Poland s Storage market on the rise - Bitpipedocs.media.bitpipe.com/io_10x/io_102267/item_1017900/Poland Sto… · between new and existing facilities, the analyst company’s report

Poland’s Storage market on the rise

Whats causing the market to flourish?

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Polish enterprises speed apps with flash and hybrid flash storage

What's causing Poland's datacentre market to flourish?

Cloud storage makes steady progress in Poland

Poland’s financial services sector weighs cloud’s risks and rewards


Krzysztof Polak

In recent years the performance of processors, memory and networks

has grown several times faster than that of spinning disk HDDs. Because of this, s Poland’s financial services sector weighs cloud’s risks and rewardsome enterprise applications suffer when access to mechanical disk creates bottlenecks that slow down I/O operations. This applies especially to databases, analytical applications and systems capable of running simulations.

This has resulted in the rise in use of low-latency flash storage, in all-flash arrays as well as alongside spinning disk

in hybrid flash arrays. But, for many in Poland, flash is still a long way off – because it is seen as a very expensive storage option.

“Price per GB overshadows the idea of price per I/O among IT managers in Poland,” says Jaroslaw Smolski, research manager at IDC Poland.

“There are a lot of cases where integrators offer flash, but are unable to convince customers the effect will be a much faster application performance compared to spinning disk.”

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Performance challenges cost

But new technologies and applications that require much faster and more frequent operations per second have forced some companies to migrate to flash storage systems. “Flash offers much higher performance and consumes much less energy,” says Grzegorz Dobrowolski, datacentre and virtualisation

director at Cisco Systems Poland. “On the other hand, the cost per 1GB of capacity is 13 to 14 times higher than HDD and thus a barrier that inhibits its implementation. Price often closes down technical arguments, because customers are looking simply for cheaper products.” For high-end datacentre operators, however, all-flash arrays are most certainly on the agenda. One such organisation is IBM Poland, which uses all-flash arrays in its datacentre at Blonie, 30km west of Warsaw. “IBM FlashSystem all-flash arrays are a response to serious business

challenges,” says Piotr Biskupski, flash system technical leader at IBM Poland. “In particular, they ensure high availability of applications and data, guarantee minimum delays and enable business 24/7.” The largest datacentres in Poland have used flash since its inception. “All-flash arrays and flash in servers have become standard equipment at Comarch Data Center locations,” says Wojciech Sobczak, IT specialist at datacentre service provider Comarch Data Center. “We also use hybrid flash arrays with automatic tiering between HDDs

and SSDs. The undeniable advantage of using hybrid flash storage is lower cost, compared with all-flash arrays.” To save costs, Comarch builds its own all-flash storage systems, based on commercially available commodity hardware. In this way, the company builds storage systems tailored to the needs of its customers.

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“We recently built a matrix with a performance peaking 2.1 million IOPS for random records, using an 8KB data block size,” says Sobczak.

Data analysis crucial to the business

Pepco is another Polish operation that has opted for all-flash. It is a rapidly growing clothing and housewares retailer, which had more than

500 stores in Poland in 2013. Available transactional data for the central data warehouse is crucial for Pepco's operations. The data warehouse is the source of all reports for individual outlets and the head office – and most operational decisions are made on its analysis. “Performance of the data warehouse has a crucial impact for our business. It is much more important than the performance of the ERP system,” says Marcin Okraska, IT director at Pepco Poland. To speed data warehousing operations, Pepco has deployed IBM's all-flash storage alongside disk.

“With flash we have obtained the required performance, capacity and high scalability we need. Everything is closed in a box of 20TB in a single rack. Using flash systems means the average I/O load on Pepco's data warehouse storage has dropped 40%,” says Okraska. Similar needs have prompted insurance company Generali Poland to modernise its EMC storage systems by adding flash. The main driver has been the need to streamline and automate reporting processes. The company decided to create a common, reliable source of management information, with an aim to shorten data collection,

processing and analysis times.

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Limitations of disk array

Tomasz Kalinowski, IT architect at Generali Poland, says: “Until recently, the only way to increase the performance of disk arrays was to add hard disks one after another, all configured in a Raid group.” “But, we ended up with an array configuration that still was not efficient enough for the required I/O parameters. By continuously

adding HDDs, there was more and more unused space on servers – even tiering hot and cold data was of little help.” The answer for Generali was hybrid flash with solid state drives and PCIe flash combined using storage tiering, allowing Generali to achieve the required balance between capacity and performance. Hybrid flash storage systems – traditional disk arrays strengthened by some flash drives – do better than all-flash arrays in sales terms in Poland. Not all enterprise workloads need pure flash arrays, and in such situations the partial use of flash in hybrid arrays better balances expenditure and business needs.

“With proper management of virtual pools, frequently used data can be handled by flash drives that significantly speed up the databases. In other cases, the performance of flash can be provided by PCIe flash cards, to accelerate access to hot data,” says IDC’s Smolski. Cisco’s Dobrowolski agrees: “Although the cost of flash still makes it uneconomical to switch over completely for most users – especially in the SME sector – the use of a small percentage of flash drives alongside spinning disk is becoming a storage standard,” he says.

Flash futures in Poland

In Poland, flash storage has been around in some form or another for many years – but only in the last few years has it been widely adopted.

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“Today it’s impossible to realise a new storage project without using flash,” says Jarosław Dabrowski, technology director at gaming market technology provider Gtech Poland. “Along with virtualisation, cloud and software-defined, flash is one of those things right now that needs to be seriously considered by IT managers during any pre-deployment phase.”

IBM’s Biskupski says: “The attraction of flash is pretty apparent: Performance, compactness, reliability, and low power and space consumption.” IDC predicts that, by 2016, flash will have a 40% market share of hard drives shipped in central and Eastern Europe.

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What's causing Poland's datacentre market to flourish? Krzysztof Polak

The Polish datacentre market, although still in its early phases of development, is worth more than 1bn Polish zloty (£188m) – about a 15% increase from 2012. Every year, between 4,000 and 7,000 square metres of new space for datacentres is put to use in Poland. Opening of new facilities brings investors the expected return on investment relatively quickly because of quick uptakes. This generates pure income for service providers, according to The datacentre market in Poland 2014 report by IT analyst firm PMR Poland.

In the past five years, the value of basic services offered by datacentres has increased by more than 200%. Its development has been up by at least 20% year-on-year, and has been resistant to the effects of the global financial crisis, according to the head of IT market analyses at PMR

Poland Pawel Olszynka. He estimates in 2014, and the following three years, the growth rate of the datacentre market will remain similar. According to PMR, datacentre services is one of the most promising segments of the entire IT sector in Poland. In recent years, new investments for datacentre constructions have been noticeably linked to technology parks and special economic zones – places where the legislature creates more attractive business conditions, especially in terms of taxes, but also provide businesses with highly resilient datacentre infrastructure and low latency.

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Branch investors can also count on financial support from the funds of the European Union budget, which improves efficiency, reduces the pay-back period and increases competition in the market between new and existing facilities, the analyst company’s report suggests. “Datacentres are growing in Poland like buns on yeast,” says Olszynka. "ATM S.A, the leading datacentre design and building company in Poland, reflects this trend.”

Market leader expanding datacentre capacity

In 2013, ATM recorded an increase in revenues from its co-location and hosting services by 17 %, compared with 2012. At the end of 2013, ATM’s share in the Polish market for datacentre services stood at 11%. The company sells its services under two brands: Atman and Thinx. Chief executive at ATM Maciej Krzyzanowski says while the company has been providing datacentre services for almost 15 years, 2013 – the year it achieved its best financial results to date – was the most special. "The demand for datacentre services is growing exponentially as enterprises look to invest in IT to maintain their competitive edge," he says. “That is why we are investing in new datacentres where we offer colocation services.” ATM has increased its investments across all areas of datacentres – from individual server (1U), through to the server racks, dedicated servers and the dedicated server rooms for large customers who want private cloud-like co-location service. In June 2014, ATM launched its newest datacentre – F4 – in Warsaw, which expanded its existing functioning facility there, the Atman Data Center, by about 1,000 square metres.

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“We are confident full occupation of the new datacentre space will be fast,” says Krzyzanowski. The company has already signed one long-term contract with a financial services player. The customer will occupy one quarter of the total colocation space available in the F4 building. Krzyzanowski says advanced-stage negotiations are under way with other potential enterprise customers. “We are already building another datacentre. That datacentre facility will be ready by mid-2015 when the F4 facility will run out of space," he says. Apart from large native companies, ATM is seeing interest from foreign enterprises as well. Krzyzanowski stresses the company’s high-quality, resilient datacentre services at modest prices is pulling enterprises from neighbouring European countries. Additionally, ATM is also attracting attention from small and medium-sized enterprises (SMEs) who want access to high-end compute infrastructure but do not have the budget or expertise to build one in-house. Polish SMEs adopting hosting and colocation services is also evident in the soaring revenues from ATM’s dedicated servers lease. It recorded a 190% increase in sales of its Atman EcoSerwer servers in 2013.

Poland forms a fifth of the Central and Eastern European

market

In terms of space available for clients in datacentres, Poland is the second largest market – after Russia – in central and Eastern Europe, according to the findings of PMR Research, a global consulting company. The participation of Polish datacentres in this market is estimated at more than 20%.

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But what’s behind the success of Poland’s datacentre economy? The country’s network architecture, stable politics, standard energy prices, economic conditions and shifts in IT are all facilitating the growth of datacentres here. Its progress is also promoted by an association for all market players. Data Center Alliance (DCA) aims to increase the potential of datacentres and to achieve synergies in businesses. The first members of the union were Netia, Polcom, CK Zeto and Beyond.pl. Director of product development at Netia Pawel Mazurek says the DCA works together so customers can choose the most convenient location for their IT infrastructure. "We all also offer high-speed transfer of data and datacentre services, advanced configurations services, and disaster recovery or backup datacentre services. “The strength the market offers is improved by establishing a synergy in business with other similar players and that’s why we joined the alliance,” he says. Another reason for its success is the value it provides to enterprise customers. “A datacentre service should be attractive to the users, not only in terms of price, but also in terms of available services,” says business development executive for financial services at IBM Poland Grzegorz Kuliszewski. In 2013, IBM launched 1,250 square metres of new datacentre space in Blonie, 30km west of Warsaw. “It is important to offer services that go far beyond those available in a typical infrastructure as a service (IaaS) – such as automation, open interface, platform services and so on” says Kuliszewski. “But this is

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not an easy task, especially from an economic point of view, for the datacentre providers.” Cosset said while there are going to be a lot of legislative changes in Europe, the US and Asia, as long as retailers are absolutely transparent with the capturing of consumer data they can’t do wrong. But he said retailers need to articulate “more than once in very large capital letters, as opposed to at the bottom of a 150-page document” to be transparent with consumers. Customers also need to understand the value exchange and the relationship they’re entering into with a retailer, Cosset warned. “We refer to consumers as snowflakes – it's very easy to see this big plain of white snow on the ground, but in reality every single element of that layer is different. Engaging each consumer differently is critical,” he said. Legislation aside, Cosset also warned what may be acceptable and non-intrusive ways to gather consumer data in one culture, may be unacceptable in another. “What may be considered valuable in the US, may not be valuable in Italy or Brazil,” he said. “In the same way as what may be considered extremely sensitive in different countries.” Speaking at a roundtable press event at Oracle’s user conference in San Francisco, Cosset said he had been talking to a group of French executives who had raised the issue of privacy.

Co-operation with datacentre and choice of supplier

Datacentre customer Provident Poland, which has been using datacentre services from GTS Poland, advises enterprises some of the key challenges in colocation adoption is selecting the right service provider and developing a co-operative relation with the provider.

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In 2013, GTS completed the work on expanding the corporate wide-area network (WAN), connecting 150 branches of home credit business International Personal Finance (IPF) in five European countries: Poland (Provident is the Polish branch of this corporation), the Czech Republic, Slovakia, Hungary and Romania. The biggest changes occurred in Poland. Director of IT at Provident Michal Stadryniak says reconstruction of the corporate network was neccessary because of the need for centralising applications that support its business in Europe. "Its effects were increased technological capacity of the network, ensuring branches in different countries can access data stored in the central datacentre,” he says. But because it involved the service provider in the project from the start, it was easy for GTS to build a new basic network and help the company use a previously existing network as backup infrastructure. Lack of co-operation with datacentre providers results in disappointment because of increased cost, instead of expected savings. In such a situation the cost tends to be far higher than planned, warn experts. Business development manager at software house Comarch Jacek Slowik argues the selection of datacentre services provider should be a priority for the customer. “Otherwise, there is a risk the contract will be a source of problems for both parties involved,” he says. How can such a scenario be avoided? Datacentres operators – including ATM, Comarch, IBM, Integrated Solution, GTS – advise when a company chooses the place for storing its data it should consider the reputation of the service provider and the quality of services offered.

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“It is important to analyse carefully the contract terms and check where the liability of the provider ends and where the user’s begins,” says Slowik.

Managing failure – backup and disaster recovery services

Reliable datacentre providers will offer strong backup and disaster recovery services and that’s what users must look for, service providers advise. “In a case of an unexpected failure, they recover data in a way unnoticeable to the consumer. All figures are in fact replicated between the two datacentres and saved in copies,” Slowik says. “Unfortunately, a customer can find unreliable providers,” says director of datacentre and virtualisation at Cisco Systems Poland Grzegorz Dobrowolski. The customer exposes itself to the risk of financial loss when it does not carefully protect its interests in a contract with an external operator, he warns. Popular Polish web brands – such as Media Markt, NaTemat.pl, e-lawyer, Oferia, Allegro, e24cloud.com and PayU.pl – experienced this in 2012 when their web services faced outages as datacentre provider Beyond.pl did not have robust disaster-recovery strategies. Mitigating risks helps enterprises spread the word about third-party datacentres which then flourish, experts conclude.

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Cloud storage makes steady progress in Poland Krzysztof Polak

Public cloud services arouse suspicion in Poland. The thinking persists that your own servers or datacentre are the best places to store your data.

But that picture is slowly changing and cloud storage is recognised by some as a method that can cut costs and help improve customer service.

More than half (55%) of the largest Polish companies do not process data in the cloud and 40% of them do not plan to migrate to the cloud, according to research by analyst company Audytel.

The dominant concerns are that the move to cloud storage is a big step that surrenders control and security of data to a third party.

“Caution is often a far stronger motivation than the desire to make changes, even if there is the promise of a reduction in investment costs,” says Grzegorz Bernatek, head of analytical projects at Audytel.

Piotr Pietrzak, chief technology officer at IBM Poland, agrees: “Companies are particularly worried about the security of their data, including personal data. They are afraid of big risks lurking in the contract, dependence on the service provider and the lack of control over data that is transferred outside their organisation.”

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The use of the public cloud is very limited in Poland, according to Audytel’s report, Data processing in the cloud in the largest Polish organisations. The predominant model is private cloud, with 75% of respondents indicating its use in their organisations.

Unlike the public cloud, private infrastructure means the user company is responsible for the operation of all key aspects of the cloud: Infrastructure, hardware, server room, implementation and integration services, as well as administration and management of the cloud.

Cloud for primary data

Despite concerns, the number of companies that transfer data to the cloud is increasing every month, according to the Audytel report. In many cases the motivation arises from a need to serve customers more effectively.

It was a desire to serve customers better that prompted Fotosik.pl, an image-hosting website owned by Warsaw-based Digital Avenue, to transfer all data and IT infrastructure to the cloud.

The migration project was a joint endeavour between Fotosik.pl and Oktawave, an infrastructure-as-a-service (IaaS) platform provider that is part of the K2 Group, a Polish media agency.

Fotosik.pl is a web service for storing and sharing image and video files on the internet. It has hundreds of thousands of users who upload photos and videos.

Maintaining smooth web operations with a large in-house infrastructure and high volumes of data, mostly primary customer data, requires large financial outlays. The company sought to reduce costs, but maintaining its own IT architecture became increasingly difficult as the infrastructure continuously required new investments and the systematic addition of extra file servers.

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“At some point it became obvious that we needed to make the change *to public cloud+,” says Piotr Bochenczak, CEO of Digital Avenue. “Further investment in more scattered small data servers does not make sense for financial reasons. Therefore, with no hesitation we decided to migrate to the cloud.”

To store all Fotosik.pl’s original data, Oktawave cloud storage was used. Currently it totals about 65 million files, but there is capacity for several times that amount if needed.

As in most such cases, the two biggest benefits of migration are cost savings and increased speed of service to the user.

With the possibility to run any size infrastructure on demand and a setup that allows employees more time for conceptual work, Digital Avenue is now working on improving the existing functionality of Fotosik.pl while preparing a new cloud storage website for professional photographers, as well as those who use hosting services for business purposes, such as auctions.

“With the old solutions we were forced to pay fixed rates for servers. Now we pay for the resources we actually use, so at night, when our users are asleep and don’t use our infrastructure, we pay less,” says Bochenczak.

Cloud archive at InsErt

InsErt is the largest Polish producer of management software for small and medium-sized enterprises in terms of number of licences sold (more than 460,000). Its offer includes systems that provide insight into a company’s sales, warehouse, accounting/finance and HR systems.

Until recently its products ran at customer premises on their own servers, desktops and local network and InsErt software was updated via CDs sent to customers as a part of a paid subscription.

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The migration to an upgrade process through the cloud occurred in 2013, says Aleksander Greinert, InsErt deputy director of sales.

“We decided to make this step because the existing form of update was inadequate for some of our customers, and expensive. Our main goal was to streamline the process of distribution of updates to our customers and to facilitate access to changes immediately after new versions were released,” he says.

To create its new solution, InsErt used the Microsoft Azure cloud platform. It was a challenge because Azure was a new technology for InsErt and the company had to learn a lot about its features.

The result has been that more than 20,000 InsErt customers now receive automatic updates from the cloud. The next step was for InsErt to extend the use of the cloud to offer its customers remote backup and archiving services.

“When introducing the automatic update tool, we got to know cloud technology, its features and the payment model. Through this experience we learned that the cloud platform improves our business,” says InsErt's Aleksander Greinert.

“We decided, as a producer of programs in which data is collected, that we should provide our customers with a solution that, on the one hand, ensures a high level of data security, and on the other hand gives them a quick way to restore archived data, ensuring business continuity."

In partnership with Microsoft the company developed e–Archiving, an archiving cloud service. It is also a method of protecting against data loss due to hardware failure, accidental deletion of files, theft or unauthorised access. This cloud service also provides data protection against internet threats such as viruses and spyware.

“There is considerable interest from our customers in cloud storage services. It confirms that the decision to use cloud computing in

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backup and archiving was correct. Currently, a project to create our own cloud would not have any business justification. In contrast, the pricing model and scalability of the cloud services available on external platforms enable us to develop our business,” says Greinert.

Cloud backup and data management

BP is one of the largest petrochemical companies in the world. In Poland, it operates more than 450 fuel stations and shops with more than 3,000 employees.

In 2010 BP in Poland began to use cloud–based services for backup and to exchange and share data.

Data processed - names, addresses, products bought and sold, point of sale location, invoice and receipt data, etc - is collected at BP petrol stations and held in iBard24’s System Backup Online provided by iComarch24, a subsidiary of Comarch, one of the largest IT integrators in Poland, based in Krakow.

Data management, exchange and archiving in the cloud was launched after deployment of a special application on the PCs of BP Poland employees, says Slawomir Przybyl, application manager at BP Europa SE.

Now BP employees can quickly send and receive files in any format, with the cloud–based service accelerating the exchange of information between BP Poland headquarter, dealers, and points of sale.

“iBard24 makes the flow of information in the BP network possible on a 24/7/365 basis. It is also a fast, secure and automated process,” says Przybyl.

In 2013 BP cooperation with the provider went a stage further. The original cloud service was expanded by adding Comarch’s Business Intelligence Master Data Management.

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This is a cloud service that includes data cleansing. It ensures data standards and quality, prevents excessive proliferation of the cloud database and analyses data according to criteria chosen by authorised users. The new system integrates the data of 65,000 customers with their 93,000 registered vehicles and supports more than 450 BP fuel stations in Poland.

“We achieved centralised access to our structured data and that meant it could be easily analysed to obtain business advantage. An additional benefit is the elimination of unnecessary input of customer data during daily work at each location. Information entered once at any BP fuel station is available to all units of BP Poland, which results in better customer service,” says Przybyl.

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Poland’s financial services sector weighs cloud’s risks and rewards Krzysztof Polak

Banks and financial services enterprises in Poland considering cloud services are split between strict regulations and security concerns on one hand, and cloud’s benefits and reach in other sectors.

Global finance has been in crisis for several years. In Poland, however, the situation is quite different – the financial sector has noted higher profits than others. In recent years, the profitability ratio for institutions in this sector (net profit in relation to invested equity) varied from 13% to over 20%, according to data from the National Bank of Poland. Meanwhile, the average profitability for a company in Poland is only 8%.

Not surprisingly, cloud service providers consider Poland’s financial sector players as the most likely customers. Their offer is indeed taken into account by the banks, but with caution and deep introspection.

While cloud’s scalability and high compute capacity has been touted as beneficial for the financial sector, there is still a high level of distrust about cloud services in banks and financial institutions in Poland, says Adam Tymofiejewicz, director of consulting at Comarch, one of the two largest IT integrators in Poland.

What is limiting wide-scale cloud adoption in Poland?

Cloud helps to reduce total cost of investment and facilitates the use of IT infrastructure at scale, says Dariusz Kowalski, hosting manager at Home.pl, the hosting company that provides cloud services too.

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But financial services enterprises are one of the most demanding IT customers. They usually want 24/7 technical assistance from the cloud service providers, and a high level of security and availability, Kowalski says.

Financial institutions also insist that their cloud services provider holds the appropriate certificates and complies with the framework outlined by the financial regulatory authorities.

Banks and insurance companies have some non-technical requirements in their wish list too, says Kowalski. They want the cloud provider to be an established, trusted player with experience in the market. “Banks rarely decide to entrust their data to players of unknown reputation and operating in a non–transparent way,” Kowalski adds.

Banks’ cautious approach to the cloud is the result of the regulations that are special, formal and more rigorous than other industries.

At the beginning of 2013, Polish Financial Supervision Authority (PFSA) issued “Recommendation D”, which increases the requirements for “managing risks associated with IT and telecommunication systems used by banks”. Banks in Poland are required to deploy advice contained therein until the end of 2014.

The purpose of “Recommendation D” is to ensure that procedures at banks meet information technology standards – Code of ITIL (Information Technology Infrastructure Library), standards of group 27000, COBIT (Control Objectives for Information and Related Technology) or ISO 22301.

Although “Recommendation D” does not have the status of a legal norm – it is merely advice – the banks cannot afford to ignore it. Failure to implement "Recommendation D" or its partial introduction can cause real losses, PFSA warns.

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“Among the risks are IT systems failures, decreased resistance for outside attacks and improper actions of a mechanism to inform the management about current challenges that should be faced by bank,” says Dariusz Stefaniuk, project manager at Baker Tilly International, a consulting company.

For the second year in a row, banks’ CIOs devise their IT strategies around “Recommendation D” to please the board of directors. As a side effect, there is a weakened interest in implementing a cloud-based infrastructure.

But banks are far from steering clear of the cloud because of its rising dominance within other segments such as retail, small and medium enterprises (SMEs) and the tech sector.

Despite caution and regulatory requirements, some enterprises within the banking sector have taken their first steps into cloud and are yielding its benefits.

Poland still lacks special law on cloud computing. But it can be argued that the current law is not an obstacle for cloud deployment, even within the banking and financial segment. It may be considered even favourable to cloud services, but on the condition that the use of IT outsourcing improves the quality and effectiveness of banking services.

Banks deploying cloud services have already met requirements of the “Recommendation B” issued by PFSA in 1997. “This document recommends reduction of fixed assets and at the same time, investing in improvement of service quality, which is consistent with the basic principles of cloud computing,” says Robert Kobylanski, chief executive of CK ZETO, a subsidiary of Asseco, the largest IT company in Poland.

Kobylanski estimates that more activities of banks will be supported by cloud-based solutions in near future. It is difficult not to agree with such a forecast, especially because it is also supported by official data

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and the predictions of ICT market experts who are buoyant about cloud adoption in Poland.

In 2012, cloud computing services were used by around 7% of companies in the financial services sector – according to the Central Statistical Office of Poland report “Information Society in Poland 2009-2013”.

By 2015, the savings of financial sector in central and eastern Europe will reach €183bn. It will be caused by data processing systems in the cloud – predict analysts of the Centre for Economics and Business Research in London.

How cloud is seeping into Polish banks’ IT architecture

Based on previous experience in implementing an IT cloud model in Poland, Kobylanski argues that the transformation of IT systems in financial institutions begins with the spreading of infrastructure as a service (IaaS) and platform as a service (PaaS).

“Why? From the user point of view, the biggest advantage of cloud services is an immediate, non-investment access to computing power – server resources, applications systems, virtualisation, storage resources, disk arrays, backup and archiving,” Kobylanski says.

IT resources in the cloud enable IT specialists within banks to use rented compute power that, at the same time, complies with the standards, emphasises Kobylanski.

A good example of it can be found in the work of developers during cloud systems testing and improving, he points out.

With the increase of trust in security of cloud services for banks and decrease in prices, more advanced banking functions will be processed in the cloud, experts say.

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Dariusz Wichniewicz, director of telecommunications services at ATM, the company running the largest datacentres in Poland, agrees with Kobylanski.

Financial institutions, including banks, for several reasons, prefer a private cloud, although it requires more financing than public cloud. However, it gives greater control over the data. In this model, banks do not have to share resources with other customers of the cloud, which gives greater comfort and safety, says Wichniewicz.

The Polish market of banking applications available in the cloud is getting more interesting, says Radoslaw Maczynski, vice-president of DomData, an IT company. He adds that in addition to universal tools such as office suites, DMS (Document Management Systems) and solutions to create and manage backups, now providers even offer tools to support typical banking processes, for example, servicing debt collection.

Small and medium-sized financial institutions lead the way

Currently, there are 129 small and medium-sized cooperative banks that derive the greatest benefits of the cloud. While the large commercial banks are still considering the use of cloud computing, cooperative banks have been using the benefits of cloud computing for several years. Every month, 2.5 million banking transactions in this vertical are processed in the cloud.

“We believe in cloud computing model, as it is financially attractive for us. It enables us to apply the most modern IT solutions, which we could not afford if we were to use traditional approach such as an in-house IT,” says Eugenia Pokorska–Sawczuk, chief executive of the Cooperative Bank in Tczew.

“Today, because of the cloud, our competitiveness is growing, and with it the ability to attract new customers,” says Pokorska–Sawczuk.

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The footsteps of small institutions follow the big banks. These, although recognising the advantages of cloud services, need to have much more time and money for implementation and require a culture change.

Bank for Environmental Protection (BOS – Bank Ochrony Srodowiska) moved its entire communication infrastructure to the cloud in 2012. Integrated Solutions, a subsidiary of Orange, one of the four largest mobile network operators in Poland, implemented Unified Communications as a Service (UCaaS) at BOS.

Today, nearly two thousand employees of the bank, in its headquarter and in local offices, use wired and mobile telephony, conferencing systems, communication devices and tools served from the cloud.

“UCaaS helps us not to worry about investing in expensive hardware and software. Thanks to pay-as-you-go and pay-as-you-use models, we pay only for these IT resources that we actually use,” says Adam Grzbieluch, vice-president of BOS.

“The transfer of care for network and telecommunications equipment to outside specialists is not only a source of savings. This is the first step to all further improvements in the area of technological solutions quality, optimising the cost of services and better management of IT staff in our bank.”

The first bank in the cloud

Idea Bank, subsidiary of Getin Bank, specialises in serving small businesses. It is the first bank in Poland that decided to implement a model of banking services that is fully provided in the cloud (Idea Cloud). This project is being implemented in cooperation with Efigence, widely unknown IT developer for the financial institutions. Start of this cloud bank is announced for the end of September this year.

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“I expect Idea Cloud will gain 100,000 to 150,000 thousand clients during the first year of operation , says Jaroslaw Augustyniak, CEO of the bank.

Users of Idea Cloud will be able to issue invoices, declare and pay taxes, make business payments, monitor receivables, take loans and others.

“Idea Cloud is an intelligent system that remembers everything that a busy entrepreneur can forget. The system automatically builds a history of relationships with customers and partners, helps to forecast cash flows of a business. It also includes a virtual safe with encrypted access, dedicated to all types of electronic data,” says Jakub Wojciechowski, project manager of Idea Cloud.

In the next three to five years, technological innovations in the banking sector will be closely linked to the implementation of the cloud solutions, predicts Augustyniak.

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