First Boston Exec: "Don't Assume Private Clouds Are Secure"

Private clouds are not free from security issues because they often have their origins in hybrid clouds, an executive from First Boston Global Capital Markets has told delegates at the European Trading Architecture Summit in London.

Louis King, managing director, global capital markets, First Boston Capital Markets, said private clouds are often seen as the answer to security concerns, but this is not always the case because many of them are "intertwined" with public clouds.

"A lot of the private clouds have their origins in hybrid clouds, which themselves are part of infrastructure-as-a-service, which is the public cloud," said King. "So the outages for security issues that arise as a result of that particular public cloud could in fact affect what you would deem to be a private cloud."

Robert Johnson, head of front-office solutions, Mitsubishi UFJ Securities, also questioned the assumption that private clouds are free from security issues. "I would challenge the idea that a private cloud is intrinsically safe, because I don't know who actually owns the buildings that their data centers sit in or the lines between them," he said. "A lot of fibre goes through a lot of pipes and we don't own that."

Johnson said another disadvantage of the private cloud is the fact that it requires capital expenditure. "You still have to buy the 'tin' up front," said Johnson. "You have got to buy it and then resell it. [...] What I am interested in is offering op ex to people."

Johnson said if internal clients want to conduct considerably more risk analysis through the night because they have witnessed unusual market activity, a private cloud will not accommodate this. "I can't offer that to them using private cloud. We don't have that capacity," he said. "What I can do is provision it from a public cloud and I can actually double the size of our in-house grid within half an hour, something like that."