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January 23, 2020updated 24 Jan 2020 2:02pm

Bank of England Turns to the Cloud, in a “Step Change” for Operations

A tender to build a new cloud operating model "will further improve legacy items within the estate that could be considered candidates for cloud adoption"

By CBR Staff Writer

The Bank of England is searching for a cloud build partner as it shifts workloads to the public cloud, in what the central bank admits is a “step change for operations”.

In a tender published late Wednesday, the BoE said it needs a partner to design, build and assure a “modern, fit for purpose cloud environment” spanning IaaS and SaaS.

The two-year Bank of England cloud contract comes little more than six months after the bank raised ongoing concerns about cloud “concentration risk and lack of substitutability”, in a cautious response to the Future of Finance Report.

That review, commissioned from banker Huw van Steenis, urged the central bank to “embrace the cloud” – and warned that complex regulatory requirements remained a barrier to cloud adoption by the financial services sector.

Bank of England cloud contract

New £20 notes being produced. Credit: Bank of England

Bank of England Cloud Contract

The new public cloud environment will initially  be used by the bank’s development, security, and corporate governance teams, it said.

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These will, respectively, use it to develop, test and deploy code as well as “onboarding stakeholders”; test how the cloud will integrate to its existing Security Operations Centre  and optimise “use of digital tools and governance as code.

While this week’s tender does not appear to involve the migration to the cloud of any applications central to the BoE’s payments work (e.g. workloads surrounding settlement accounts), it does suggest that it could open the doors for further migrations.

“This new operating model”, the tender notes, “will further improve legacy items within the estate that could be considered candidates for cloud adoption.”

See also: The BoE’s Future of Finance Report: Ludicrous, Elitist, Sycophantic and Vague

The Bank of England cloud contract winner will need to show:

  • “Evidence of delivering though a complete life cycle, a public cloud PaaS to a large organisation (with over 10 digital delivery teams hosted on the platform)
  • “Experience of developing, maintaining and operating complex operational tooling, including Kubernetes.
  • “Have demonstrable experience of setting best practices and policies, especially around microservice architecture
  • “Have demonstrable engagement with the devops community (for example, pull requests, industry conferences, meetups, existing relationships, partnerships or accreditations with major cloud vendors etc.)

Bob Lyddon of Lyddon Consulting told Computer Business Review: “The downtime of CHAPS in 2015 was the most visible sign of how antiquated the BoE’s systems were; they have been very coy about allowing any detail of the hardware level, or of the apps that sit on the hardware, or of the hardware configuration, to seep out.

“I am seeing in my mind’s eye a row of Tandem machines of some antiquity, sitting in a bunker near Debden in Essex and accessed by men-in-white-coats through green screens, and apps from the 1970s or 1980s running on those machines.

“You are probably talking about apps that cannot be ported to different hardware, possibly because the BoE bought the source code from a vendor in 1976 and did not take any of the routine upgrades. A client licencing the system and taking the upgrades would have been furnished over time with the ability to port to different hardware, say in the late 1990s as part of Y2K, but this will have passed the BoE by.

He added: “The replacement of CHAPS via the so-called RTGS Renewal programme will be predicated on the new system being deployed onto a completely new backbone at the BoE, and that’s what this tender is all about: a comprehensive replacement of the hardware/database/networking architecture onto a cloud basis (and Microsoft Azure must be a strong contender) so that replacement apps for what exists at the moment get built within the cloud, have the databases copied to them to enable a parallel running for a period, and leading eventually to a shutdown of the old app and a cutover to the new one as the sole production system.

“So there will be a phased – and probably lengthy – migration off the old apps and then, at the very end, the BoE’s Tandem machine(s) can be sold for scrap. I say Tandem because it is not so very long ago that it was mandatory for CHAPS participants to have a Tandem machine to run their end of CHAPS on – inferring that the BoE app and participant app for CHAPS could only be run on Tandem.

Fair? Unfair? Get in touch with your thoughts. 


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