Cloud Adoption Trends Within the Investment Management Industry

June 2012

Cloud Adoption Trends Survey

Study commissioned by Eze Castle Integration

Study conducted by IDG Research Services

Timeframe: March 29 to May 3, 2012

Audience: Hedge Funds & Investment Management Firms – Respondents were screened for employment at companies using

or planning to use the cloud for infrastructure or application services

125 senior-level individuals completed the survey

Respondent Profile: Investment Type

65%

16%

16%

4%

Type of Investment Organization

Investment Management Firms

Hedge Funds

Private Equity Firms

Fund-of-funds

Respondent Profile: Assets Under ManagementOver a 1/3 of organizations surveyed managed assets in excess of $1 billion

34%

21%

25%

15%

Total Assets Managed

$1B$500-$999.99M$100-$499MLess than $100M

Respondent Profile: Job Title

Other

CCO

CTO

VP/Director of Operations

VP/Director of IT

Managing Director/Partner

COO

CFO

IT Manager

11%

5%

7%

10%

11%

12%

14%

14%

16%

Job Title

Key FindingsAlmost 8 in 10 hedge funds and investment firms are currently using the cloud for at least some of their infrastructure or application needs

Majority of firms’ first cloud initiatives center on basic business or office functionality (i.e. email, file services, mobility, etc.)

Private cloud is preferred deployment method

Top five factors influencing decision to use cloud areo Reduce Costso Speed IT Deploymento Simplify ITo Resources On-Demando Built-in DR

Current Use of the Cloud

Of respondents, almost 8 in 10 are using the cloud for at least some of their IT infrastructure or application needs.

79%

21%

Use of Cloud for Infrastructure or Application Services

Currently using cloud services

Planning to use cloud services

Current Use of the CloudHow are firms currently using the cloud?

*Multiple responses accepted.

Other infrastructure or application services

Complete IT outsourcing

Financial application hosting

Basic business/office functionality

35%

22%

50%

65%

Entering the Cloud: First InitiativesRespondents were asked what was/is likely to be their organization’s first cloud initiative:– A majority (57%) either began their use of the cloud with basic business

or office functionality or are likely to do so– Very few outsourced or were likely to outsource their complete IT

infrastructure to the cloud

Complete IT infrastructure outsourcing to the cloud

Financial application hosting via the cloud

Use of the cloud for basic business/office functionality

9%

34%

57%

First Cloud Initiative

Cloud Deployment Models: Current UsersFor those using cloud, a private cloud is employed as part or all of the solution more than 70% of the time– One third of respondents are using a public cloud model– Just over a third are using a hybrid cloud model

Don't Know

Public Cloud

Hybrid Cloud

Private Cloud

7%

33%

37%

71%

Cloud Deployment Models: Future Users

Findings mirror current deployments – Private cloud is most likely to be incorporated as part of an organization’s cloud deployment– Public cloud remains the least likely

Don't Know

Public Cloud

Hybrid Cloud

Private Cloud

35%

23%

31%

46%

Factors Influencing Decision to Use Cloud

To enable global support of local and remote offices

To take advantage of built-in disaster recovery/business continuity features/functionality

To improve IT flexbility and scalability of on-demand resources

To simplify IT management and support

To increase the speed of technology deployment

To reduce IT infrastructure investments/costs (transfer from CapEx to OpEx)

75%

80%

82%

82%

83%

86%

15%

17%

12%

13%

11%

9%

10%

3%

6%

5%

6%

6%

Extremely important/important Somewhat important Not very/not at all important

Five factors were viewed as extremely important/important by at least 75% of respondents; Cost savings had the largest percentage of those who rated it an important or extremely important factor (86%)

Barriers to Cloud DeploymentWhile all respondents used the cloud, they did note the following as potential barriers to cloud deployments

Top Barriers1. Security of cloud computing – high significance to more than 7 in 10

respondents

2. Information governance or meeting regulatory or compliance requirements – high significance to more than 7 in 10 respondents

Lesser Barriers

Investor/clients not being receptive to cloud computing– 1 in 4 respondents felt that this was not a significant issue at all

Fear of outgrowing the cloud – 59% viewed as significant

Fear of vendor lock-in – 54% viewed as significant

Barriers to Cloud Deployment

Fear of vendor lock-in

Fear of outgrowing or overpaying in the cloud

Concern about lack of custom application availability or integration

Investors/clients are not receptive to cloud computing solutions

Concerns about information governance or meeting regulatory or compliance requirements

Concerns about the security of cloud computing solutions (i.e. risk of unauthorized access, data integrity, etc.)

54%

59%

61%

62%

71%

77%

28%

25%

26%

14%

17%

14%

18%

16%

13%

23%

12%

10%

Extremely significant/significant Somewhat significant Not very/not at all significant

Cloud Services Providers: Specific Measures

Maintain geographic reach with cloud that supports multiple continents

Offer attractive Service Level Agreements (SLAs) for application availability and service delivery

Provide technology that integrates with other parts of our infrastructure

Adopt industry standard frameworks

Offer better pricing models

Put stronger controls in place to help enforce compliance-related policies and issues

Incorporate security into the system development lifecycle

Implement monitoring and access control policies and procedures and provide security reporting/updates to customers/clients

Offer flexibility in terms of contracts (e.g. to help avoid vendor lock-in)

70%

75%

77%

78%

79%

79%

80%

82%

82%

17%

18%

18%

18%

17%

14%

14%

15%

11%

14%

6%

5%

3%

4%

7%

6%

3%

6%

Importance of Specific MeasuresTaken by Cloud Providers

Extremely important/important Somewhat important Not very/not at all important

Cloud Services Providers: Evaluation Criteria

Geographic reach/global support

Prior experience with the vendor

Innovative ideas, in-depth insight and expertise regarding cloud trends and direction

Certified application availability

Strength of Service Level Agreement (SLA)

Cloud provider's technology infrastructure

Knowledge of how my organization operates and experience in building and operating cloud environments in my vertical/industry

Proven post-sales support and service

Experience in establishing effective security policies and procedures in the cloud

Offers the most cost-effective model

70%

74%

78%

80%

81%

81%

81%

82%

82%

84%

21%

21%

16%

16%

16%

16%

14%

14%

14%

12%

10%

5%

6%

4%

3%

3%

6%

5%

4%

4%

Importance of Factors WhenEvaluating Cloud Services Providers

Extremely important/important Somewhat important Not very/not at all important

Eze Castle Integration Overview

Founded 1995

Headquarters

Additional Offices

260 Franklin Street, 12th Floor, Boston, Massachusetts, 02110

Chicago, Dallas, Geneva, Hong Kong, London, Los Angeles, Minneapolis, New York City, San Francisco, Singapore and Stamford

# of Employees 340

Core Services

• Strategic IT Consulting• Outsourced IT Solutions• Professional Services• Project & Technology Management• Communications Solutions• Network Design & Management• Internet Service

• Private Cloud Services• Business Continuity Planning• Disaster Recovery• Compliance Solutions• Storage Solutions• Colocation Services• E-Mail & IM Archiving

Awards Received

About Eze Private CloudEze Private Cloud is the premier fully managed global private cloud platform for the hedge fund and alternative investment industry

Spans two continents and supports 2,000+ users globally

Delivers broad portfolio of services via best of breed cloud platform

Over 30 applications running and more than 1 petabyte of data in Eze Private Cloud

260 Franklin Street, 12th floor Boston, MA 02110 Tel: 617-217-3000 www.eci.com