Automation at Goldman, The Computer takes out four people

Today, nearly 45 percent of trading is done electronically, according to Coalition, a U.K. firm that tracks the industry.

Pay:

Average compensation for staff in sales, trading, and research at the 12 largest global investment banks, of which Goldman is one, is $500,000 in salary and bonus, according to Coalition. Seventy-five percent of Wall Street compensation goes to these highly paid “front end” employees, says Amrit Shahani, head of research at Coalition… Investment bankers working on corporate mergers and acquisitions at large banks like Goldman make on average $700,000 a year, according to Coalition, and in a good year they can earn far more.

Automating those $700,000+ meat-sacks:

Goldman Sachs has already begun to automate currency trading, and has found consistently that four traders can be replaced by one computer engineer, Chavez said at the Harvard conference. Some 9,000 people, about one-third of Goldman’s staff, are computer engineers.

Finding the things to automate:

Though those “rainmakers” won’t be replaced entirely, Goldman has already mapped 146 distinct steps taken in any initial public offering of stock, and many are “begging to be automated,” he said.

To be all double-turns-out about the grim automation stuff, in theory, this could mean hiring more programmers and people who support those robots, bringing down those big chunks of cash from “rainmakers” and spreading it down to “lower” grade staff. Of, you know, the bank can just keep that money and trickle it up to execs and share-holders.

Source: As Goldman Embraces Automation, Even the Masters of the Universe Are Threatened

When to go private cloud

As represented with the star in the map above, according to CPI data, at labor efficiency of 1,000 VMs per engineer and 66% utilization, these enterprises are poised to beat public cloud on price regardless of whether they use a commercial orchestration software package, an OpenStack distribution or the OpenStack source.

And, on IaaS pricing:

But price still does matter: In a 451 Research custom study commissioned by Microsoft earlier this year, the biggest reason to change primary provider was price, cited by 34% of respondents. Consumers don’t necessarily want the cheapest cloud service, but they don’t want to feel ripped off. If there is a cheaper option elsewhere, it appears end users will take it into consideration.

Announcements on price cuts gather attention, and are a great publicity and discussion tool for service providers. We think cloud prices will continue to come down through 2017, and may spread beyond virtual machines into object storage, and perhaps even databases – virtual machines came down 7% globally in 2015, but the cost of our small application only came down 2.4%. The fact that margins are still healthy suggests providers aren’t sacrificing huge amounts of gross margin to give such cuts. If they are, it might be a few nickels and dimes here and there, but it’s more likely that they are reducing costs through better procurement and management. If we are in a cloud price war, we’ve yet to see it really get off the ground.

And, see more commentary on the topic of IaaS pricing.

Source: Cloud gross margins: The price war has yet to really kick off

Cloud Platform Adoption: Lessons Learned — Philip Glebow, Gap

Gap’s Philip Glebow goes over their use of Pivotal Cloud Foundry, including things that worked well and need improvement. His list of the supporting tools they use – like APM and data virtualization – is handy as well.

Some items:

  • (~2:30) Fast deploys: “We can deploy changes faster than people can really consume them.”
  • (~18:00) Developer morale: “We could really push something in five minutes… and developers love it, you click the commit button and there you go.”
  • (~19:40) [Poor transcription by me] On the danger of changing too fast: …generally we want to have a little bit of control into what goes into that production environment… but we don’t want to change so rapidly so that users are confused… There’s also a little bit of cultural change that we need to go through… ((too rapid of change is jarring)) …and as we bring that capability forward, we want to be sensitive to those concerns.
  • (~23:58) Overview of their pipeline and testing.
    (~26:29) [Poor transcription by me]  Typically we’ve organized out teams around sort of domain concepts – so we have a pricing team – then there’s several squads, then that squad is responsible for optimization – price, packing the stuff, etc. That’s how we’ve organized the teams, two pizza teams, we’ve tried to that. Also, distributed teams… sometimes that’s a little bit complicated.

Allianz now deploying to production in minutes

By changing its development practices and investing in a private cloud platform as a service, there have been clear benefits to the business. “Historically it would take two or three days for a deployment to go to production, with lots of manual production. Now with the apps in the garages we can do it on the basis of Cloud Foundry within minutes.”

Source: Allianz app deployment goes from ‘days to minutes’ with PaaS and agile practices

Making decisions quicker with failure

It’s okay to get things wrong and it’s okay to change our minds. If we’re strong enough to admit that we got it wrong, we can learn and adapt. If we accept that it’s okay to change our minds, we end up delivering something quicker as we made a decision based on the information at that time.

—Emma Hammond, Fidelity International

Source: Top 100 Quotes from the Cloud Foundry Summit Europe 2016, Altoros

Singapore’s DBS Bank selects Pivotal Cloud Foundry

According to the bank, the built-in automation of Pivotal’s cloud platform allows it to focus on delivering differentiated value, instead of being caught up with systems management and IT resource procurement. This means that DBS will be able to quickly deliver services, as well as build and update next-generation applications in order to deliver a better banking experience to users.

Another Pivotal Cloud Foundry customers. Banks seem to like it.

Source: CIO-Asia – DBS Bank leverages Pivotal to innovate at start-up speed

Lead IT Cultural Change and Transformation in CSPs Through the Adoption of DevOps (Gartner Report)

For Orange France, the trick to incentivizing the team members was to show very clearly what the return on investment of their effort was. Who isn’t happy to continue working when projects are delivered on average six times faster than with a waterfall approach?

See more in the report.

Will OpenStack, Kubernetes, Or Mesos Control Future Clusters?

“When Apple moved to bare metal with Mesos, one of the big reasons why they did it was, first, they did not need the virtual machines and, second, they got a big performance improvement. The virtualization tax that we often talk about is very real and for Apple it was on the order of 30 percent. Removing it meant Apple could run Siri jobs 30 percent faster, which is a really big deal.”

Will OpenStack, Kubernetes, Or Mesos Control Future Clusters?