How CommBank designed IT-as-a-service

The Commonwealth Bank of Australia has spent the past four years developing a cloud operating model to deliver IT platforms, infrastructure, software and data as a service, across the group.

The move, championed by chief information officer Michael Harte, was not initially popular, sparking a number of technology executive departures in early years.

But it has allowed the bank to slash its IT infrastructure spend, which now accounts for 26 percent of a $1.6 billion annual IT budget.

Harte told reporters last week that infrastructure previously cost $860 million a year, accounting for 75 percent of a $1.1 billion budget.

He said the bank looked to free up capital from IT infrastructure to invest in business logic, data and new customer-facing technologies.

“The hosting of commbank.com.au is with Amazon and we will continue to look for cloud service providers to host anything we can because we’ve got better things to do with our money,” he said.

“In some cases, some of the services we get are one-tenth the cost of trying to do that work internally.

“We’d like to invest in rich content for our customers … and rich data for customers, because that’s how we can confer value.”

Everything-as-a-service

Harte said CommBank sought to deliver “everything-as-a-service”, with his Enterprise Services team now delivering the likes of human resources and customer relationship management (CRM) software to business units on demand.

CommBank’s “everything-as-a-service” model is built on six core tenets: pay-as-you-go; contestability; on-demand; automation; standardisation; and workload portability.

The IT team offers a set of standard services to the business through a self-service catalogue. Business units approach multiple internal or external vendors for their IT requirements and pay for products and services on a metered, chargeback basis.

“We started at infrastructure and platform as a service,” Harte said.

“The most obvious examples are where we have virtualised services and now work to mobilise services, which means taking them out of machines, standardising the machines around x86 and then being able to move from internal servers to external servers.

“We have human resource, we have financial planning, we have cash management, we have content management, we have CRM all available as application-as-a-service both for the corporation and for our customers.

“Some of them are provided by us, from our cloud, and some of them are provided for us, by other parties, from the cloud.”

Continue to page two to find out how CommBank influenced the development of its vendor-supplied orchestration platform and how the cloud model is defining its commercial relationships.

CommBank’s cloud operating model is underpinned by an integration layer and an orchestration platform by vendor ServiceMesh.

Forrester analyst Dave Bartoletti reported last month that CommBank used ServiceMesh’s Agility Platform to implement and enforce policies for standard operating environments, workload placement, access control, virtual machine quotas and scheduling.

Harte described ServiceMesh as “an early stage company [that] required investment, were flexible around architecture and were going to standardise the way orchestration is effectively enabled”.

While the architecture was “proprietary to ServiceMesh”, Harte said CommBank had contributed to its design, testing and deployment.

“Being one of the first movers, we had the advantage of helping direct how the architecture would work,” he said, highlighting Fujitsu, Visa and US financial services provider UBS as other ServiceMesh users.

“We knew that we could standardise on that inside [CommBank] and that other corporations would want to invest in that, and their investments would keep the software capability current and market leading.”

Integrating cloud services

In recent weeks, CommBank has distanced itself from rivals National Australia Bank (NAB) and ANZ by decrying security and regulatory concerns associated with public cloud services.

NAB has “experimented” with public cloud services for marketing campaigns but plans to retain its data in a private cloud due to data privacy concerns.

Meanwhile, ANZ is faced with the prospect of duplicating elements of its private cloud in multiple countries around the world to satisfy 32 regulators in the countries it operates in.

Harte waved off definitions of “private”, “public” and “hybrid” clouds, describing “the cloud” as “any service we can subscribe to across a network, pay on-demand at a unit price, and we can switch”.

“It’s not hard, but it’s taken Australia quite a long time to get our heads around it,” he said.

“The main barrier is a lot of infrastructure suppliers; they don’t like it, and there are some software suppliers that don’t like it quite as much. We say goodbye to them.”

According to Forrester’s Bartoletti, CommBank has essentially become a “cloud service integrator”, with the IT team defining services, specifying how they should perform, and maintaining end-to-end service management and orchestration functions.

“Vendors are now required to adjust their own commercial terms to meet the bank’s business requirements, instead of the other way around,” he said.

Bartoletti highlighted the importance of strong leadership, the early development of a holistic cloud operating model, and the definition of clear vendor roles and policy-based governance in CommBank’s move.