National Stock Exchange of India’s cloud transformation

Image courtesy of National Stock Exchange of India Limited.

India has a number of active stock exchanges. It is home to BSE Limited, which was established in 1875, making it the oldest in Asia. There is also the Calcutta Stock Exchange, which was founded in 1863 and is the oldest government-owned stock exchange in the continent.

But amid these prestigious markets, the country’s leading bourse is the National Stock Exchange (NSE), which was established 1992 as the first dematerialised electronic exchange in India. According to Shiv Kumar Bhasin, its Group Chief Technology and Operations Officer, the NSE is the largest derivatives exchange in India, processing 7 billion orders per day at the rate of 200,000 orders per second, and dealing with 95% of the capital market in India.

All of these are made possible by the cloud.

At the recent Cloud Frontiers Conference organised by Jicara Media, Bhasin talked at length about the NSE’s cloud migration, digital transformation, how they influenced stakeholders in the organisation about their cloud adoption, and what he learned in the process.

Bhasin stated that in the first year of this decade, cloud is “the modern baseline”, and stressed that “any kind of digital transformation – whether it’s migrating legacy business apps to digital, diving into digital media from print, or moving towards data-driven, digital transformation (using advanced machine learning and big data) – the cloud is the keyword for all”.

“If you want to open up traditional channels to the API (application programming interface) economy, where you want to expose various interfaces supported by various user interface (UI) channels – through portals, apps, or proprietary or private business models where they are available only through leased-line services and a secured connectivity, and restricted data access is being given using restricted UIs – all that can be made available using the API’s gateways on the cloud,” asserted Bhasin.

Data centre vs cloud

Continuing in the same vein, Bhasin said that whenever one embarks on a cloud journey, there is always a question of which is cheaper: is it the cloud or data centre? He thinks the question is a must-ask whether an organisation is progressing in their cloud journey, or just starting to migrate to the cloud. “It’s all about managing and utilising the compute resources depending on one’s business model, which is also an art,” he said.

Bhasin explained that there are various supplementary and auxiliary services required for running an enterprise successfully, and the task isn’t restricted to just deploying an application on the on-premises server. He provided context by talking about how the cloud would be cheaper over various overheads – like on-premises data centres, co-location services, maintaining hundreds of racks, managing staff while maintaining the infrastructure, and ensuring that cybersecurity overheads are maintained on-premises.  

“That is one of the keys that will decide if I should go with a public cloud first or an on-premise data centre first. If I choose the public cloud, should I go for a single provider or a multi-provider? Is it a corporate-wide strategy or is it tied to specific workloads?” Bhasin asked.

Optimising the “cloud-first” strategy

Bhasin pointed out that in today’s new normal, businesses are “starting the old world in a new flavour” by working in a hybrid model, but for the approach to be fully functional, it might take more than a year’s time, especially given the fact that situations are uncertain. Thus, it is difficult to talk about the future.

He added that 88% of organisations have turned to a cloud-first strategy, citing the report titled “Market Insight: Cloud Shift – The Transition of IT Spending From Traditional Systems to Cloud”.

“What does a cloud-first strategy bring? It reduces the IT cost. This again depends on how well versed you are with cloud technologies; how well versed your IT administrators are to deploy applications and utilise cloud services in an effective manner; and in which scenarios it will become really cost-effective,” said Bhasin.

“Cloud-first is the strategy where around 90% of organisations are moving towards, and it enables scalability and volumes,” he observed. “During the pandemic, some of the lines of businesses have experienced exponential growth, while some had to innovate, depending on the scenario. A new customer journey and new stakeholder journey have emerged in the pandemic scenario. How can organisations be more agile and innovative? Cloud gives those tools and gratification of services in the shortest possible time.”

Considerations in switching to cloud

Bhasin shared several details that organisations must take into account when deciding whether they should migrate to the cloud or otherwise:

  • Not everything can or should be on the cloud.
  • Some workloads must remain on-prem due to regulatory compliance or be tied to a country’s geographical boundaries. Cloud deployed architectures are protected by deploying appropriate cloud-based security infrastructure and application data encryption at rest and transport.
  • Private cloud building technology will not deliver breadth, depth, and innovation of service providers.
  • IT organisations likely can’t update, innovate, and reduce costs of internal cloud services as quickly as possible.

Talking about services that could be taken to the cloud, Bhasin said that non-core departments like IT, financial operations, and HR can be moved to the public cloud model or SaaS (software-as-a-service) model. On the other hand, a company’s key channels (e.g. digital channels) would be the next best opportunities to migrate to the cloud.

“There are some of the edge services – whether they are user management, access management, single sign-on identity management, security services – those can be rather good examples that can be migrated to the cloud and public cloud,” he said. The NSE has chosen services like HR, finance, legal, customer service, IT for IT, IT security, and academy/education to move to the public cloud. They then reserved self-service, assisted channels, clearing and settlement, and risk and surveillance for the private cloud. 

Bhasin shared that the NSE recently launched their research services on the public cloud, and added that the process used to be very cumbersome, taking around 90 days just to get permission from the Exchange to access the data. “We made this entire process public-cloud-based and for the last three years hosted our data for researchers, where they are given a very restrictive VDI (Virtual Desktop Infrastructure). “With a restricted view, all the PII (personally identifiable information) is masked and secured so they can only take the insights, but cannot take any data.”

Public cloud for digital transformation

Bhasin said the NSE is the only exchange right now that is working on a massive digital transformation. He added that it uses a development environment hosted on a cloud-based DevOps, and developers from across India have been working remotely for the last 18 months to make sure everything is in place.

“Security and compliance are our topmost priorities which get shifted to our multi-cloud environment in a hybrid cloud. From there, it goes to our on-premises secure source code repository. So it goes from the public cloud to the hybrid cloud, then to the private cloud on-premises. Being a highly regulated entity, we have to follow this model. What we are trying to showcase here is that despite being a highly regulated entity, we are still able to utilise the public cloud and DevOps services on the cloud, and all the modern technology stack available on the cloud service providers to modernise and digitally transform our organisation” he said.

Bhasin explained that because the NSE is a regulated entity, they are cybersecurity-conscious as well. As a result, cybersecurity is part of their development lifecycle, where in the right environment, a secure code is produced and promoted by the UAT (User Acceptance Testing) environment.

“We being a performance-sensitive organisation, all the performance testing also gets carried out in a UAT environment, and then finally reaches the secure, private cloud on-prem for production,” he said. “We are not yet married to one cloud; we are adopting the multi-cloud approach so far. Public cloud service providers are becoming increasingly more sophisticated. Hence, we think that migrating to the public cloud is the right decision to basically trigger the digital transformation, innovation, agility, in your organisation”, he concluded.