Investment innovator Vontobel triples compute capacity using elastic Azure high-performance computing

New market demand and higher usage force changes

On an average day prior to the pandemic, the company’s low-latency quoting system was sending about 3 billion quotes to exchanges in nine countries. Due to market uncertainty and volatility, that number of quotes increased fivefold during the crisis, requiring nonstop, hands-on efforts to continuously reallocate and optimize the on-premises computing resources that Vontobel relied on. The market making and quant teams kept the operation running, but it wasn’t easy. After the emergency subsided, the teams analyzed Vontobel’s digital platform and agreed that future-proofing it for unpredictable market changes and trading volumes in a fast-changing environment was critical.

With Vontobel’s existing compute capacity stretched to the limits, long procurement times for new on-premises installations exacerbated by supply chain woes, and a newly urgent internal focus on optimal reliability and availability, the limits of the company’s existing on-premises infrastructure became stark. Compared to many of its competitors, Vontobel isn’t a large organization, but its small front-office technology teams are very innovative. They initiated a new approach, opting to work with Microsoft to build a flexible Azure high-performance computing (HPC) grid to extend and modernize Vontobel’s existing infrastructure on the Azure cloud platform. In early 2021, Vontobel began working in the new environment, and the new grid went live by the end of the year.

Vontobel builds a cloud future with Microsoft

Like many organizations, Vontobel had some initial hurdles to overcome for a public cloud deployment. “Upfront investments in people and technology are required to reliably use the cloud, so extra caution is totally justified,” says Borowski. “You need a partner to help you understand and overcome entrance barriers. Fortunately, we have a great team at Microsoft, which helped us build up our internal resources and ensure that we got things right.” Vontobel knew that Microsoft had successfully implemented Azure HPC grids with other customers. The two collaborated to make sure that Vontobel’s deployment was tailored to its unique and complex risk architecture while retaining and integrating some of the company’s existing infrastructure solutions. “We found the right balance of using Microsoft services where they really add value to our own competencies,” says Borowski.

Vontobel’s front-office technology team modernized the company’s risk architecture by containerizing workloads in Docker containers. It also uses Azure Virtual Machine Scale Sets and availability zones for reliability purposes, in addition to Azure F-series Linux virtual machines (VMs) with Intel cores. “It’s a homogeneous setup in the sense that we rely on a vast set of VMs that are all the same,” says Patrick Kuppinger, Head of the Quant Group at Vontobel. “There’s no special design for individual machines that we need to take into account the way we did in our legacy on-premises solution. That homogeneity is very important. We want to treat compute resources as a commodity and avoid idiosyncratic effects on deployments or calculation performance.”

The elasticity of the Azure HPC environment is arguably the most important facet of Vontobel’s deployment, and the front-office technology team uses Azure Spot Virtual Machines mixed with Azure Reserved Virtual Machine Instances. “We rely on the pool of Azure Spot Virtual Machines because we can turn them on and off within seconds,” says Kuppinger. “You can’t overestimate the effort it took to accommodate any extra load in our previous system. We’re now free from the quest for resources, and because our Azure HPC grid is a reliable and truly elastic environment, we’ve increased our compute load by roughly a factor of three, which is amazing.” Adds Borowski, “We’ve reserved capacity to cover our base load, but probably 50 percent of our capacity is spot VMs because they’re inexpensive and have always been available.”

The initial caution about cloud deployments has completely disappeared in Vontobel’s structured products team. The quant technology team’s new goal is to move its remaining on-premises capacity to Azure within the next six to eight months. “With our Azure deployment, it’s not just about cost savings or critical elastic flexibility—it’s about reliability,” says Borowski. “In the first one and a half years after deployment, we saw higher availability than promised in the service-level agreements.”

A Swiss investment firm with big reach does more with less

Vontobel’s Azure HPC environment is helping developers maximize their productivity, enabling them to focus on innovation. “When we fully relied on on-premises resources, we had to carefully calculate scheduled workloads to make sure we could get them finished with our limited resources,” explains Kuppinger. “With Azure, we don’t need to do this anymore. If we need 50 more VMs for the next two hours, we just spin them up and the developers can then focus on other tasks.”

Another important takeaway is that businesses like Vontobel can access Azure high-performance computing at scale—it’s not just for huge, universal firms with complex technology portfolios and large, core IT departments. The big challenge for a small company is to build the foundation for a cloud future. Creating this foundation can be daunting and requires a bold vision, significant reorientation, and initial investment. “We’re grateful to Microsoft for helping us formulate a feasible architecture and showing us that we can build what we need with a small team,” says Borowski. “The grid size and complexity of our business is now comparable to the big players in our industry. Azure is helping us access our massive potential.”

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