Publications & Resources
September/October 2009
Focus: Information Systems & Security
Virtualization Takes Center Stage – How Your Financial Institution Can Benefit From This Cost Saving Technology
By Tom McInerney
Virtualization. It’s a recent buzzword in most every IT steering committee gathering at banks across the country. Why, in a time when cost cutting is the mantra within the financial services sector, is this emerging technology taking center stage for forward thinking industry leaders?
Call it cutting edge technology, the next big thing, or the most logical step toward skinnying down costs and earning a nod from the regulators for a risk and compliance program that’s on the right track. Server virtualization is taking center stage at community financial institutions, emerging as the shining star in a formidable playbill co-starring a down economy, faltering consumer confidence in the financial sector, and a tangle of technologies reaching end of lifecycle. It’s real, it’s viable, and it won’t cost you an arm and a leg.
What does virtualization mean and what’s in it for you?
Aside from substantial cost savings, your institution can leverage virtualization technology as a huge benefit to your Risk Management and Disaster Recovery program. Let’s take a peek inside your server room. The rack of servers sitting with innocently blinking lights is not as docile as it leads you to believe. It’s emitting heat begging to be cooled, sucking power every single day, and daunting you with the threat of, “if little ol’ me goes down, and I do have a fickle temper, you’re in trouble.” So you compensate by backing up data both on-site and off-site, building redundancies, striking up impressive SLAs from your service providers and entrusting that they’ll deliver on their promises no matter what. There’s a lot of variables riding on that “no matter what”: power outages, system wide outages, natural disasters, or just plain equipment failure. The breadth of data storage required by a typical institution, multiplied by the storage required for backup protection, equates to a lot of disk space. Add to that the cost of hardware, maintenance, security and people resources needed to manage, operate and administer those servers and the total cost of ownership can be staggering.
And what happens if your failsafe measures, well, fail? The recent news of the Heartland Payment Systems data breach opened a lot of sleepy eyes to what a data breach or data loss truly costs an institution. According to the Ponemon Institute's Cost of Data Breach study, cited from BankInfoSecurity.com, the average cost of a data breach or loss was $202 per compromised record in 2008. This represents a 2.3 percent increase from 2007, when data breach/loss cost an average of $197 per record. The average total cost per reporting company was more than $6.6 million per breach, ranging from $613,000 to almost $32 million. The cost of lost business carried the highest impact, averaging $4.59 million, or $139 per record compromised. Lost business accounted for 69 percent of data breach or data loss costs.
Extend your protection
If one of your servers crashes, is it acceptable to wait for another server to be physically delivered, and for a network engineer to re-configure and recover data in order to resume functionality in a few hours to a few days? You may not specialize in IT, but we can all grasp the criticality of your systems to the livelihood of your institution.
New virtualization and systems recovery solutions can greatly extend the protection of your data backup and Critical Systems Management programs, allowing for quick and complete business resumption in the event of data loss or server failure. Servers can be virtualized with the same network settings in less than 30 minutes directly from a Network Area Storage (NAS) device, with complete backups every 15 minutes. If a server goes down, within minutes your team can select and deploy a point-in-time snapshot of your data – as recent as 15 minutes just before the failure event. A virtual server is completely transparent to end users allowing your employees to resume business as usual. Backups continue to occur after a server is virtualized so, when it comes time to restore back to physical hardware, you have the latest changes to your data. Backups can also be securely synchronized off-site for added redundancy and coverage.
In summary, systems recovery solutions utilizing virtualization technology allow for near immediate recovery of system failures, while lowering your total cost of storage and backup. Teamed with solid business continuity planning and testing, mobile branch recovery measures, hosted secure email and off-site data storage, virtualization is the final piece that ties together a truly comprehensive Business Continuity and Disaster Recovery strategy that minimizes risks, consolidates vendors, and lowers total cost of ownership, while delivering an improved competitive foothold for your institution.
Tom McInerney is vice president of client solutions for Compushare, Inc. He can be reached at 714-427-1018 or tmcinerney@compushare.com.
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