The most inspiring talk at today’s Buy-Side Technology Summit was one hedge fund manager’s passionate appeal to get rid of all IT staff, a comment that generally did not go well with the predominantly tech-focused crowd. Simon Hazlitt, cofounder of Majedie Asset Management argued that there\u2019s no reason for funds to waste money employing technologists; there’s no reason to maintain cumbersome infrastructure and proprietary systems when it\u2019s so much cheaper and often more efficient to go to the cloud. In Simon\u2019s paraphrased words, IT integrated with business doesn\u2019t work, the majority of project costs are attributed to monitoring project costs, and really, all projects are \u201crubbish.\u201d<\/p>\n\n\n\n
For those unawares, cloud computing effectively refers to outsourcing computer resources to a third party. For example, rather than storing files on your computer, you could store files on the cloud (via a service like DropBox<\/a>, or Apple’s just announced iCloud<\/a>), and then those files become accessible from anywhere with an Internet connection. Even if your computer breaks, the files will still be available. The cloud is (almost) always available, and easily scalable. For more details, see Wikipedia<\/a>.<\/p>\n\n\n\n Surprisingly, the follow-up panel, which consisted of professionals from across the industry, rather than fighting back in defense of high tech in financial services, sort of agreed: albeit much more slowly at bigger firms, the move to the cloud is happening. Why spend money managing an internal messaging infrastructure when you can move to gmail, for example? (NYU recently migrated all of their collaborative systems, including email to Google.) Following the argument to a natural extreme, why build a proprietary trading system<\/a>, when you can use a vendor platform running on the cloud?<\/p>\n\n\n\n Though Hazlitt made an interesting point on delocalization, that cloud computing is a natural extension, of the suburbanization, created by the proliferation, of automobiles from the 1960s\u2026 in my view, \u201ccloud computing\u201d here can generally be synonymous with \u201coutsourcing.\u201d My outsource argument, which Hazlitt would likely agree with, is based on the argument of division of labor and economic interdependence.\u00a0 In most cases, I’d bet there’s no real need for financial services to employ a full IT staff (as a technologist in financial services, it’s ok that I say this, right?<\/a>) – financial services could focus on investment decisions, and engineers at vendor firms could specialize in building domain-specific applications.\u00a0<\/p>\n\n\n\n Specialization in this case would lead to economies of scale, lower costs, and I think quite likely more innovation. Yes, there are arguments against this idea, such as the need for very detailed firm-specific application customizations, for people to translate business requirements to vendors, to configure things, or the occasional need for proprietary technological logic (such as statistical arbitrage algorithm implementations); however, you wouldn\u2019t expect a dentist to build his own dental equipment… Anyways, I digress…<\/p>\n\n\n\n The most inspiring talk at today’s Buy-Side Technology Summit was one hedge fund manager’s passionate appeal to get rid of all IT staff, a comment that generally did not go…<\/p>\n","protected":false},"author":1,"featured_media":1738,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[149],"tags":[],"powerkit_post_featured":[],"class_list":{"0":"post-356","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-finance-trading"},"jetpack_featured_media_url":"https:\/\/i0.wp.com\/www.craigperler.com\/blog\/wp-content\/uploads\/2011\/10\/pexels-photo-1677710.jpeg?fit=1880%2C1253&ssl=1","jetpack_shortlink":"https:\/\/wp.me\/p1SwZ6-5K","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.craigperler.com\/blog\/wp-json\/wp\/v2\/posts\/356","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.craigperler.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.craigperler.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.craigperler.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.craigperler.com\/blog\/wp-json\/wp\/v2\/comments?post=356"}],"version-history":[{"count":4,"href":"https:\/\/www.craigperler.com\/blog\/wp-json\/wp\/v2\/posts\/356\/revisions"}],"predecessor-version":[{"id":1739,"href":"https:\/\/www.craigperler.com\/blog\/wp-json\/wp\/v2\/posts\/356\/revisions\/1739"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.craigperler.com\/blog\/wp-json\/wp\/v2\/media\/1738"}],"wp:attachment":[{"href":"https:\/\/www.craigperler.com\/blog\/wp-json\/wp\/v2\/media?parent=356"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.craigperler.com\/blog\/wp-json\/wp\/v2\/categories?post=356"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.craigperler.com\/blog\/wp-json\/wp\/v2\/tags?post=356"},{"taxonomy":"powerkit_post_featured","embeddable":true,"href":"https:\/\/www.craigperler.com\/blog\/wp-json\/wp\/v2\/powerkit_post_featured?post=356"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Specialize<\/h2>\n\n\n\n
Other Tidbits from the Buy-Side Technology Summit<\/h2>\n\n\n\n