Deutsche Bank picks HP for ten year cloud deal

Grim news for the bank's own data center staff

25 February 2015 by Nick Booth -  -

Deutsche Bank picks HP for ten year cloud deal
Thinkstock / vora

Deutsche Bank is to outsource much of the wholesale banking division’s IT infrastructure to HP in a 10 year multibillion-dollar deal. IBM, meanwhile, will retain the job of managing the retail banking arm.

HP will host Deutsche's operations using its own computing, storage and networking capacity. Deutsche is to remain in control of key compliance-regulated areas, however, such as IT architecture and information security.

The arrangement means the wholesale section of Deutsche Bank can cut costs and launch new products and services more quickly, according to its chief operating officer Henry Ritchotte.

Missed profitability
In December Deutsche Bank began a review of its operations in a bid to address its problem with missed profitability targets. Among the ideas mooted in its restructuring plans was the selling of its retail banking arm, including its high street banking arm Postbank.

Currently, the IT infrastructure for Deutsche retail banking and Postbank is governed by an accord that Deutsche concluded with IBM in 2003. Under the arrangement IBM runs Deutsche’s retail banking operations in Germany, including those of Postbank.

The overall strategy for Deutsche Bank is to divest itself of IT and data centers, according to analyst Clive Longbottom, senior researcher for Quocirca. “This is something that we've been saying has to be the case for years,” said Longbottom.

Data center workers in banking should take heed, he warned, because this deal reflects a trend in the sector. “IT workers who are very technically focused should be looking to get employment with an HP, IBM or service provider company,” said Longbottom. “Those that want to stay working for a company that uses IT, rather than provides it, need to re-skill to become business advisors.”

With more technical work in banking being outsourced, a banking IT expert’s most saleable asset will be expertise on the options available to business, said Longbottom.

Understanding of the risks and opportunities of the options – be they in-house or outsourced; physical, virtual or cloud; private, public or hybrid cloud - is the human resource that banks will want to invest in, he said.

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