An Enterprise Perspective on Cloud Innovation

Andy Brown

UBS Group CTO Client Facing Technologies CIO

UBS: One of the leading financial firms

•UBS draws on its 150-year heritage to serve private, institutional and corporate clients worldwide, as well as retail clients in Switzerland

•We combine our wealth management, investment banking and asset management businesses with our Swiss operations to deliver superior financial solutions

•Present in all major financial centers worldwide, UBS has offices in over 50 countries employing about 66,000 people

•UBS shares are listed on the SIX Swiss Exchange and the New York Stock Exchange

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1Q12 results: Successfully executing our strategy

CHF 2.2 billion adjusted pre-tax profit, ~13.0% adjusted RoE

We are ahead of our plan to reduce risk-weighted assets

Visible progress across business divisions

Our capital, liquidity and funding positions remain strong

"The significant problems we face cannot be solved at the same level of thinking we were at when we created them."

"Anyone who has never made a mistake has never tried anything new."

Albert Einstein

"Insanity: doing the same thing over and over again and expecting different results."

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Core themes of the UBS business strategy

•Client at the center of everything we do

•Industrialization

•Effectively manage capital and risk

Key UBS technology investment areas

Our analysis and evaluation of the industry as a whole has led us to

focus on and invest in six key strategies

“ Whoever can process and analyze data better is the winner ”

Big Data

“ The problem with Green IT is that it runs opposed to how vendors build things ” Sustainability

“ Cloud empowers the entire IT organization ” Cloud

“ Android will change how people interface with applications ” Consumerization

“ A global identity model will likely be derived from Social Networks ”

Security & Risk

“ There is no one-size fits all approach…get tactical and look at specific use cases ” Social

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How our vision aligns with ODCA

• Cloud has been at the centre of the ODCA's activities from the start

• Sustainability is expressed through the Carbon Footprint Usage Model

• Security and Risk management have been a key area of activity with seven Usage Models now developed within the Secure Federation family

• Big Data is a new area of focus at the ODCA with the recent formation of the Data Services Workgroup to facilitate development of new Usage Models in this area

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What ODCA is all about – Driving data center standardization

• Partnerships with standards developing organizations (SDOs) helps to ensure that industry standards meet the needs of the enterprise

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UBS and ODCA alignment

• UBS is in the process of designing our cloud compute capabilities

• Cloud’s ability to support technology industrialization is a fundamental building block of our business & IT strategy

• Our participation in ODCA and Open Compute are deliberate and part of the “how” for our strategy

• ODCA adoption provides a framework for all of us to benefit from Open Compute:

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Reduced cost (~24%)*

Increased power

efficiency (~38%)*

Transparency of processes

*Estimated Facebook benefits from new data center built on open compute standards

Enterprise procurement is a small but important part of the cloud supply chain

Fusion

PaaS

Private on Premise

SaaS

IaaS

•Public

•Hybrid

•Private Off-Premise

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Cloud Computing at UBS: Why cloud automation?

• Like the industrial revolution, we have the potential to revolutionize IT through commodity automation

• UBS’ Cloud Broker can provide standardized, self-service, demand-driven deployment and support

• This allows “IT artisans” to focus on competitive differentiation

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From “IT artisan” to IT revolution

Using Cloud is core to UBS' Technology Industrialization strategy

•A core concept for UBS is industrialization

•ODCA brings the ability to industrialize the way compute is delivered by cloud providers

•UBS is committed to developing automated delivery of services built on:

⁻ Standard Stacks

⁻ Standard Data

⁻ Standard Cloud

Compute Resources

OS Stack (RedHat Enterprise Linux)

InterOp

Stack (MQ, EMS, sftp)

App/Web

Server

Stack (Tomcat)

RDBMS

Stack (Oracle)

Defa

ult

Ba

seDirectory /

Ident ity

Mgmt

Integrat ion

Password

Policy

Basic Key

Store &

Mgmt

Basic

Security

Monitoring

Basic

Security

Logging

Hard

Token

(HSM/TPM)

LOA4

Monitoring

Rules

LOA4

Security

Logging

Encrypt ion

Libraries

Controlled

Privilege

Elevat ion

LOA3

Monitoring

Rules

LOA3

Security

Logging

Break-Glass

Privilege

Access

Secured

Key Mgmt

(Central)

CID/PII

Washing /

Obfuscatn

LOA3

Packet

Filter

Basic

Access

Control

Policy

Enfocmnt

Cross-

Jurisdict ion

L1 access

Patch

Mgmt

Policy

Signing

LOA3

Patch

Mgmt

Policy

LOA4

Patch

Mgmt

Policy

LOA3

Access

Control

Policy

Enfocmnt

LOA4

Access

Control

Policy

Enfocmnt

LOA4

Packet

Filter

Two-Factor

Auth.

Hard

Two-Factor

Auth.

Service &

Protocol

Enfocmnt

Nat ive Product

LOA3

Service &

Protocol

Enfocmnt

LOA4

Service &

Protocol

Enfocmnt

LOA Framework

De

fau

lt B

ase

Nat ive Products

backup

synchronous

replicat ion

asynchronous

replicat ion

zero-outage

failover

automat ic

failover

manual

failover

recovery

0

1

2

3

4

BCM Framework

Defa

ult

Ba

se

OS Stack

simple f ile

t ransfer

messaging

client

P/S

subscriber

managed

f ile t ransfer

messaging

server

logging &

monitoringoperat ions deployment

P/S

publisher for InterOp Capabilit ies

Defa

ult

Ba

se

OS Stack

Servlet Engine HTTP Server

Security

Integrat ion

logging &

monitoringoperat ions deployment

User

Authent icat ion for Applicat ion-Web-Server Capabilit iesLoad Balancing

Defa

ult

Base

Nat ive Product

Storage/FS

Connect ivity

Security FP

(LOA3+)

Network

Connect ivity

Hardware

Drivers

Integrat ion

to Inventory

(discovery)

Virtual

extensions*

System

Monitoring

Remote

MgmtDeployment Backup

Availability

Feature

Pack(s)

LOA2

Security FP

Regional-

isat ion

Feature Pack

Standard

Tools/Ut ils

Vendor

Hardware

Tools*

Base Conf ig ShellFile Systemtask

execut ion

process

scheduling

Performance

Monitoring

system

logging

Defa

ult

Ba

se

OS Stack

RDBMS

…

logging &

monitoringoperat ions deployment

for Database Capabilit ies

Application Code

Application Libraries Application

Op

era

tio

nal

Eco

syste

m

Virtualization or Cloud IaaS

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Cloud computing at UBS: The constraints we need to optimize

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• UBS and most global finance companies, struggle with unprecedented regulation, change, complexity, and market pricing pressure

• IT must adapt to rapidly changing business needs while lowering spending… How?

−Be agile to start, stop, scale projects with less investment

−Implement policy to embed governance, control, transparency

−Improve standardization

−Reduce risk in operating environments

− Automate routine tasks

UBS has identified a cloud broker as a required enterprise capability

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Example: SDLC Automation

…and a required component of the target state

Key benefits to UBS

Cloud service providers are using automation to deliver agility; The ODCA helps us to engage with that community

•ODCA has allowed us to amplify our voice in the marketplace by articulating our key needs within common Usage Models:

⁻ Security

⁻ Regulation

⁻ Automation

⁻ Transparency

•RFP templates that have come from Usage Models help us to engage with Service Providers and shorten time to action

•Open source model for collaboration with other members drives quality and reduces internal workload

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Accelerate ROI via ODCA Usage Model deployment

• Benefits of solution alignment

• Simplifies RFP Issuance

• Streamlines Industry Focus on the Right Priorities

• Enables buying with Confidence for Open, Industry Standard Solutions

• Provides Scale to Accelerate Market Adoption

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Carbon Footprint

IO Control

Provider Assurance

Security Monitoring

VM Interoperability

Usage Models Featuring RFP Verbiage

Simplifies Procurement & Focuses Prioritized Innovation

ODCA’s role is accelerating cloud solutions

Prioritize

Deliver

Share

Unified Voice Accelerates Market Delivery

Solution Testing and Deployments based on a Common Foundation

Today’s Learning forms Foundation for Tomorrow’s Requirements

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The ultimate benefits of working together

1: Source: Projections based on IDC Cloud Services Forecast, May 2010. Assumes a 25% acceleration in cloud services from IDC estimate between 2010 and 2015

2: Source: Estimated 15% reduction in operational costs based on Bain’s $142B annual spending estimates.

$50B of cloud services1

Accelerate

$25B in TOTAL annual IT

spend within 5 years2

Saving

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"He that will not

apply new remedies

must expect new

evils; for time is the

greatest innovator“

- Francis Bacon

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Your Forecast for today

•Expand your network – Meet with executives and architects from some of the largest IT shops in the world

•Shape your cloud strategy – Engage with ODCA leaders as they discuss POC & deployment best practices

•Access the latest solutions – Learn about top solutions provider’s cloud solutions that meet ODCA's requirements

•Streamline purchasing & planning – Utilize ODCA's Performance Engine Assistant Tool to integrate ODCA requirements into 2012 cloud RFPs

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Enjoy Forecast!

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