Customer Solution Case Study
/ Investor Communications Specialist Floats IPO Platform into the Cloud andCuts Costs
Overview
Country or Region:Australasia
Industry:Registered Securities Transfer Agency.
Customer Profile
Computershare is a global market leader in transfer agency and share registration, employee equity plans, proxy solicitation and stakeholder communications, which it manages on a variety of high-performance platforms.
Business Situation
Computershare developed an online platform to securelymanage initial public offerings (IPOs). Hosted onsite, it required sudden, huge increases in bandwidth and server capacity.
Solution
Computershareredeployedits platform on cloud-basedWindows Azure for a regional IPO.
Benefits
- Reducedbandwidth costs
- Cut server costs and requirements
- Required less internal support
Peter Reid,Program Architect, Technology Services, Computershare
Global investor services specialist Computershare provides communications services to 30,000 clients in more than 20 countries. One of its technology tools – HKeIPO – is a platform that enables companies in Hong Kong that are about to float on the exchangeto manage online prospectus requests and receiveshare applications. Computershare hosted HKeIPO at its own data centres. However, the large server capacity the platform required was idle between floats, and bandwidth spikes during the short float periods were enormous. In 2010, Computershare exported this platform into the cloud with Windows Azure. The move took six weeks and within a month the platform was used to host investor enquiries for one of Hong Kong’s biggest initial public offerings (IPOs). The cloud-based platform-as-a-service easily accommodated peaks in service demand andcost less than five percent of the nominal costs of onsite hosting.
Situation
Founded in 1978 in Australia, Computershare is the world’s largest provider of investor-related technology services.The company focuses on systems that manage or facilitate interactions between a company and its investors and is considered a worldleader in share registration systems, proxy solicitation (where directors want shareholders to vote on specific resolutions) and stakeholder communications.
Computershare employs more than 12,000 staff worldwide and its customers include some of the biggest listed companies throughout the world.
Computershare Technology Services designs and hosts online platforms that help customerssecurely manage initial public offerings (IPOs). HKeIPOis aproprietary platform Computershare designed to manage onlinecommunications for IPOs in Hong Kong.
It enables potential investors to order the prospectus and register expressions of interest, and enables the host company to communicate share allotment information.
Computershare hosted HKeIPO at its own data centres.However, the peaks and troughs of IPO events – coupled with thesurge in traffic generated by the IPO platform – presented particular challenges.
“Hosting the application required us to scale our hardware, isolate databases and spike broadband bandwidth,” says Peter Reid, Program Architect, Technology Services, Computershare. “The variability of IPOs meant keeping a permanent parallel infrastructure active between IPOs, which was not cost effective.”
Computershare’s baseline requirement for HKeIPOwas four servers –the minimum needed to guarantee 100 percent availability during an IPO.
“We maintained many thousands of dollars worth of hardware, which we only used for approximately 28 days per year,” says Reid.
Far more onerous were the one-off costs of temporary increases in bandwidth.
“To spike bandwidth for the seven to 10 days of a Hong Kong IPO cost us about A$4,000,”says Reid.
When staff examined these costs, they also factored in the human element. Two weeks before an IPO, an average of six support staff would start to prepare for the technical demands the float placed on Computershare’s infrastructure.
“The team committed about 20 hours to preparatory meetings and about another 20 hours to configuration and deployment,” says Reid.
In the aftermath of the global financial crisis, the frequency of IPOs dropped. However, Computershare thought demand would pick up quickly – especially in Asia – and decided to use the respite to devise a more efficient way of supporting its IPO platform.
Solution
The basic parameters of the hosting requirement were straightforward. The IPO platform needed to publish public information for a short period of time with a modest amount of notice. It required 100 per cent availability and bandwidth capable of being expanded rapidly at very short notice.
“The question that occurred to us was: ‘Why not spin it up into the cloud?’” says Reid.
The existing application was a relatively simple product, with only a few back-end dependencies and minimal security requirements. It was also written in the .NET framework, which gave Computershare a range of relatively trouble-free hosting options.
“The attraction of spinning the platform up into the cloud was that we would relieve ourselves of having to worry about maintaining the operating system, the server hardware, load balancing and computing capacity,” says Reid.
Reid and his colleagues investigated the feasibility of using Microsoft’s platform-as-a-service offering, called Windows Azure.
“Azure supports codes written in a variety of languages, including Java and PHP,” says Nigel Watson, Platform Strategy Advisor, Microsoft Australia. “However, for customers whose existing applications run on Windows Server – which this did – getting them into the cloud is very straightforward.”
Computershare decided to proceed. Following exploratory discussions in April 2010, Computershare migratedHKeIPO into the cloudwithin five weeks. The transition included building a framework for the platform to communicate withComputershare’smain infrastructure, which managed logging, monitoring, and reporting and the actual share registry.
Within a month, the cloud strategy was put directly to the test. A Chinese company sought to place an initial batch of shares in the territory’s market in one of Hong Kong’s biggest IPOs.
To manage inquiries and receive applications, Computershare’s HKeIPO was configured as a three-page wizard. Staff anticipated more than half a million site visits and 1.5 million page hits over seven to 10 days with most of these hits concentrated in the first hour.
Benefits
Hosted at a Microsoft data centre, the Windows Azure-based platform coped faultlessly.During the IPO, Computershare successfully scaled bandwidth and server capacity up and down to suit demand. This reduced risk, costs and support requirements, and has encouraged the company to move more of its services into the cloud.
Reduced costs
Following the IPO, Computershare compared its costs. Instead of paying thousands of dollars forfour permanent servers, the bill from Azure was A$121 for six offsite servers that were available 24 hours a day over theIPO period.
“However, the real story was bandwidth,” says Reid. “We were paying A$16 per hour at burst capacity when we hosted. With Azure, there is a carefully graded scale according to file upload sizes. Instead of paying an estimated A$4,000 in bandwidth charges for this float, we actually paid A$49.50.”
In addition, because the infrastructure is managed externally, internal staff are under less pressure and labour costs are reduced when compared to onsite hosting.
“Now when an IPO comes up, we can scale up the cloud IPO platform half an hour before it comes online,” Reid said. “The platform is very hands-free and we hardly have to get involved.”
Long-term benefits
Besides cost savings, the cloud strategy has started to deliver long-term business benefits in operations and infrastructure procurement.
As the cloud-based platform copedwith demand, Computershare is reassessing the amount ofinfrastructure it needs to buy or maintain to manage the risks of peak demand. This could reducelong-term infrastructure costs.
More services into the cloud
Having proved the viability and economics of the cloud strategy, Computershare is now analysing which of its other services can be transitioned. Although the finance industry has to be exceptionally cautious with the robustness and security of its proprietary systems, staff are confidentthe strategy can be pursued further.
Computershare iscurrently costing and comparing other onsite deployments with cloud alternatives.
“The Content Delivery Network capabilities of Windows Azure give us the ability to put our content management and deliverycloser to end users,” says Reid,referring to the localised server capability thatimproveshigh-content bandwidth delivery. “Ultimately, we are looking to move our costly servers out of our data centres.”
Windows Azure Platform
The Windows Azure platform provides an excellent foundation for expanding online product and service offerings. The main components are:
- Windows Azure. Windows Azure is the development, service hosting, and service management environment for the Windows Azure platform. Windows Azure provides developers with on-demand computing and storage that enables them to host, scale and manage web applications on the internet through Microsoft data centres. In addition, Windows Azure serves developers’ connectivity needs through the following services:
The Service Bus connects services and applications across network boundaries to help developers build distributed applications.
The Access Control Service provides federated, claims-based access control for REST web services.
- Microsoft SQL Azure. Microsoft SQL Azure offers the first cloud-based relational and self-managed database service built on Microsoft SQL Server 2008 technologies.
To learn more about the Windows Azure platform, visit: