Latency in cloud services is one of the barriers that needs to be overcome for financial services firms looking to adopt a hybrid cloud strategy, according to Morgan Stanley's head of data centre operations.

Speaking at the DataCentres Europe 2013 event in Nice, Michael O' Toole, global head of datacentres at Morgan Stanley, told attendees that the company has witnessed major a shift in what is expected from a data centre by enterprise users in recent years.

"If I was to look back ten years ago and describe what I thought about data centres, it would probably be in terms of being a place to put servers, a place to put storage," O'Toole said. "I now think about data centres in a bit more of a sophisticated way, and in terms of business outcomes."

"It needs to be flexible, it needs to be fast, it needs to have good geographic links, so location is important, and it needs to have the ability to scale up to large enterprise size."

In order to meet the business needs of the large international enterprise, a strategy to begin moving to the cloud is being put in place at Morgan Stanley

"Some [aspects of the business] will stay internal for high performance and complex systems. At the same time a decoupling of some of the systems that will eventually go into the cloud," he said.

"We are now in the consolidation phase. We have already standardised to a good extent, we are now consolidating and running a big project in North America to consolidate our data centres. Then we move on to automation, followed by a paradigm shift where we decouple some of the workload away to an external cloud, which then becomes a utility."

O'Toole explained the company already uses cloud services for some aspects of its business, and expects to increase by moving more applications into a hybrid cloud.

"We do use a significant number of cloud services today. One example is our IT work flow, our service request workflow, our problem management workflow, that is all run on a system completely cloud based. There are literally millions of service request that go through that system every year.

He added: "In future you will see environments where we are building applications in the cloud."

However, O'Toole noted that there are a number of barriers that need to be overcome for financial services firms moving to a hybrid cloud model, and top of the list is latency.

"The number one challenge is getting deterministic latency. In our business the return time to whatever exchange or liquidity pool you need to get to is really important, and that is something that is not yet properly in the cloud mentality, that latency is really important."

O'Toole also contends that a concept of business continuity is lacking in cloud services.

"There is an assumption that all of that will happen at the software layer, and for most industries they are not at the stage of evolution in terms of software where they have got all the business continuity built into the software layer."

Another challenge faced is the ability to benchmark public clouds against private setups, which is currently problematic, he explained.

The introduction of standards is also key, with O'Toole pointing to the developments made with OpenStack in delivering standardisation for hybrid enterprise clouds.

The ablity to benchmark public and private clouds is also currently an issue, he said: "We need public clouds that benchmark well against private offerings, one of the issues we have is that we find it difficult to benchmark internal products versus the cloud. There needs to be a much better way to do that."

By embracing a wider cloud strategy, O'Toole recognises the need for a workforce that is skilled in procuring and implementing cloud services.

"Business processes are replacing technology workflow. New organisations within IT departments need to be a lot more commercial and less focused on the technology side," he said.

"What it means is we need people in IT who really understand about sales, procurement, sourcing and relationship building with external organisations."

He continued: "That requires new skill sets, and there will be people like cloud architects, people who build cloud brokerage services. Really the face of IT departments is going to change a lot when this future actually evolves."