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WAN Speak Musings – Volume III Over the last months, Quocirca has been blogging for Silver Peak System’s independent blog site,
http://www.WANSpeak.com. Here, the blog pieces are brought together as a single report.
11 places for geeks Is the role of the geek in the workplace like watching the final days of the dinosaur? And if so,
just where can this poor, threatened species go to find a conservation park suitable for them?
Broadband – a game of
leap frog, or just a
squashed toad?
Letting politicians make major decisions around technology may not be a good way to do
things. However, allowing vendors to squabble around what the politicians are doing just
makes things several times worse. The UK is running the risk of becoming a broadband also-
ran – and it has no-one to blame but itself.
Mobility – How shall I
love thee? Let me
count the ways…
Your mobile workforce need to be controlled – but it has to be as seamless as possible. WAN
speeds are becoming more important as VPN and enterprise application access needs are
stressed as more employees hit the road with BYOD.
Dealing with your
organisation’s near
certain malware
problem
You have all the protection you need in place to avoid viruses, worms, Trojans and hackers?
It’s highly doubtful, and different approaches are needed to avoid falling into a position of aperception of information security.
A Magical Trinity – ask
and you shall receive.
A technologist’s worst nightmare – having to go to the business to ask for yet more money.
How can this be made less of an onerous task – can the business be brought on board by slight
changes to how the request is messaged to them?
I’ll give you something
to do that’s new – stop
using the word
“innovate”
Are you fed up of vendors stating that they will help you in your quest for innovation? Has any
vendor ever defined what they mean by innovation – or asked you what you mean by it? A
more balanced view of mixing improvement, innovation and invention may make you a far
better organisation…
Core concerns about
SDN
SDN is great – honestly. However, it has its downsides and for it to deliver on its promise, SDN
may need to face up to some unwelcome truths, and end up as a hybrid solution somewhere
along the continuum of today’s intelligent, managed switches and the long-term target of a
completely dumb box.
The ultimate “Venn”-
dor choice guide
Are you finding it increasingly difficult to find the right vendor for a specific technology product
as part of a business solution? Maybe this approach of using a Venn diagram can help you.
Worried about the
Patriot Act? Why?
The US Patriot Act seems to send shivers down the spines of non-US companies, fearing that
they could have the US authorities poring over their data without them having any say about
it. Maybe this is just a slight over-reaction?
Showing red RAGs to
headless chickens
It is a common approach now to use traffic-light systems to show the overall health of a system
to people – green being “everything is fine”, amber “watch out” and red “major problem”.Doing this without adequate additional information may work against you, though.
Silicon v. Carbon: my
money is on Silicon
Automation is wonderful. A computer is quite happy doing the same thing, day in,
day out without suddenly losing focus and making the sort of mistakes a human tends
to do. So why do we still include humans in so many steps of a process?
Faster financial
networks need big
data analysis for
compliance
The speed of dealing with large financial transactions can lead to errors that cannot be easily
called back. Systems are needed to help identify any issues in real time and allow for
rectification – and big data could be the light at the end of the tunnel.
We’ve all seen the headlines over the last year or so. “The end of IT”. “No software”. “The move to cloud”.
It looks as if the days of the geek are numbered. The capability to dig into the bowels of technology through the use
of CLIs (if you need to be told what a CLI is, you are not a geek) is disappearing as technology commoditises and dumbs
down so that anyone – even a <shudder>business person </shudder> – can set things up and be off and running
through such nannying approaches as “self -service”. Businesses seem to be looking for people who can understand
exactly what the business does – for example, being a retailer, operating in the service industries or manufacturing
stuff. This is not where a geek fits – such grubby commercial aspects are outside of their area of interest.
No self-respecting geek would ever be found doing anything business related, or stooping to do things through an
easy-to-use graphical portal. At the heart of geekdom is the striving for a more difficult way of doing things; for
example, cracking an iPhone so that apps can be loaded on from the geek’s own Linux -based, Raspberry Pi system
running off sea water and platinum electrodes for power.
Surely there is somewhere for poor geeks to live out their lives? Some form of a protected environment – a reserve,
say – where this endangered species can stay and do useful work?
Let’s look at the options for geek reserves.
1. In the commercial private organisation. This can only be a short-term place for geeks. The long-term strategy
is for such organisations to move to the cloud and minimise the use of in-house data centres and self-run applications.
The geek will suffer a slow and agonising death here.
2. The service provider. A much better place for the geek. Service providers (along with telephony operators
and many independent software vendors (ISVs)) will require techie geeks who are capable of knowing their ASCII from
their ALBOW. Although technology may well continue to commoditise, these companies require people who can
tweak this here, change that there and come up with something that is a few tenths of a percentage faster than it was
before; something that is a cent or two cheaper than it was previously; a system that is a micron ahead of the blackhat ninjas trying to break down the door. Possibly the equivalent to Valhalla for the geek: a tech fest where they can
be the successful warriors.
3. Open Source land. This could well be the ultimate for geeks. Not only does open source demand technical
wizardry, it also is a way of railing against the status quo. Pure open source is not Microsoft, Oracle or IBM; nor is it
Verizon, SAVVIS or Salesforce.com. Open source is (slightly) subversive – no up-front payments, no end-user “tax”,
just freely available software that anyone (OK, anyone who can understand how to build a working version of the
software from the various bits that are required in the open source jigsaw box) can put together. There are some
small problems here, though – such as earning a living to pay for the roof over your head and for food – unless you
are still living at home and can leave all that unnecessary capitalist stuff to the bank of mum and dad.
In all seriousness, the roll for the hyper-techie is changing. Businesses need people who understand the business and
can advise accordingly. Those who cannot adapt need to look outside of the business environment to those
organisations that still need technical wizards – there will still be places where your skills are accepted.
And as for the title of this piece? If you understand it, you are probably a geek.
Being old and gnarly, I remember the way that I, as a Brit, could look down my nose at the Yanks during the late 1990s
as our fully integrated mobile telephone system, stretching across the whole of the European continent was so
modern. It made the US’ approach of having to tell a provider that you were going to San Francisco from New York
for a few days, and would it be OK if you could possibly use your phone while you were down there look so ancient.
OK – so the US has caught up now, but there do seem to be problems in both our cases of providing an internet that
supports our commercial needs that may slightly echo what went before.
The UK was pretty good when it came to putting in WiFi – but then went all expensive on it and has been passed when
it comes to how cheap it is to gain effective WiFi access in hotels or out on the streets. In the UK, expect to pay – in
the US, expect it to be free (and complain like mad if a hotel tries to charge).
At the basic broadband level, the UK was an early adopter of fibre, rolling out mile upon mile down streets for future
use. The future didn’t seem to come; much of the fibre remained unused and for more than a while, we struggled
along with ageing copper from the exchange to the cabinet and from there to the home. Speeds of above 2Mb/s
were pretty much unheard of, but providers tried to call it “superfast” broadband. Meanwhile, the likes of the
Netherlands were putting fibre in – and using it – and getting speeds of above 10Mb/s.
Now, as the UK finally figures out the value of fibre, if only fibre to the cabinet, we are getting speeds of “up to”
40Mb/s – and that “up to” is a bone of contention. More accurately, it is contention that is the problem. Providers
are sharing data lines, and at peak periods, users are getting only a fraction of their “up to” speeds.
Where does this leave us? Well, those countries that had little infrastructure in the past and have recently joined the
European Union have been using the inward investment to improve their speeds. According to Akamai, real-world
figures show that the UK has managed to climb to the dizzy heights of 6.3Mb/s, while Romania was marginally aheadon 6.4Mb/s.
Other countries have chosen to carry out wholesale upgrades to their systems and are ahead – even if only slightly -
of the UK. Ireland and Belgium are on 6.7Mb/s; Sweden on 6.8Mb/s and the Netherlands on 8.5Mb/s.
The US is on 7.2Mb/s, but it is the eastern countries that are truly leaving us behind. Japan is on 10.5Mb/s, South
Korea on 14.7Mb/s and Hong Kong on 54Mb/s – or over 8 times as fast as the UK.
Can the UK play leapfrog and be a world leader? Current activity points to a “no” on this – 4G licences have only just
been auctioned, leaving the UK in the slow lane for high-speed wireless adoption. The current roll-out of truly fast
wired broadband looks like the UK will remain behind the pack and way off from the front runners for wired speeds.
In a global economy, internet access and the effectiveness of it is not a local thing – the UK has to be able to play withthe big boys and show that it is a place to come and be at least as good as the rest of the world for connectivity and
overall performance. Sure, business-to-business connectivity is relatively good, but it is the distributed workforce
that provides the engine for the organisations, and the consumers that put the money into the businesses through
their purchasing activities. Where the experience is poor, both will start to look elsewhere, to companies and retail
outlets in other countries.
We need better connectivity. The worry is that on the connectivity superhighway, the UK could be the toad hopping
across the road, getting squashed by those leapfrogging along it.
Let’s do a quick calculation. How many employees do you have, rounded up to the nearest 100? What percentage
of them are mobile? Have they sourced their own devices through BYOD? Do you use VPN access through to a private
data centre?
Hang on – what has the last question got to do with all this?
Let’s assume that you are a middling size company with 1,000 employees. Let’s also assume that f or the sake of
argument, 40% of these are “mobile” – as in they use a device to carry out work activities while outside of the office.
That’s 400 people who are making demands on the corporate ITC platform at some point. Let’s assume that there is
a 20% concurrency – therefore, 80 people are all working against your resources at the same time.
What is the WAN speed in and out of your data centre? Again, let’s assume that you have a decent bank balance asa company and that you have gone for a pair of load balanced, 100Mb/s leased lines, so giving a total maximum
capability where both lines are working of 200Mb/s. For those 80 people, they have the capability to access 2.5Mb/s
if it were to be dedicated to them alone via that VPN. Sounds great, doesn’t it? Not quite what you are likely to be
getting at home (in many cases, probably around a tenth), but good enough, surely?
Unfortunately, though, apart from the fact that the “last mile” for many of these mobile workers will be over a highly
contended public link of WiFi, ADSL or 3G, there are 600 desk-bound people who will also be using those lines from
inside the organisation – and if you are using VoIP as well, then a whole raft of phone systems. Some of these services
may be using virtual connections with dedicated bandwidth – so taking that resource away from any real use even
when the service the link is there for is not in use.
As you can see, the amount of bandwidth available per employee or per task starts to fade away quite rapidly. Takinga 10,000 employee organisation with a single datacentre, maybe using a degree of video conferencing alongside
everything else, starts to bring the available bandwidth per workload down to what an individual would have expected
back in the 20th century – and yet they believe that they are receiving 21st century, superfast speeds.
You could just throw more money at the problem: use 1Gb/s lines or build more data centres to share the load. You
could use external, co-location data centres and ensure that the owners have enough bandwidth plugged in. And yet,
as the inexorable march of growth in IP traffic grows, you’ll still run up against a brick wall of bandwidth constraints
at some point.
WAN acceleration can really help – instead of every packet transferring from the access device to the service platform,
“static” content (i.e. that which doesn’t change much) can be cached either at a server closer to the access device or
on the access device itself. The inherent “chattiness” of certain traffic can be curtailed, with only the “real” IP needs
traversing the WAN. Packets can be re-shaped to be more efficient in how data fills the pipe. Data can be
deduplicated to remove the transport of the same information down the same line more than once.
A modern organisation needs good WAN connectivity – and its mobile workforce will be increasingly demanding that
this is in place. Unmanaged use of what can be seen as very fast connections will lead to a poor end-user experience
and lots of complaints through to the help desk. Get to grips with the problem as early as you can – monitor usage,
manage bandwidth using acceleration and ensure that everyone gets the best that your connections can truly offer.
The networks of Europe’s organisations – and by extrapolation, those elsewhere – are riddled with malware and the
majority have been the victims of a targeted attack at some point in the recent past. That is the startling conclusion
of a recent Quocirca research report titled “The trouble heading for your business” which is freely available here.
As grim as this might sound, what it actually means is that reality is simply being accepted. In the past, security vendors
pretended there was a Utopian position that could be reached, where all malware could be recognised and blocked.
This was never true in the first place and it is less true today than ever.
More and more zero day malware (that which has never been seen before) is being specially prepared to target
individual organisations, often using polymorphism (making every instance appear as unique) and hiding malware
either using encryption or by embedding it in other files (for example spreadsheets and PDFs).
The European organisations Quocirca spoke to in its survey are not alone. They are in the company of some the most
eminent organisations in the IT industry. Facebook, Twitter, Apple and Microsoft: have all been the focus of targeted
attacks, just during February 2013.
Microsoft recently admitted that “During [an] investigation, we found a small number of computers, including some
in our Mac business unit, [which] were infected by malicious software……” see here for source. Microsoft appears not
to have been seriously impacted; at least if the aim of the attackers was to steal data, as it goes on to say “We have
no evidence of customer data being affected and our investigation is on-going”. Even though Microsoft’s defences
were penetrated, it was prepared to acknowledge this and make a statement that its customers’ data remained safe
– something many others could learn from.
The story at Facebook was alike; malware did get on to its devices, but it was confident data was not stolen – see herefor more information. Reports about the incident at Apple are similar. Twitter had to admit to 250,000 user account
details being compromised.
All organisations must accept that if they become a target, it is very hard to stop determined cybercriminals or
hacktivists getting malware on to their systems. What is essential is to ensure that such attacks are identified as soon
as possible and that it is hard for the perpetrators to extend their attacks within the impacted networks.
Security vendors are accepting this reality too. One Quocirca spoke to last week was talking about its new capability
for “retrospective detection”. In short, when the vendor detects some deviance at one of its customers it will come
and check its other customers’ networks for something similar. This is nothing short of an IT security vendor saying,
we cannot keep your networks free of malware but we can aim to minimise the time in which new attacks are
identified.
Quocirca’s report goes on to identify a problem that many Europe organisations still have to face up to. There is an
over-reliance on traditional security technology and not enough use being made of more advanced techniques. Whilst
Quocirca cannot be sure of how Microsoft, Apple and Facebook are defending themselves it seems that their security
posture is predicated on the fact that attacks will penetrate their defences but timely detection and multiple layers
of security means the aim of these attacks can be foiled.
With their high level of interaction with consumers and the need to store personal financial data, retailers and
financial services organisations are some of the most concerned about the potential impacts of targeted attacks.
However, no business can afford to be complacent. With the rise of hacktivism any organisation could unexpectedly
All must be prepared to invest in security measures that prepare them to respond to these increasingly sophisticated
and well-targeted attacks on their employees, networks, applications and data. Those that do not face data losses,
regulatory fines, damaged competiveness and, in the worst case, the collapse of their businesses.
A Magical Trinity – ask and you shallreceive.
In discussions with end users, I’m often asked how they should put together a case for getting funding for a particular
project. For example, in networking, it may be put to me in words along the lines of “Hey, I’d love to get a chance to
try out multi-lambda fibre with MPLS to carry H.264 video traffic prioritised over data – how can I get the business to
stump up the money for it?”.
Biting back the urge to play back a recording of what has been said to me and just say “There’s your problem”, I would
proffer the following advice:
The business should have no real interest in technology. If it can get where it needs to using baked bean cans and
pieces of string, it should do so. A business is not there to support or embrace technology; it is there to make money
– and this applies even if the organisation is a not-for-profit or a charity.
No – there are only three things an organisation should worry about. If you can create messages supporting your
project that encompass these, then you should be closer to getting to the money.
1) Risk – organisations want to lower the risks to the business (and to the board members at a personal level).
If you can show how your technology can lower risk at a business level, particularly with regard to governance,
regulatory and compliance (GRC), the board will listen.
2) Cost – the big issue as far as many at board level are concerned. If something has an overall cost, then you
are already on the losing end of the discussions. Therefore, don’t use terminology such as total cost of ownership(TCO) – this has connotations of an ongoing cost against the organisation’s bottom line. Any technology should be
capable of demonstrably removing cost from the processes that it impacts – this is what the business is interested in,
as this adds to the bottom line.
3) Value – slightly more ephemeral, but just as important. What is it the business wants to do? Your technology
should help this happen, whether it is selling more of what the organisation already sells at the same or greater
margin, or if it is bringing a new product or service to market at a good enough margin.
So – what would this mean for the project mooted in the first paragraph?
Risk: By utilising quality and prioritisation of service, existing applications will not be impacted and so business services
such as cyclical reporting and application availability will be maintained.
Cost: The capability to carry video streams at a high level of fidelity without the video or sound going out of sync or
juddering would allow more of the organisation’s meetings to be carried out over video conferencing, so lowering the
costs of these meetings due to travel and loss of working time.
Value: By using prioritisation, the technology will be more flexible to respond to the business’ needs as it changes its
strategy to reflect what is happening in the markets, so ensuring that new business campaigns will not require lengthy
planning, developing and testing at the technology level.
Obviously, there will be a need to quantify some of these areas – and I’m not in a position to help you here. However,
concentrating on these three simple areas should give anyone the needed foundation for creating a business-focused
proposal as to why a technology project should be funded by the business.
For many, the main focus will be in area 1 – improvement costs less that innovation or invention, and the immediate
returns can be a lot higher. For others – such as automotive, say – innovation may be more of a focus. For markets
such as pharmaceuticals, invention will be far more important.
Such a granular approach helps in setting budgets and in helping to measure the impact of any changes. It also allows
organisations to benchmark themselves as to where they are currently – are they laggards having to drag themselvesup to the mark through concentrating on improvements or are they leaders where they have the luxury of investing
heavily in invention?
Whatever, I believe that such a modified way of looking at how changes need to be made in a business is truly
innovative – unless, of course, it is just an improvement on what you are already doing.
Core concerns about SDN
Software defined networking (SDN) is – in theory – a great idea. By abstracting the control and management functions
of a network from the physical boxes, the intelligence that is generally carried out through expensive operating
systems and firmware held on proprietary silicon in the form of ASICs and FPGAs in individual network hardware itemscan be placed on commodity servers. This then ptovides a common means of dealing with network needs and leaving
the switches to deal with the grunt work of actually routing the data packets as required.
As I say – great, in theory. The problems begin to appear when this is done in practice.
On the whole SDN should be OK for the average business with an average commercial data centre. Data transmission
needs can be dealt with through the virtualisation of the network and aggregated linking of available bandwidth to
provide the high speed links that are required for the movement of data packets between the data plane (the part of
the network still being managed by the switches) and the management and control planes (carried out by the more
commodity-based servers).
However – put this into a major cloud or other service provider, or a carrier, and the problems start to occur.
Now, performance is not only a key consideration, it is close to being THE consideration. If every packet of data has
to be moved from the main data plane up to a different level and then back down again, the latency that this will
create in the network will be too much for the service providers - and its customers - to bear.
What is needed – and what seems to be happening – is more intelligence in how SDN deals with data packets. As long
as a packet of data has been adequately identified, then the data plane should be able to deal with this in a straight-
through manner, without the need for the packet to be brought back into the management and control planes.
Simple enough – but this brings with it a raft of other possible issues. If a blackhat could spoof a packet, then there
would be no intelligence in the switches to identify that the packet is bad: once designated as “safe”, the packet would
be able to travel at will around a network.
There is an obvious way around this: build intelligence into the switch so that packets can be inspected and ensured
as being good while they are at the data plane.
So therein lies the problem. SDN is a brilliant idea in that it separates out the data plane and the control and
management planes. The problem is that the data plane has little to no intelligence. To put back the intelligence
means moving some of the functions of the control and management planes down to the switch. And what do you
then have? An intelligent switch – pretty much like we already have from the likes of Cisco, Juniper and others.
Is this an insuperable problem for SDN? No – what is more likely to be the end result is a range of systems that range
from the fully SDN-compliant (switches with little intelligence suited for general network use); systems that are “SDN-
The Venn diagram above should help buyers with this. The three inner circles show the components required to create
an IT platform; servers, storage and network, each with their own software abstraction layer. The outer circle brings
in the concept of private cloud computing, which if abstracted through the use of software defined data centre
concepts should lead to the capability for interoperability across hybrid cloud (private plus public) deployments.
The trick then is to position your choice of vendors on the diagram. For example, vendor “A” may be a pure-playvendor with nothing but storage, so it would go into the “Storage” circle. Vendor “B” may be a pure play network
vendor – so it goes into the “Networks” circle. Vendor “C” may have both server and network capability, so it goes
into the overlap between “Servers” and “Networks”.
By laying out the various vendor options in this way, you can then optimise the vendor choice, bringing the number
of requirements down through using the overlaps carefully.
However, even if a vendor fits into the triple overlap, it does not necessarily mean that you have found the ultimate
answer – there still may be some point functional solutions required. The diagram can still help here: if the vendor
that crosses over all three areas is weaker in its approach to, say networks, position it more to the server and storage
side of the central overlap, and then identify a vendor in the networks circle that helps to move the overall solution
towards the centre.
Provided that the vendor community follows the basic concepts of the “software defined” world, pushing for a good
enough level of standards (see another post on the possible issues here “ If you wait long enough, the one you want
may come along”), the optimised choice of vendors will then provide a platform where the three levels of software
abstraction – software defined computing, storage and networking – will all come together to provide a platform that
will be flexible, manageable and responsive as a software defined data centre.
Worried about the Patriot Act? Why?
In my discussions with end-user organisations around the world, the USA Patriot act often comes up as a worry for
organisations when it comes to data security in a cloud world. The act, initially signed off by George W Bush in 2001,
is better looked at as its full name – the Uniting and Strengthening of America by Providing Appropriate Tools Required
to Intercept and Obstruct Terrorism Act.
Quit a mouthful. However, note what the Act is there for. It is not to go out and wilfully get business information: it
is there as part of the reaction to the 9/11 terrorist attacks on the US.
The Act, however, has got some sections that worries many in the data security space. For example, it enables certain
security forces to enter business premises and search through records – physical or electronic – without the
agreement or even knowledge of the business owner.
This has then been extrapolated to it being the case that data that is held on storage systems held within a data centre
that is owned by a US incorporated company could fall under these rules. So, even though the data centre is physicallyin the UK, as the organisation owning it is a US company, then the FBI can demand access to all the data in that facility
– and the owning company will have to provide that access.
Firstly, this is not what the Act says and as yet, there is no precedence to show that such access would be allowed on
another sovereign country’s soil.
Secondly, the Act is there for situations where there is distinct suspicions of terrorist links – it is not there for fishing
expeditions against commercial organisations and their activities.
Thirdly – and herein lies the statement that will always be the bone of contention – what have you got to hide anyway?
If all that your organisation is doing is going along on a day-by-day basis carrying out its business, does it make much
difference if the FBI, the CIA or the NSA get hold of your company data? Is it likely that they will sell your strategy
plans on to the competition? Are they going to take your customer details and place ads in the papers along the lines
of “The FBI – your one-stop-shop for email contact lists”?
Yes, I can hear the rumblings of the comments already – it’s alright saying that you have nothing to hide until the
Powers That Be descend on you having had access to information about you that you were unaware was in the cloud,or that was incorrectly entered by someone.
OK – it’s a possibility. But as an organisation, should I be losing sleep over the Patriot Act? I doubt it. If you are
reading this while wearing a tin-foil hat sitting under a reinforced table with the windows blocked out, then external
data centre facilities – cloud or co-locational – are probably not for you. If you have deep data security worries, then
it may be that you need to choose a facility that is outside of the Patriot Act’s reach completely – non-US owned in a
non-US location.
There could be one other solution – “Embassy” storage. Here, the physical storage is placed within a specific cage in
the data centre facility. Preferably, the customer owns the physical storage – not the facility owner. The cage is
nominated as being part of whatever country the customer is headquartered in – so the storage can be deemed to be
under the laws of Germany, France, the UK or whatever. The Patriot Act then doesn’t reach the storage device itself
– unless they want to get into the sort of issues that would be involved with entering another’s sovereign territory of
an Embassy on US soil..
This needs agreement at a governmental level. It can be done, as Quocirca is aware of a couple of companies that
have managed to take this approach – but it is not easy.
It may just be easier to be pragmatic and not worry – unless your business is a bit on the shady side?
Showing red RAGs to headless chickens
I recently met with NetEvidence, a company that provides insights into network and application performance. Itprovides the service through a cloud offering, and allows areas such as root cause of poor performance to be rapidly
identified, and can then integrate into help desk systems such as Remedy to kick off remedial action.
NetEvidence provides a role-based dashboard view that can be tuned to the requirements of different people in an
organisation – for example, a network engineer can focus in on what is happening at the network level, whereas a
data centre person can look more at the servers. Business people can also be included, having views that are more
targeted at them – maybe showing how the ecommerce site is performing, or the ERP system.
The dashboard works on a traffic light system – green when things are OK, amber when there may be a problem and
red is “oops, better do something here”. This red/amber/green (or RAG) is used by many vendors in different areas
and gives a quick and easy visual means to see how things are going.
But – let’s take an example where it may not be the best way to do things. The monitoring service is cloud-based.
The main data centre is connected to the business manager’s office via a leased line. The leased line goes down, but
the general access to the internet from the business person’s office is still there. Therefore, the monitoring service is
still active, but the data centre is not available.
The business person’s dashboard is a sea of red – no ecommerce availability, no ERP, no SFA, no CRM – all of these
are provided via the data centre and they are not accessible.
Picture for yourself what the considered response from said business person will be. A case of “Oh, never mind. I’m
sure it will all get sorted”? More like a very close imitation of a headless chicken as panic sets in, as pictures of money
going down drains flits through that oft-unused brain.
OK: yes, I do remember the "fatal flaw" found in a certain CPU some years back, and the problems in some commercial
off the shelf software (COSS) systems leading to erroneous calculations. Hopefully, these are now in the past - COSS
worth its salt will have been tested for code quality and will have been extensively tested; on the hardware side, I
haven't seen a repetition of such design errors for some time.
In a battle between silicon and carbon as to lack of making process errors, my money is on silicon winning every time.This still leaves a fairly major place for humans, though. Ask a computer to make a decision based on a limited set of
information assets, and it will still struggle. Get it to identify the odd one out from a series of pictures, and you'll be
looking at pretty expensive software that will still make errors on a regular basis. For humans, surely this is where our
skills lie? And not only the skills, but the interest. I'd certainly be far more attracted to a job where I am making
informed decisions based on using my brain to weigh information in a way computers can't.
There's hope for the humans as yet - just remove them from the low-end tasks and use them for dealing with the
more complex issues.
Faster financial networks need big data
analysis for compliance
“It only takes four seconds to invest thousands of million of pounds", said Jérôme Kerviel, the now-imprisoned rogue
trader. While it makes me wonder whether I’m in the right business, or on the right network, his and other similar
stories do emphasize the very thin red line between huge success and ruinous behaviour in the financial trading world,
where ultra-low latency financial networks operating at the speed of light create huge repercussions from even a
single error – intentional or not.
A Japanese trader, who wanted to sell one share for 650,000 yen, but got the key-in sequence wrong, offered 650,000
shares for 1 yen apiece! The Tokyo Stock Exchange had to close down for several hours to unwind all the millions of
purchase placements that followed. Similarly, a Lehman Brothers dealer in London 12 years ago wiped £30bn off theFTSE when he inadvertently ordered sales of shares in blue-chip companies such as BP and AstraZeneca that were 100
times larger than intended.
The reaction to these and similar events has been more network controls, stricter regulation, not only in the forensics
department – finding out what actually happened after the catastrophic event - but also better proactive capabilities
to spot and stop a disastrous deal from closing at all.
Millions of high-volume trading deals are being transacted every minute across the global financial networks like BT’s
Radianz and Orange Business Services Flexible Trading Service. With faster speeds and more channels of electronic
communication, regulators are feverishly trying to reign in trading transgressions and create more transparency. The
most important acts are the US Dodd –Frank Wall Street Reform and Consumer Protection Act (D-F), which applies to
any financial institution with operations in the USA; and EU MiFID (The Markets in Financial Instruments Directive2004/39/EC). D-F is in on-going implementation mode (despite some delays), second generation MiFID II is a work-in-
progress.
Most importantly, D-F requires swap trading companies to document thoroughly any deal within 24-hours if so
requested by a regulator. That documentation must include all voice, mail and chat data relating to a specific deal.
Enter ‘big data’ and a 3-step implementation process.
The ability of big data products to handle large volumes of unstructured data is clearly the first step towards a highly
scalable, near real-time monitoring of high-speed networks. The second step is developing applications that can
rapidly synthesize the data and generate reports in the formats required by D-F.
Compliance applications are now becoming available to investment banks, institutional investors, hedge funds etc.,
from companies like Headstrong, Traiana and Fonetic. However, given that the fast-approaching drop-dead D-F
compliance date is set to Q1 2014, the general state of market progress in the financial institutions, and in the
regulators in major markets like the UK, France and Germany is too slow.
The third step is to develop applications that can spot non-compliant deals e.g. when a trader suggests on the phoneor in an email that a deal is finalized ‘over lunch’ i.e. outside the range of deal-monitoring systems, and the monitoring
system then alerts a compliance manager. This final step is still under development and is not yet a D-F requirement,
but follows logically from investments in the first two steps.
Overall, there are improvements in transparency and critical analysis of trading activities on financial networks, but
threats are still faced from other fast (but erroneous or malicious) information flows. On April 23rd, $130bn was
temporarily wiped off the value of stocks in the S&P 500 after the Associated Press Twitter account was hacked and
a false message stated that ‘Two explosions hit the White House. Obama injured’. The Dow Jones dropped 100 points
in less than a minute. So today, the financial networks ‘move ’1000’s of millions of pounds’ in few seconds; but it is
misinformation and lack of real-time compliance tools that can cost investors huge sums of money.
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Quocirca is a primary research and analysis company specialising in the
business impact of information technology and communications (ITC).
With world-wide, native language reach, Quocirca provides in-depth
insights into the views of buyers and influencers in large, mid-sized and
small organisations. Its analyst team is made up of real-world practitioners
with first-hand experience of ITC delivery who continuously research and
track the industry and its real usage in the markets.
Through researching perceptions, Quocirca uncovers the real hurdles to
technology adoption – the personal and political aspects of an
organisation’s environment and the pressures of the need for
demonstrable business value in any implementation. This capability to
uncover and report back on the end-user perceptions in the market
enables Quocirca to provide advice on the realities of technology adoption,
not the promises.
Quocirca research is always pragmatic, business orientated and conducted in the context of the bigger picture. ITC
has the ability to transform businesses and the processes that drive them, but often fails to do so. Quocirca’s mission
is to help organisations improve their success rate in process enablement through better levels of understanding and
the adoption of the correct technologies at the correct time.
Quocirca has a pro-active primary research programme, regularly surveying users, purchasers and resellers of ITC
products and services on emerging, evolving and maturing technologies. Over time, Quocirca has built a picture of
long term investment trends, providing invaluable information for the whole of the ITC community.
Quocirca works with global and local providers of ITC products and services to help them deliver on the promise thatITC holds for business. Quocirca’s clients include Oracle, IBM, CA, O2, T-Mobile, HP, Xerox, Ricoh and Symantec, along
with other large and medium sized vendors, service providers and more specialist firms.
Details of Quocirca’s work and the services it offers can be found at http://www.quocirca.com
Disclaimer:
This report has been written independently by Quocirca Ltd. During the preparation of this report, Quocirca may have
used a number of sources for the information and views provided. Although Quocirca has attempted wherever
possible to validate the information received from each vendor, Quocirca cannot be held responsible for any errors
in information received in this manner.
Although Quocirca has taken what steps it can to ensure that the information provided in this report is true andreflects real market conditions, Quocirca cannot take any responsibility for the ultimate reliability of the details
presented. Therefore, Quocirca expressly disclaims all warranties and claims as to the validity of the data presented
here, including any and all consequential losses incurred by any organisation or individual taking any action based on
such data and advice.
All brand and product names are recognised and acknowledged as trademarks or service marks of their respective
holders.
REPORT NOTE:This report has been writtenindependently by Quocirca Ltd
to provide an overview of theissues facing organisationsseeking to maximise theeffectiveness of today’sdynamic workforce.
The report draws on Quocirca’sextensive knowledge of thetechnology and businessarenas, and provides advice onthe approach that organisationsshould take to create a moreeffective and efficient