Keith Laidlaw, former CTO at GVC, discusses the benefits cloud computing provides operators, and offers advice on how they can nail their cloud strategies
Cloud solutions offer tremendous upsides to sportsbook and online casino operators. They provide flexibility unmatched with operator-owned systems/data centers, can dynamically scale up and scale down, and bring much-improved security to a system while also being extremely cost-efficient.
This is particularly relevant in the USA marketplace where the size of market and customer uptake is not certain. Investing heavily in IT spend can be a burden especially when the customer market is uncertain. A cloud strategy allows flexibility to ensure the customer experience does not suffer while controlling costs.
Traditional systems can put great pressure on operators and their suppliers; they need investment in expensive hardware and require round-the-clock maintenance. Additionally, there is the equipment renewal cycle of three to five years.
Cloud solutions can overcome these hurdles and more, but to leverage the cloud’s full potential operators must have a comprehensive strategy in place.
Most new IT and technology-based companies utilize the cloud; this reduces initial set-up costs and allows them to scale without sizeable capital expenditure. In addition, they can access the latest hardware at no extra cost.
Gaming is in a highly-regulated environment, but watchdogs are allowing cloud usage with some minor caveats. Cloud providers have had a chequered past in their attitude towards gaming companies, but this has changed of late, especially for the fully-regulated public companies.
Utilizing the cloud
Some advocates and consulting firms are claiming that moving to the cloud will require a considerable re-write of the existing technical solution to be able to utilize its functionalities. This is absolutely not the case; bare metal cloud allows a lift and shift strategy to the correct provider that matches your profile.
That said, deciding which cloud provider to work with requires consultative expertise.
Perhaps the greatest benefit of the cloud is that it allows operators to increase and decrease capacity in line with demand around major betting events such as the Super Bowl or the Kentucky Derby. Here’s how it works in practice:
The traditional mindset is where Chief Information Officers build production systems to a peak load plus a surplus of around 10%. The downside, of course, is that this incurs significant sunk fixed costs.
During the UK Grand National there are between five to eight times more bets coming in than at any other time of the year.
This sudden surge can cause headaches for operators. In the past, they were faced with the decision to invest in additional hardware, software and support, and then carry the increased cost for the rest of the year or accept a reduced service during those peak periods.
The former hurts bottom line, the latter customer experience.
The cloud overcomes this and allows operators to commit to a base load and then dynamically and transparently increase and subsequently decrease capacity as and when it is required.
Some cloud providers offer this as an intrinsic part of their proposition, billing on a per hour or less period. With others, you have to stop your production systems to increase the capacity. To ascertain where the base load should be set requires a good understanding of the capacity usage over the days and seasons.
As well as this flexibility, the cloud also offers superior support. Manned by dedicated teams of customer support agents, resource usage will be monitored day-to-day, ensuring that systems run optimally always and with no outages.
Cloud solutions offer improved security to traditional data systems. Information is automatically stored and duplicated, eradicating the risk of data being lost. This means information is protected and safe in the event of a sudden technical outage or failure.
However, this is not true of all cloud providers. A recent report stated that up to 80% of cybersecurity breaches had a route into company systems via their public cloud usage. This is something to bear in mind.
Too good to be true?
In some ways, the cloud sounds too good to be true.
It’s not, however there are some caveats to using the cloud. Operators must put a comprehensive cloud strategy in place, and this means understanding their current profile and which cloud supplier can meet their needs in a flexible and cost-effective manner.
This will depend on your current technology profile and assistance in deciding which way to go and how to do it.
Nailing the right cloud strategy really does depend on your specific needs. You have to do an in-depth review of the technology stack and profile of usage of that stack – vis a vis what the cloud provider offers and how their charging structure relates to your profile.
There are companies now starting to provide this type of consultancy and – considering it is a strategic move – it is worth obtaining advice and input from those in the know.
Cloud computing is undoubtedly the future. Once operators and suppliers are armed with a better understanding of what it is, how it works, and the benefits it offers, many more businesses will embrace the service and technology and slowly migrate their data systems to the cloud in the coming months and years.
US operators are in the enviable position of being able to build their IT systems in the cloud from the get go, and instantly benefit from the upsides it offers. The forecast may be for cloud, but for sportsbook and online casino operators, that’s certainly not a bad thing.
Keith Laidlaw is an IT veteran and cloud computing expert. He can be contacted through findmyexpert.com.