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Potentially the biggest and most important tech deal in banking this year appears to have been agreed. After a mammoth tender process which began back in February, Google has won out over Amazon and Microsoft to be Deutsche Bank’s cloud partner for “at least the next ten years”, according to Bloomberg. The sums of money to be spent aren’t disclosed, but the Deutsche side of the deal is talking about a cumulative return of €1bn, which would suggest (given reasonable assumptions about the hurdle rates) that the cloud venture is going to account for multiple billions of dollars of investment spend; Deutsche has approved an overall investment budget of €13bn between 2019 and 2022 and will presumably continue to invest thereafter.
It’s not just about the immediate spend, though. As we noted back when the tender was launched, this was something of a must-win for Google, which was playing catch-up in the cloud space overall, and where Thomas Kurian had identified financial services as a key priority area. Not only will this deal give Google a strong anchor client for their applications (like AWS has with Goldman Sachs), it also puts the company at the centre of what’s notoriously been the biggest challenge in banking IT architecture for more than a generation. Everyone knows that there is huge kudos to be had, and potentially an eminently saleable product, for whoever finally sorts out the tangled web of legacy systems at Deutsche – lots of people in the industry would tend to assume that a cloud solution which could do that could do more or less anything.
Which could be quite interesting in career terms for anyone currently at Deutsche Bank and in any way adjacent to cloud computing. According to the Bloomberg story, the two firms envisage techies from Deutsche and Google “developing products together”, while Christian Sewing is quoted in the company press release as saying that the deal is “as much a revenue story as it is about costs”. So, Deutsche engineers could soon be working on revenue-generating projects in close collaboration with one of the top strategic priority areas at Google. Somehow, that feels like it’s going to be a lot better for long-term development than spending your days trying to match up legacy database fields while a regulator yells at you.
So how do you get one of these jobs? There’s nothing in either the Google deal release or Christian Sewing’s all-staff email suggesting that the cloud initiative is going to lead to job cuts, so we presume that they’re still hiring engineers. A year ago, we thought Neal Pawar was the guy controlling the budgets, but he resigned last week. Deutsche will no longer have a Group CIO, but Scott Marcar is CTO for the group and CIO of the investment bank. We also notice that Deutsche has a Head of Cloud Centre of Excellence, and a Public Cloud Lead. Things…
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Read More: Morning Coffee: Deutsche techies work with Google now. Banker jumps into
