The cloud: on the horizon for ATMs?
In 2008, only 12 percent of worldwide server workloads were virtualized; by 2014, 60 percent will be, according to IT research firm, Gartner. Of the companies currently using the cloud for some functions, 70 percent will continue to move more of their onsite computing functions into the cloud.
Gartner also found that "cloud is the top priority for global FS CIOs and … 39 percent of those surveyed expect that more than half of all their transactions will be supported via cloud infrastructure and software as a service by 2015."
SaaS: Another word for 'cloud'
Though it's just starting to get more attention, the fact is that cloud technology has been a part of the ATM landscape for ten years or more in software as a service applications. And the reason is simple: economics.
From the sales side, Morphis discovered this years ago when talking to prospective clients about their enterprise level ATM management software. Gary Faulkner, the company's chief marketing officer, describes the feedback he was getting in more colorful terms, but the gist of it was, "Sorry, we don't have that kind of money."
So, Morphis set out to make its products more affordable. The company set up a hosting center in Houston and began selling customers on the much more affordable approach of uploading a piece of client software to desktop computers and installing a VPN connection to the master hosting center.
"We were then able to convert our model from 'pay me a big license fee' to 'just pay me a monthly fee based on the number of ATMs you have,'" Faulkner said. "So that was our first venture into the cloud — because from the perspective of those users, Morphis was in the cloud."
Things evolved from there, Faulkner said. Today, customers can skip the desktop software and log directly into the company's data center. And, because it's all in the cloud, they can easily share the same information with their customers.
"So if you have a merchant that wants to see what his ATM activity is, he could log into your website and look at his ATM," said Faulkner. "And the way the security is set up, when he logs in, he only gets to see the information that's relevant to him — not anybody else's. And that way they can provide all types of services to their customers."
The ATM: virtually virtualized
Diebold is taking the cloud concept a step further yet, not just putting data about the ATM in the cloud, but actually virtualizing the machine itself.
In Diebold's virtualized model, an ATM's onboard computer is removed and replaced with a "Zero Client" device that connects the terminal directly to a shared, centralized computing resource — i.e., the cloud.
Communication with the cloud is seamless and imperceptible to the ATMuser. "Actually, this makes for a bit of a difficult demo for our customers because the ATM works like an ATM," said Mark Kropf, manger of emerging technologies at Diebold. "The difference is that there's no need for a computer in it and instead it's using resources from the data center. And the consumer doesn't perceive anything but possibly a faster experience."
Balaji Devarasetty, director of cloud services at Diebold, explained that all existing back-end systems — dealing with PCI regulations, banking regulations and the user's own safeguards or efficiency measures, such as remote management and monitoring — are transferred intact to the data center. "There are no changes to the software," Devarasetty said. "We just move the software. And when you move the software the compliance aspect goes with it.
But while there's no discernable difference in network operations, Diebold says there are significant improvements in network efficiencies, including:
- Greater network control and a secure location for IP addresses
- Better server utilization and unification of the ATM network
- Greater operational efficiency
- Streamlined disaster recovery
- Consistent user interface
- Easier deployment of new products and services
- Enhanced security
- Lower cost of ownership, servicing and management
- Increased uptime
But is the cloud secure?
As with all communications over a network, there is that nagging question of security: Where's the data stored? Who has access to it? What happens if there's a security breach?
In a LinkedIn survey, 54 percent of more than 7,000 respondents said data security was their biggest worry about migrating to the cloud. But in a survey by SaaS enterprise email provider Mimecast, 57 percent of respondents who were actually using the cloud, said they thought it made their information more secure.
Kropf said that a lot of the trouble with determining the security of the cloud was due to the fact that the term is too widely used. "There's a big difference from public cloud to private cloud, which is the case in our data center: You can't get there from online," he said. "The network that runs [the virtualization] solution is the exact same network that runs current solution … There's no additional opportunity for a man in the middle attack. But in addition to that our cloud actually affords us an additional layer of vault encryption that we didn't have prior."
Coming soon: proof of concept
For the moment, however, it's all theoretical. Diebold unveiled its virtualized ATM prototype last September at VM World 2011. The company is doing lab-based testing with customers now.
As of yet, there's no timeline (or price tag) for Diebold's virtualized ATM solution, but Kropf and Devarasetty both said it would be a matter of months, not years, before the company started introducing customers to ATM operation in the cloud.
"We're still working through the business value proposition and working with some of our customers to be able to validate the things that go into that," said Devarasetty. "We will evaluate — based on the results … and the feedback we get from customers — what we have to refine to productize it."