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We may start the discussion from the Data Center and Disaster Recovery Site (DRS) of an organization like a bank. Building this computing house is costly. Moreover its operation and maintenance are also troublesome. In order to reduce the cost and its troublesome operation and maintenance, we may hire some racks from the companies who are providing space for Data center. These companies have built a large Data Center and they are responsible for managing the passive part of the Data Center i.e. they ensure uninterrupted electricity and the environment inside the Data Center (cooling, smock detection, fire/water protection, earthing etc.). These companies have developed expertise of operating and maintaining their Data Center in such a way that their interruption rate is lower. Their activities are focused only on operation and maintenance of the DC. But the activities at the IT department of an organization like a bank are much more. They need to focus on telecommunication system provided by third party, network devices, server hardware, storage hardware and many more. But have we ever thought that whenever a DC shuts down due to sudden power failure, how painful is the job of IT personnel to restore the system within shortest possible time? Outsourcing the DRS may reduce the chance of such painful job.

Now we can look at the traditional way of managing the server hardware pool at the Data Center. Usually we procure a pool of physical servers in the Data Center and we allocate each physical server for each Software Application or Database. In this scenario, these servers’ computing resources (processor, RAM) cannot be fully utilized from the day one of their operation. Probably we start using them say 30% to 40% of its capacity. The remaining portion remains idle for next few years until the computing demand reaches near 100%. In many cases we replace these old servers with new servers with higher capacity. But if we could use these servers in the same Software Application or Database until they are not becoming unusable, the cost of maintaining the pool of servers would be less. Another fact should be mentioned here that whenever a server demand has come, we cannot immediate provide it. We usually go for procurement that takes time. We also cannot allocate and de-allocate the computing resources for some specific Applications during peak hours and off peak hours.

Here the server virtualization technology has emerged to remove all these bottlenecks and it gives us lot of comfort of managing the few number of physical server hardware pool that provides many numbers of virtual server pools. Computing resources allocation and de-allocation during peak and off peak hours can easily be done. Immediate server demand can be meet. The old servers can be utilized until it becomes unusable. That means the server virtualization technology gives us the benefits of easier manageability and cost effectiveness.

Next we can look at the selection of Operating System and Database. In the banking industry, we use some mission critical Applications where the selection of world renowned commercial Databases like Oracle RDBMS or DB2 may be justified. But where we are selecting a Database for ordinary Applications, we should go for the free version of MySQL or PostgreSQL. This Database software is license free and can easily be managed.

We should now discuss the procurement of ordinary software (Payroll, Attendance, Inventory etc.) for carrying out necessary tasks of our organization. We usually select Windows Operating System and SQL Server or Oracle database. Under this scenario, we buy the licenses of this Software along with the license of the Application Software to stay compliance. Similarly, we are developing the in-house software using this Software. As are result, we are spending hard earned foreign currency for purchasing the licenses of this Software which we can very easily avoid it. If we select open OS platform preferably Ubuntu, CENOS etc. and can procure or develop Software that run on it using free version of Database like MySQL or PostgreSQL, we shall be able to save the licensing cost. Moreover its manageability is very high. It should be most practical to discuss here about the selection of Server and OS for the mission critical Applications like Core Banking Solution (CBS), Card Management Solution (CMS), Switching Software etc. Usually we select RISC based server (IBM Power series, HP Superdome etc.) and Unix Operating System (AIX, HPUX etc). Cost of maintaining these servers is high. Now the vendors of these missions critical Applications are moving towards Linux Operating system on virtualization environment. We have already mentioned about the benefits of virtualization environment. It should be mentioned here that the market share of non x86 based servers are decreasing and the market share of x86 servers with Intel Xeon is increasing. And hence it should be pertinent to mention here that the support service of the non x86 servers may be difficult in future.

As the pressure for compliance is growing day by day, we should move to the free version of Applications that we need in our everyday life. For example, we always need email software, Word processing Software, Spreadsheet analysis Software, presentation Software, project management Software etc. Instead of buying licensed version of these Software, we can use free version of these Software like WPS Office for office management, Zimbra for email etc. Of course, there is many other open sources free software besides these ones.

Now come to the IP telephony. The benefits of IP telephony are enormous that we all know but the branded IP telephony system like CISCO is very costly. Instead we can use open source software and low cost phone set for the system that works fine in many organization.

Now what should we do? The IT Heads should take initiative to bring the changes in its ICT strategy. The programmers should be encouraged to develop their skill in Open Source environment. Proper training can be imparted to these programmers. If we can manage the cost of external training for the programmers from the organization, it will be encouraging for them.


  1. Sir, you have mentioned bank may use open source SW but you did not discuss the security risk of open source SW! how do we address the vulnerabilities of opensource SW? because working in the banking environment programmers may not able to take appropriate measures to mitigate all critical threats!

    1. Can cloud computing be explored where initially mission critical applications stays in house and test environments be moved to the cloud and later an everything is moved to the cloud. Can the main transaction processing engine be shifted to the cloud? Can this lead to reduced cost?

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