Google Apps Lands Its Biggest Cloud Computing Deal Ever—and It's With a Bank?

By Rex Vining - 19/01/2012 07:00:00

Google Apps, the cloud computing wing of Google, recently signed their largest deal to date. But it isn't the size of the deal that's surprising—it's the fact that they partnered with a bank. Financial service companies seem like the most unlikely candidates for cloud solutions due to their high security needs and strict regulations regarding sensitive customer data.

 

BBVA is not only one of Spain's largest financial institutions; they're also the largest bank in Mexico, and they have a pretty big presence in the southern United States.^[4] The Spanish banking giant has signed on to offer Google cloud computing to 110,000 of its employees worldwide.^[1] Over 35,000 Spanish employees will begin using the tools with plans to migrate the cloud computing services to employees in over 26 countries by the end of 2012.^[1] BBVA workers will use many of the tools in the Google Apps suite including:

 

• Gmail with Google Chat

• Google Calendar

• Google Docs

• Google Groups

• Google Sites

• Google Video.^[3]

 

This groundbreaking deal will likely leave many in the financial services space wondering whether this was a risky move or a breakthrough in corporate adoption.

 

Banking Security: Protecting Customer Data

 

One major concern financial institutions have had with cloud computing is their ability to protect sensitive customer data. BBVA's data will not reside on their own dedicated servers, which is known as private cloud computing. But rather, the data will be spread across the public cloud in Google's data centers. However, Carmen Herranz, director of innovation at BBVA, is quick to note that the company's customer data will "stay in our own data centers," while applications like email, calendar, documents and chat will be taken to the public cloud.^[2] Herranz also stressed that the data BBVA does store in the cloud will be just as secure as any solution on the bank's premises, meeting the stringent demands of both banking regulators and data protection officials.^[4]  

 

Financial Innovation in the Google Cloud

 

Despite the potential issues with banking security, BBVA has a number of reasons for entering the Google Cloud. According to the BBC, most enterprises leave close to 80% of their computing power idle and spend over two thirds of their IT budget on maintenance and software upgrades.^[4]  However, cloud computing provides an operational efficiency, allowing firms like Amazon Web Services to run their servers at over 90% capacity.^[4] This not only cuts cost, but also helps the environment. According to Sebastien Marotte, head of Google Enterprise apps in Europe, his corporate customers are enjoying an average cost savings between 50% and 70%.^[4]

 

However, Ms. Herranz said the project was not about saving costs, "The main goal is to promote innovation and making decisions and increase productivity. We are in a challenging market and need to make faster and more accurate decisions…and eliminate duplication."^[4]

 

Another big motive for the move is the increased collaboration and mobility needs of BBVA's workforce. Many bank employees now rely on smartphones, tablets, and laptops to accomplish their work. Jose Ollalo, Chief Information Officer at BBVA noted, "We were looking for a technology that would transform our business operations, not just make our workers more efficient. Integrating the Google Apps for Business suite with our own tools will allow us to introduce a new way of working where employees have access to all the information they need with just one click, no matter where they are, and can reap the benefits of using advanced collaboration tools."^[3]

 

Expect Some Growing Pains

 

Although BBVA anticipates great success from their move to the cloud, they also expect some growing pains in the process. Their primary concern centers on whether their computer network will be able to handle the sharp rise in network traffic that cloud computing demands. The city of Los Angeles experienced network performance issues when they launched into the cloud several years back.^[4]  BBVA launched a pilot program with 7,000 staff members to test their network.^[4] This program ran smoothly, but they continue to monitor for increases in network load.^[4]      

 

Employee training presents another challenge for the banking giant. BBVA has developed personalized guides to prepare their staff for the transition to cloud computing.^[4] They have also encouraged their employees to leave old email and data in their legacy systems, assuring them that this information will be accessible if needed.^[4]  But, according to Ms. Herranz, we "want to start from scratch…don't want to carry across old behaviors."^[4]

 

Risk vs. Reward

 

Going forward, many in the financial industry will be watching this transition with a close eye to determine whether it was a success or failure. Although BBVA will not store sensitive customer information in the cloud, one has to wonder whether they are at risk for having their internal communications hacked. It only takes one employee sending sensitive information via email to open the door for this possibility. Training employees on what information they can and can't include in emails will likely be a huge factor in BBVA's success.

 

This deal also seems like a huge win for Google. According to Mr. Marotte, the deal is important "because it is the largest ever agreement we have signed with an organization, it is important because it is a very large finance company, it shows that now even banks are moving to the cloud." However, maintaining the security and confidentiality of BBVA's internal communications is of the utmost importance for Google. If they can achieve this goal, it will be a huge win for the search giant, but if they falter, they will likely send other financial institutions running from the public cloud with their tails between their legs.

 

What do you think? Will the Google Cloud respond to the challenge?

 

References

 

[1] Crosman, Penny. "BBVA to Use Google Apps in the Cloud." American Banker. American Banker, 11 Jan. 2012. Web. 17 Jan. 2012. <http://www.americanbanker.com/issues/177_8/bbva-google-apps-cloud-computing-1045633-1.html>.

 

[2] King, Leo. "Banking Giant BBVA Moves Internal Apps to Google Cloud."ComputerworldUK.com. 11 Jan. 2012. Web. 17 Jan. 2012. <http://www.computerworlduk.com/news/cloud-computing/3329429/banking-giant-bbva-moves-internal-apps-google-cloud/>. 

 

[3] Lauchlan, Stuart. "Spanish Banking Giant Gives Google Apps Its Biggest Deal to Date."BusinessCloud9. 11 Jan. 2012. Web. 17 Jan. 2012. <http://www.businesscloud9.com/content/spanish-banking-giant-gives-google-apps-its-biggest-deal-date/7477>.

 

[4] Weber, Tim Business. "Google Persuades Spanish Bank BBVA to Use the Cloud." BBC News. BBC News, 11 Jan. 2012. Web. 17 Jan. 2012. <http://www.bbc.co.uk/news/business-16486796>.