BlackRock uses Azure to strengthen Aladdin, its investment management platform

A passion for individual success and corporate responsibility

BlackRock, the world’s largest asset management firm, manages a portfolio of more than USD10 trillion, as of January 2022. The company is a fiduciary to enterprises and governments around the world, but what drives its work and inspires its employees each day is making positive human and social impacts. 

“We’re a purpose-driven company, and we take our commitments to social and environmental responsibility very seriously,” says Lance Braunstein, Head of the Aladdin Product Group at BlackRock. “We help millions of people invest to build savings that serve them throughout their lives—that could be a teacher or a firefighter who has worked hard their whole career and is looking for dignity and comfort in retirement. We do this for them.” 

Within that mission, Aladdin is BlackRock’s unified investment and operations solution, built to meet clients’ financial planning needs. “Aladdin is an operating system for investment managers,” explains Braunstein. “With it, you can construct portfolios, trade in and out of those portfolios, manage risk, and take care of administrative requirements, like accounting, reporting, and compliance. Aladdin promotes transparency and lets investment managers focus on delivering results for their clients rather than worrying about technology.” 

A move to Azure for innovation and digital transformation 

Historically, BlackRock ran Aladdin on-premises from its own corporate datacenters, and while this provided fine-grained control over all aspects of the infrastructure, that control came at a cost. It could be expensive and time-consuming to provision and administer new hardware to onboard new clients, create new environments, or respond to spiking demand—such as during periods of market volatility or when a major financial index undergoes rebalancing. 

BlackRock also faced increasing demands for in-country or in-region datacenters to address client preferences, system latency goals, and regulatory requirements around data sovereignty. Building new datacenters is no easy task. These needs helped spur BlackRock to investigate moving Aladdin technology to the cloud to gain scalability, flexibility, a more widely distributed geographic IT presence, and the possibility for new innovations that go beyond what an on-premises infrastructure can support. 

When it came time to choose a cloud provider, BlackRock looked at the major players in the field and did extensive evaluation before forming a strategic partnership with Microsoft and establishing a plan to migrate the Aladdin platform to Microsoft Azure. Ultimately, BlackRock made its choice based on three key factors. 

“First, we wanted a partner that could offer global reach and significant local presence, and the Azure network of datacenters provides that,” says Joseph Chalom, Head of Strategic Ecosystem Partnerships for BlackRock. “Next, we liked the high level of security built into Azure—the Microsoft investment in physical datacenters, infrastructure, and security operations is second to none. Finally, we were looking for a long-term relationship with a company whose values align well with ours at the enterprise level, and Microsoft’s commitment to social responsibility and climate sustainability overlapped our own in many ways.” 

Adds Braunstein, “In selecting Microsoft and the Azure platform as our cloud, we thought about the fullness of how the Aladdin platform operates from a compliance perspective, from a legal perspective, and from a third-party vendor perspective before making our decision.” 

Well underway on its migration, the company has already experienced the technology and business benefits it sought. “We can spin up a new client environment in weeks, rather than quarters, because of the elasticity and global reach of Azure,” says Chalom. “That helps us bring innovative new solutions to market faster and to sell Aladdin technology in regions where we didn’t have local datacenter capabilities. And it’s opened up client segments that weren’t available to us before we moved to Azure.” 

BlackRock employees and customers also benefit from the consolidation of Aladdin resources into Azure. “Having cloud-native ways of managing data and combining datasets lets us pinpoint what we’re looking for,” says Chalom. “This allows massive innovation for our customers, who are seeking not just better investment performance, but also better risk management capabilities in their portfolios.” 

A thoughtful migration and a promising future 

Those managing the Aladdin platform move to Azure have taken a thoughtful, patient approach, involving stakeholders from all areas of the business. “One of the keys to a successful migration has been bringing everyone to the table to make decisions,” says Braunstein. “We included leadership from technology, engineering, information security, internal audit, legal, compliance, finance, and vendor management. A cloud migration is a monumental technology change, and we wanted everyone to feel engaged and invested. This isn’t just a technology project, it’s a business transformation.” 

BlackRock chose to perform the lift-and-shift migration on a client-by-client basis. It has moved about two-thirds of the Aladdin client instances to Azure, with plans to move the remaining instances by June 2022. The company took its time with premigration planning and preparation to ensure that everyone and everything was organized and prepared. Over the course of six months, the technology teams built a pipeline so they could migrate clients from on-premises to the cloud very securely, at scale, and in an automated fashion. Their work has resulted in migrations that get completed according to plan, on time, and without significant errors. For clients, the change has been transparent—they still access the same great Aladdin tools, only now those tools live in Azure. 

For BlackRock, the migration also heralds exciting new opportunities for the financial services world. Traditionally, the industry ecosystem was very fragmented, and communication between different stakeholders—such as custodians, asset managers, investment banks, and trading organizations—was often inefficient. Now that is changing. 

“We believe a financial services ecosystem and cloud should be highly integrated, operate efficiently in real time, and provide transparency into data and processes,” says Chalom. “Moving Aladdin to Azure gives us the foundation to build that ecosystem in a robust and operationally stable way that will benefit all participants and help us work collaboratively together to meet our clients’ goals.” 

As the company looks back over its success so far and toward its future in Azure, BlackRock leaders feel confident that the investments in time and technology will deliver ongoing benefits. 

“We chose Azure because we anticipate scaling for many years, with a focus on the long term, and we anticipate the world being more volatile, complex, regulatory, and local,” says Chalom. “For us to expand and meet our client demands as a fiduciary, we need a cloud platform that will be fast, resilient, and innovative for the long term. Azure is that platform, and we look forward to growing together with Microsoft.”

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