CW500 Interview: Betfair IT goes global

In his first 16 months as chief technology officer (CTO) at gambling firm Betfair, Tony McAlister has led deep organisational change within IT accompanied by a strong focus on international expansion as the company gears up for football's World Cup.

In his first 16 months as chief technology officer (CTO) at gambling firm Betfair, Tony McAlister has led deep organisational change within IT accompanied by a strong focus on international expansion as the company gears up for football's World Cup.

The betting exchange hired McAlister, a seasoned technology manager with years of online and mobile expertise, in January 2009 and gave him the task of turning the business into a global company and a 'destination workplace'.

Since then, some functions that weren't previously part of IT - such as web user experience, project management and enterprise product teams - are now aligned with the 650-strong technology department, but the move was planned carefully.

"I spent about six months without making any organisational changes, which is a bit novel, as people expect that a new CTO will come in and start changing everything. But I wanted to take some time to analyse the problem and then start making those modifications," McAlister told Computer Weekly in an exclusive interview.

"We were always involved in the deployment activity, but now we own whole processes. By creating consistent teams, we now have a lot more clarity about who is responsible for what," he said.

Offshore development

As part of the process, McAlister launched a global recruitment programme to hire his senior management team, which is now includes former executives of online payments giant PayPal and financial services firms such as Barclays.

In other changes, Betfair's quality assurance team was removed from development so core competencies could be improved as well as career paths. IT security staff also have new leadership and they are being upskilled.

Betfair's plan is to establish centres of IT excellence in London and California. McAlister had previously indicated his desire to set up a web development centre on the west coast of the US and newly-acquired interactive horse racing network TVG Network earlier this year will bring the firm closer to that goal.

Since the acquisition of Los Angeles-based TVG in January, changes in management were also introduced to bring the company in line with the global business and the plan is to enhance its capability for online, mobile and TV-based betting.

Meanwhile, Betfair will continue to develop its Cluj captive development centre of 100 people and turn it into the 'Romanian silicon valley'. A senior manager has been recruited to lead that process and the site will hire about 50 staff this year.

McAlister will continue to offshore commodity tasks to India when needed, but he concedes the country is losing its appeal as prices inflate.

"India is not as economically viable as it used to be, also because everyone is there. Unless you will employ thousands of people, you are a small fish in a huge pond," he said.

"I have a different view of outsourcing than some of my peers. I will look at India and China when I need to, but I want the top talent to do the jobs I need in-house."

Betfair already outsources work to unusual locations such as Costa Rica and Malta and is also looking at mobile skills in Singapore, Tokyo and Seoul, while hunting for talent in web and social media in the Bay area in the US.

McAlister maintained that he was not going abroad to save money - though he will, for commodity development - but as regulations on online gambling ease worldwide, the IT department has to be geographically spread.

Immigration cap

This strategy will mitigate any challenges posed by the Conservatives manifesto pledges to put a cap on migration outside the EU, though McAlister believed the new coalition government policy will increase the IT skills gap in the UK.

Alongside the team organisation aspects of his job, McAlister also has a busy project agenda. Technical work has involved a revamp of back-end infrastructure as well as progress on the business's jurisdictional IT platform and innovation activity with TV, mobile and online gambling ahead of the World Cup.

The CTO's main challenge this year will be to keep the technology set-up running smoothly during the international football competition, which is expected to put significant pressure on the company's IT, and finding the people to help him on the journey.

"Changing the organisation to become a more web-centric company and deal with the changes and regulations are tough challenges. The jurisdictional architecture will make it easier but I am still working on it, so I have to find ways to get through that problem and getting the team focused on being able to deal with new countries opening up," he said.

"In order to do that, I will need to hire talent. The majority of them will be here [in the UK], but having the right skills in the proper place is absolutely key."

Betfair IT project agenda: back-end agility and customer-facing innovation

Increasing infrastructure capacity and speed

The technology supporting Betfair's IT systems was heavily under pressure after the Grand National in 2009 because of a high volume of new customers, so a transformation programme dubbed Performance 2010 was introduced. Under the project, now nearing completion, the firm sought to replace "virtually every piece of kit" such as network, hardware and software.

As part of the project, Betfair replaced legacy Sun SPARC database systems running Oracle, with horizontal, scalable Linux boxes also running Oracle. With the new set-up, capacity was improved by more than 50% and running cost decreased by 20%.

"Usually, companies would take 18-20 months to do something like that, but I gave the team nine months to do it, as it had to be ready in time for Cheltenham 2010," said McAlister.

"Some competitors had problems during the horse racing season, but it went through smoothly and we are now ready for the World Cup. That was a huge changeover though and a bit frightening, as it is the infrastructure the company is sitting on. The team did an amazing job and I am particularly proud of this project."

Developing a 'jurisdictional IT architecture'

Ahead of regulatory changes on online gambling across a number of countries, Betfair has started a three- to four-year project aimed at building a 'jurisdictional IT architecture'.

This involves rebuilding code to allow for flexibility and a 'plug-and-play' approach to IT architecture, which is being built around application programming interfaces (APIs) and modular databases.

"The changes on Performance 2010 are helping and having the horizontally-based infrastructure makes it less complex to change the software architecture," said McAlister.

"We are in the middle of the project and the goal. Right now it is possible to move into different jurisdictions - but that is a challenge - so the new set-up will allow us to be a lot more flexible."

Strengthening enterprise platforms and data warehousing

Enhancing customer relationship management and enterprise resource planning as well as human resources platforms is now taking place - the firm is now in the middle of a supplier 'beauty contest'.

Betfair also wants to use its data more efficiently and McAlister said work has been done to put a logical data model in place as well as business intelligence strategy and these projects are due to complete in May.

"Because we are a web company, all we have to operate on is the data inside the computers and because we are an exchange, we are very statistical so we want to improve the way we manage our data," he said.

Developing customer-facing initiatives online

Ahead of the World Cup, Betfair will seek to change the feel of its website to cater for the mass market. According to McAlister, the exchange experience is aimed a niche exchange gamblers, so the website will need to be "a little less day trading and more web-like".

Usability work is taking place to determine the extent of the changes, as well as work on the database set-up and the business processes underneath. Some alterations will go live before the football tournament, some after.

Betfair will continue to invest in the further development of complex event processing (CEP). Earlier this month, the firm used CEP to monitor and react to customer behaviour during the general election on its website as UK voters went to the polls.

"We are an event-driven company and the architecture should also be that way. We have continued to fund a large research team looking at application of future technologies. For example, we are becoming a leader in the application of event-driven technology and the election was a way of showing it," said McAlister.

Ongoing work on digital TV and mobile

Development of TV- and mobile-based betting are also at the top of the priorities for Betfair's research team.

Earlier this year, the company launched a Yahoo! TV widget engine which enables betting on digital televisions and work in that area is ongoing.

"The web is our home, but the convergence of the internet and TV is a huge channel for us - as is mobile - so we are putting a lot of energy behind those," said McAlister.

This month, Betfair has also launched its first iPhone app.

 

Global companies require global IT resourcing

The new coalition government's plans to put a cap on migration outside the EU will contribute to worsening the IT skills gap in the UK, but Betfair's global IT resourcing approach will help mitigate the risks related to possible restrictions in access to talent, according to McAlister.

"Part of my strategy helps eliminate that problem. If I can't legally bring new talent into London because of an immigration cap, I will put them somewhere else," he said.

"London is the third most expensive city in the world, so it is not always cost effective to hire people and bring them here. It might just be better to hire them and leave them where they are.

"Betfair is a global company - our physical headquarters just happen to be located in London - and I am setting my people up in such a way that our operation is the same anywhere in the world."

McAlister said there is the talent in the UK needed to run and build an exchange for the gaming industry and that if he led a similar company based in the US looking to hire that type of people, he would come to London to hire them.

He added that despite his international focus, he is looking to help the UK IT industry and hire as many people as he can locally. The gambling exchange is now hiring web usability experts and designers, online research staff, IT architects and Java developers, as well as DBAs and database developers with expertise in Oracle and SQL, network engineers and Linux experts.

Betfair is also placing focus on graduate schemes for major London universities but McAlister wants to extend the scheme to other universities outside the capital.

However, the CTO maintains that he might be setting a precedent for companies seeking IT talent and will encounter obstacles related to immigration restrictions imposed by the government.

"[The UK] is home for Betfair, so I want to grow this as much as I can. At the same time, I am doing what is best for my company and for it to be as effective as possible, so I can't let changes in laws and regulations stop me from recruiting the best talent."

This was last published in May 2010

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