Survey: Wall Street looks to cloud technology for its next bailout

Can new technology initiatives help pull Wall Street out of the danger zone? A new survey released by IBM and Securities Industry and Financial Markets Association (SIFMA) finds that IT budgets are tight on Wall Street, but things are loosening up, and there's going to be plenty of demand for new technology initiatives in the near future as firms on the Street look to "transformational" solutions to help better manage risk.

Can new technology initiatives help pull Wall Street out of the danger zone? A new survey released by IBM and Securities Industry and Financial Markets Association (SIFMA) finds that IT budgets are tight on Wall Street, but things are loosening up, and there's going to be plenty of demand for new technology initiatives in the near future as firms on the Street look to "transformational" solutions to help better manage risk.

The survey of more than 350 Wall Street IT professionals found a "significant" increase in interest in new technologies and computing models, in particular cloud computing, as firms seek to overcome budgetary restrictions and skills shortages. Almost half of the respondents now see cloud computing as a disruptive force.

The past year has seen marked growth interest in cloud computing. The number of respondents predicting that cloud computing would force significant business change more than doubled (from 21% in 2008 to 46% in 2009), making it the top disruptive technology, ahead of operational risk modeling and mobile technologies.

Major initiatives underway at most Wall Street firms include enhancing electronic trading tools (69%), improving data capacity and bandwidth (58%), and improving technology framework and infrastructure (58%). It can be assumed that the last item includes SOA efforts.

Budgetary pressures may be beginning to subside: when questioned on their outlook for 2010, just 32 percent of respondents predicted further cuts, with 50 percent forecasting that their IT budgets would remain the same or increase. In fact, the major concerns among Wall Street IT departments have shifted from costs to skills availability.

In 2008, high implementation costs were the number one challenge, cited by 70 percent of respondents. This year saw concerns about limited IT staff take the top spot with 78 percent, up from 56 percent in 2008. The 2009 results show two more major jumps: the challenge of inadequate in-house technology moved from 21 percent to 39 percent, and concerns about governance and senior management rose 13 points to 38 percent.

The survey's authors say tight budgets and skills shortages are the main catalysts behind the growing interest in cloud computing.

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