Meet the Internet’s Newest Cloud Startup: Goldman Sachs?

Goldman Sachs is one of the world’s biggest investment banks, but it is arguably also a major technology company. About a third of the firm’s employees are engineers. With hundreds of thousands of cloud computing processors working on its behalf, Goldman crunches more data each day than many Internet companies.

Don Duet is co-head of Goldman’s technology division and has largely been responsible for developing and executing the firm’s cloud strategy. Mr. Duet also co-chairs the groups at Goldman that make decisions about investing in Internet, clean technology and renewable energy companies.

As investment banking profits shrink, the big players are turning toward the cloud as both a cost-cutting measure and a way to comply with tightening regulations that require them to supervise communications among traders. Goldman has been using an internal computing farm for a decade. JP Morgan said this year that it is now running 2,000 of its applications in a private cloud, and Morgan Stanley is reportedly considering a big push toward internal clouds as well. Mr. Duet says Goldman’s grand vision for the cloud is a day when computing infrastructure becomes so commoditized that it can be traded frictionlessly on an open market, like barrels of oil or pork bellies.

Last month, Goldman led a group of 14 financial institutions to invest $66 million in Symphony Communication Services Holdings, which in turn bought messaging startup Perzo. The intent of the project is to create a secure, cloud-based messaging service, and Goldman contributed the code from a system that it’s been using internally for several years. The new effort would connect the country’s major banks and possibly displace the $20,000-a-year terminals provided by Bloomberg that are ubiquitous in the financial world. Security is a key driver. Last year, Goldman and JP Morgan brought complaints that Bloomberg’s news operation had snooped on the company's terminal users.