A COO’s Strategic Roadmap to Navigating Cloud Partnerships

For today’s hedge fund Chief Operating Officers, the drive for success in the fast-paced markets and regulatory landscape demands constant innovation, optimization, and resiliency. You’re well aware of the challenges you face: the need for flexibility and scalability to support growth, seamless integration of existing and new systems, and operational efficiency (and doing it all within budget). Staying competitive in the industry requires a dynamic approach that streamlines operations and improves business outcomes. And your peers are increasingly turning to cloud adoption to achieve both. 

Agio’s 2023 Hedge Fund Managed IT Report found that hedge funds—whether they insource or outsource their technology infrastructure—aren’t happy with their current model, and the next two years will be an era of change. A common theme among hedge fund COOs is the drive to outsource more of their technology services. The thing driving their decision? The cloud. More than half (54%) of COOs predict managed service providers (MSPs) will almost exclusively manage IT in the public cloud in the next two to three years.  

Of firms that outsource, 75 percent emphasized that a factor in choosing an MSP is their capability to effectively manage and support a public cloud environment. The vast majority (84%) of COOs who outsource agreed this is a crucial capability. And 43 percent of COOs ready to switch from insourcing to outsourcing said they want to tap into the benefits of third-party public cloud management and support.  

As you steer your hedge fund toward success, selecting a cloud provider becomes a strategic cornerstone. But you don’t want just anyone handling your migration journey to the cloud. As you consider the move, here are five things to look for in a provider.    

#1: Cost-Efficient Operations & Scalability 

More than half of COOs (58%) who plan to outsource their technology infrastructure in the next 24 months reported a need to scale IT operations cost-efficiently.  

Because your fund’s growth trajectory is non-linear, look for a cloud provider that offers effortless scalability, allowing you to adapt swiftly to market fluctuations and seize new opportunities without technological constraints.  

Of course, cost is always a consideration, and while the cloud offers cost-saving potential, pricing models can be complex. Opt for a provider with transparent billing, pay-as-you-go options, and the ability to optimize costs as your usage patterns evolve.  

#2: Integration, Customization, & Support 

If you’ve invested in bespoke systems and processes, you can’t afford to have them quit working. All the COOs we polled told us they weren’t happy with their current MSP. One of the main reasons they’ll switch providers in the next couple of years is to access better system up-time and quality. The strength and resiliency of public cloud computing offer both of those benefits.  

A frictionless cloud migration should include everything—even customized, proprietary apps. Ask potential providers how they maintain operational continuity, make sure no system is left behind, and manage and monitor performance after the migration.  

And because your fund’s needs are unique, you need an MSP that can tailor cloud solutions specific to you. That means your cloud partner needs to know the industry inside and out. Cloud investment industry knowledge was one of the most important attributes COOs said they look for (84%) when selecting a third-party vendor. Look for an MSP who offers responsive customer support, understands the intricacies of financial operations, and gives you full transparency into what your support teams are doing.  

 #3: Security   

When the stakes are high, you can’t afford to let security slide. Given the financial sector’s susceptibility to cyber threats, prioritizing a provider’s comprehensive security infrastructure is non-negotiable. An MSP’s substantial investment in cutting-edge security measures translates to safeguarding the integrity and confidentiality of critical financial information.  

Make sure your chosen provider is fortified with robust security measures, including data encryption, threat detection, multi-factor authentication, and compliance with industry standards.   

#4: Uptime  

Reliability and uninterrupted operations are must-haves when choosing a cloud provider. Downtime translates to lost opportunities and credibility. More than half of COOs (54%) looking to outsource in the next two years said end-user support responsiveness is a decisive factor in their strategy.  

Seek a provider with a proven track record of maintaining high availability and redundancy, ensuring your operations run seamlessly even in the face of unexpected challenges.  

#5: Innovation 

The finance landscape is evolving rapidly. When we asked how managed IT would evolve over the next two to three years, 57 percent of COOs pointed to inefficiency in data processing and said MSPs will need to employ predictive analytics to improve prevention and response. Relatedly, 44 percent of total respondents predicted that MSPs will use Artificial Intelligence to help IT support agents remove service delivery friction and add value to support quality.  

Partner with a provider that embraces innovation, offers a range of services and integrates with cutting-edge technologies like AI, machine learning, and analytics.  

At Agio, we believe the AI-human partnership is the only way to manage the chaos of our digital age while preserving the nuanced humanity of personal service. Our engineers use predictive AI to constantly monitor systems and detect and eliminate vulnerabilities before they’re exploited. 

Embrace Success 

Cloud transformation is more than just buzz; it’s a transformative strategy that can empower COOs to drive growth, enhance operations, optimize cost-savings, and build a resilient and agile organization in a competitive market. But you need the right cloud partner.   

At Agio, we offer a wide range of managed IT and cybersecurity services to help hedge funds stay ahead of the curve. From cloud deployment and support to AI-powered automation and predictive analytics, we have the expertise and experience to help your firm succeed in today’s rapidly changing environment. Contact us today.