“We decided to be far more open about the ability to accept
transactions in a format defined by the ISO [International
Organization for Standardization], so that anyone could connect to our systems,” he explains. That initiative sent ripples
throughout MasterCard and beyond. It shaped the way the
company approached software development and guided IT
along a path of developing systems that “put intelligence at
the edge of the network.”
Instead of simply routing transactions directly into central
processing facilities, MasterCard has built a hub-and-spoke I T
environment that directs transactions to the point at which
they can be processed most efficiently. This rules-based architecture, which uses both mainframes and PC-based servers
(along with proprietary software), monitors performance in
real time, thereby avoiding slowdowns and other network
bottlenecks, while steering clear of local bandwidth limitations and fluctuations. “This best-of-breed approach gives us
the best of both worlds,” Reeg points out.
MasterCard was the first card issuer to implement VPN
technology, which it still uses widely. However, Reeg is now
and consolidation strategy. In 2003, the company began
deploying VMware in the data center and across its network.
“We’ve been able to shut down a lot of inactive computers and
become more green,” Reeg says. Virtualization has also helped
reduce administrative complexity and trim energy costs.
The flexibility of the I T environment allows managers and
business analysts to build data marts quickly and make all the
information accessible through a client-server architecture
on the front end of the business. Such flexibility and agility
are essential, Reeg notes.
MasterCard analysts can examine current trends, patterns
and changes at any given moment, enabling the company to
adapt quickly to changing business conditions. It also continues to develop more advanced scoring models, algorithms
and real-time risk products by putting its data to work in new
and sophisticated ways.
steering the company toward the next generations of secure
transaction processing by turning to Multiprotocol Label
Switching. He expects the technology to simplify data center
management by reducing the number of physical hubs the
firm operates—all while incorporating more sophisticated
risk-scoring algorithms. At the same time, Reeg is embracing
a service-oriented architecture to simplify the management
of software assets and build a more agile IT environment.
The firm’s 25,000-square-foot global technology operations center, located in O’Fallon, Mo., is a model for state-of-the-art systems, including several z/OS IBM mainframes and
hundreds of IBM AIX, Sun Solaris and Microsoft Windows
servers. The data center currently holds more than 100 terabytes of data, using both Oracle and IBM DB2 databases,
with more than 1.8 petabytes available overall.
MasterCard uses IBM Tivoli systems management software, along with applications from BMC, CA and EMC to
manage the environment. It also relies on network-attached
storage and storage area networks—as well as virtual tape
devices from EMC, Hitachi Data Systems and others—to
provide business continuity and disaster recovery.
Not surprisingly, the enormous size of the data center,
along with the growing demand for processing power, has
prompted MasterCard to aggressively pursue a virtualization
LEADING THE CHARGE
Despite its success, MasterCard faces some business and IT
challenges. For one thing, it faces stiff
competition from Visa International,
the world’s largest issuer of credit
cards, which went public with an initial public stock offering in February
2008. That milestone instantly moved
MasterCard into the second spot
among publicly traded card and payment processors. (MasterCard went
public in May 2006.)
The firm also has faced legal challenges from rival American Express
over alleged monopolistic practices. In
addition, it must cope with potential
regulation in Europe, where officials
have clamored to cut the company’s
commissions on transactions.
However, Reeg believes that the biggest roadblock to
future success is the shortage of IT talent and the growing difficulty of filling certain positions. On the upside, “MasterCard
is a global organization, and we are able to leverage IT talent
all around the world,” he observes. “But there’s no question
that the goal of landing top IT talent is becoming tougher
every year. We also see fewer and fewer minorities and women
filling technology-related positions—a trend that cannot continue indefinitely.”
Nevertheless, MasterCard is charging forward and redefining the future of payments, transactions and interactions.
Reeg knows that it’s essential to build out and maintain an
IT framework that allows the company to stay ahead of its
competitors, including Visa, American Express and Discover.
More importantly, MasterCard must ready itself for ongoing
change and the whims of a fast-moving marketplace.
“The industry is undergoing a remarkable transition,”
Reeg concludes, “and it’s up to us to use IT to take advantage
of this opportunity.” 3
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