MartinBarry: I think you’re right. I was going to comment that what is described in the article sounds to me very much like where I work and I’ve never heard the word cloud used around here (thankfully)

     I work at/with/for a dual datacenter setup, running VMWare ESX. We’re currently hosting over 1000 VMs which have been provisioned to consolidate/replace old physical hardware spread over many sites. (Side Note: old timers here have a chuckle at this Consolidation Project – having sat through the Decentralisation Project over a decade ago where they replaced the central mainframes with on-site servers et al..)

     Anyway, my point being there’s nothing in the article that makes Westpac sound too different from my shop and I think your four Bullet Points of Cloud quite succinctly sum up why. (cue snide remark about blue skies all the way here…)

     • Renai LeMay
       Posted 13/10/2010 at 8:08 pm | Permalink | Reply

       OK, for starters we don’t know whether what Westpac is doing has self-service, but I would assume that it will eventually, because they are working with the vBlock consortium and Cisco’s UCS platform, which are also being deployed by Optus — and Optus will of course have self-service. Even if Westpac doesn’t have self-service now, however, I am sure they are pushing towards that.

       The on-demand piece is obviously getting closer with the days not weeks timing.

       As for the elastic side, I would say that Westpac does have that capacity — in the hardware side of it, at least, and I would guess the software side is on it’s way if it’s not already there. All of the components they have bought are meant to fit together to allow it.

       As for pay as you go … it’s not a managed service, it’s an internal resource, so it doesn’t really quantify directly, although they may be able to allocate ‘costs’ to certain business units etc. However, I doubt they would go that far, really.

       Yes, this could just be a VMWare extension — but it certainly sounded to me like it was going a lot further than that.

       • Martin Barry
         Posted 13/10/2010 at 8:32 pm | Permalink | Reply

         Agree with all your points except the billing side.

         I think the incremental billing will be used as much if not more than external cloud. Businesses already work hard to charge back IT costs to provide the feedback which leads to sustainable consumption of resources. The only difference for private cloud will be the “customer” turns up with a cost centre code rather than a credit card.

2. Martin Barry
   Posted 12/10/2010 at 7:23 pm | Permalink | Reply

   @Stewart I think the sadder thing is that by mistaking this for “cloud” they are missing out on the benefits achievable with the real thing.

   • Renai LeMay
     Posted 13/10/2010 at 8:09 pm | Permalink | Reply

     Hey Martin, have you seen any examples of private cloud in Australia which you would count as “the real thing”? Interested.

     • Martin Barry
       Posted 13/10/2010 at 8:24 pm | Permalink | Reply

       Renai, not living in Australia any more makes it hard to see if for myself so I can only work off information that is 2nd hand or in the public arena.

       I’m not personally aware of anyone that is providing something that I’d be happy to label “cloud”. Having said that the service providers are making the right noises, it’s just a matter of whether reality matches the sales pitch.

3. Stefan David
   Posted 13/10/2010 at 7:54 pm | Permalink | Reply

   Martin and Stewart,

   You are absolutely right this is not cloud but virtualisation. VMware still lock these guys at the hypervisor layer and they can’t switch between providers so the private nature closes them in and they dont get the capability or benefits true private, hybrid or public cloud offers. Mobilisation is the next stage and if Westpac think this is cloud they will continue to be two-three years (or more) behind their competition. The series of announcements they have made over the past few days sound a bit desperate… “look at us we are doing something – we dont know what but we are doing what the vendors are telling us to do”.

   sad that these guys are so behind and have been hoodwinked by vendors and they are now trying to hoodwink the market!

   • Renai LeMay
     Posted 13/10/2010 at 8:12 pm | Permalink | Reply

     Frankly, banks like Westpac have been doing virtualisation for a looong time — with VMWare and then before that with mainframes.

     What Westpac is doing here is an evolution of that, certainly, but it’s more than just “virtualisation on steroids”. I assure you that Westpac CTO Sarv Girn knows the difference.

     As for their recent series of announcements, I believe they were more aimed at publicising some of the work that has been going on in the bank for some time already — as well as heading off the idea that Westpac needs immediately to go through some sort of core banking transformation as CommBank has. I’ll publish some more thoughts on this tomorrow (Thursday).

     • Martin Barry
       Posted 13/10/2010 at 8:38 pm | Permalink | Reply

       Renai, nicely put. Why couldn’t he say it like that?

       “We’re working to move from vanilla virtualisation towards cloud but we are not there yet” conveys understanding, vision and progression.

       What we got was missing the understanding component which leads us to question the vision and progression.

4. Renai LeMay
   Posted 13/10/2010 at 9:40 pm | Permalink | Reply

   I’m going to ask VMware for a comment on this directly — I am interested to know what they would consider ‘private cloud’, as opposed to their advanced virtualisation solutions. There are a number of valid points being made here.

5. Renai LeMay
   Posted 19/10/2010 at 12:35 pm | Permalink | Reply

   Hey everyone, VMware Australia MD Paul Harapin has put forth his views on the difference between private cloud and advanced virtualisation here:

   http://delimiter.com.au/2010/10/19/virtualisation-and-private-cloud-whats-the-difference