CIO interview: Tony McAlister, chief technology officer, Betfair

European gambling regulations, launching new products and driving revenue growth put enormous pressure on the IT team at Betfair

European regulations for the gambling sector, launching new products and driving revenue growth as a recently floated public company put enormous pressure on the IT team at Betfair.

But chief technology officer (CTO) Tony McAlister, in post for over three-and-a-half years, talks with confidence when taking stock of the team's achievements and looking at what is coming next.

“I think I have done most of the things I said I was going to do when I joined. Being able to do what I said and seeing the benefits has allowed the company to feel good about what I am doing, as well as me being here,” McAlister told Computer Weekly in an exclusive interview.

But the CTO concedes that the job is far from easy – in fact, it has become more complicated since McAlister joined Betfair, then still a private company mostly focused on the UK market.

“In the EU, each of the countries regulate online gambling in a different way. I have to make changes in the systems where customers’ information and money is kept to allow for unique things like the national ID cards in Spain, which I don’t have to account for in Italy, for example,” says McAlister.

There have been numerous situations where the IT team has needed to support regulatory changes, such as Italian regulators wanting to see bets taking place in real time so they can approve them, which meant establishing communications between Betfair and the authorities in Italy. Authorities in Denmark want information on bets to be placed in a safe location in case the government needs to access it, and authorities in Spain are going down the same route.

Dealing with those changes could easily consume all of Betfair’s resources and budget, according to the CTO. To control that, the company built what it calls a “jurisdictional architecture”, a project completed in April which broke the IT architecture down into various country-related components.

“It was a big re-architecture exercise, which we did while running a high-growth business. At times, the project was challenged either by product implications or regulatory issues, but we did get there in the end,” says McAlister.

“That allowed me to separate the complexities within our system and enable independent deployments and changes, depending on what has to be presented to the customer, while ringfencing some of the resources and people working on the various projects,” he adds.

Most people using our mobile applications have said they will never touch a desktop computer to use our website again

Tony McAlister, CTO, Betfair

Building a jurisdictional architecture

Since everything in Betfair’s architecture from hardware to code was UK-focused and intertwined, the team spent three years rebuilding the set-up and moving it to a services-oriented architecture (SOA).

“We broke the architecture down into hundreds of pieces and re-layered application programming interfaces [APIs] between our front end, middle tier and back end. That way, we can modify our API based on the changes that need to happen – if the change is at the back end, the front end will stay the same,” says McAlister.

Betfair’s mostly bespoke set-up is based on Java, but also relies heavily on an Oracle database, as it is “the fastest, most scalable database out there", according to the CTO, who adds that his PL/SQL capabilities also had to be scaled up.  

McAlister needed more database licences, and a renegotiation with the supplier took place. The IT chief says he ended up doing a very good deal with Oracle as an Oracle Financials suite was thrown in as part of the deal. The roll-out of the finance system, which included integration with an SAP HR platform, ended in July.

“Often companies mention migrations of a large financial system as their major project for the year. For us, it was something we did at lunch,” he says.

On the hardware front, the gambling company had a significant fleet of large Sun servers, which were replaced by HP kit. The company also consolidated its previous six datacentres down to two, now based in Dublin, which makes the network easier to maintain.

Big data focus

As the company grew internationally, adopting a customer relationship management (CRM) system became an increasingly important consideration for McAlister. The IT team went through a quite exhaustive request for information, where all alternatives, from SAP and Oracle to niche providers, were considered.

“In the end, we decided to park that project for now, but I have created a team to make changes to our bespoke CRM system to make it more user friendly for the teams that need it. We will possibly revisit that decision, but not for now,” says McAlister.

But he says Betfair’s IT team has done extensive work in its data warehousing set-up under a new project dubbed Betfair Information Management (BIM).

“We used to just keep everything, all data in a box and don’t pay too much attention to it – but that becomes unscalable and also a managerial problem for me,” the CTO says.

“We redesigned our data layer with a logical data flow and are building a new data warehouse on top of that, which will allow us to keep less data and enable us to make the information more efficient for internal uses, particularly for the fraud and customer service teams," he says.

Betfair is using Ab Initio software to extract, transform and load data, and the CTO very pleased with the results so far.

"I am struggling to get people with skills for that, so we are using Ab Initio consultants to show our people how to use the tools. We already deployed as much of the data warehousing project as we can in an agile fashion across some of our products and are looking to finish this by the end of the next fiscal year," he says.

Often companies mention migrations of a large financial system as their major project for the year. For us, it was something we did at lunch

Tony McAlister, CTO, Betfair

Website improvements

One of McAlister’s main areas of focus over the years has been to make Betfair’s websites more user-friendly and relevant to the mass market. Until recently, the company’s websites were running on designs from several years ago and some features and key pages were taking 20-27 seconds to load on a standard computer.

The CTO brought in architecture specialists who worked on the company’s mobile websites to revamp the web portfolio. According to McAlister, so far all sports programs are running on the new architecture and loading time is under three seconds.

“This process gave us the chance to make changes to the website more like a web company does – what used to take months and weeks now takes days, if not hours. That speeds up my delivery to the customer and makes my developers much more efficient,” he says.

“I had people saying to me in the beginning that I was turning Betfair into a web company and they thought I was crazy, but we did not operate as a web firm before and changing the architecture has allowed us to do a lot more."

Sports book applications will also rolled out across the site and merged into the betting exchange, giving customers the ability to have an exchange or sports-book bets as they see fit.

A new iPad program is also due to be launched, with all the betting exchange functionality that is available on the web.

Growing the team

Betfair now employs 800 people in IT across the world – up from about 600 in 2009. During that time, its Romanian team, which initially dealt mostly with testing, has grown from 60 to 220 people and now works on all aspects of the company’s IT.

All offshore teams cover mobile – half of all Betfair customers in the UK and Ireland placed a mobile bet in the first quarter of the year, driving the volume of bets up 114% and generating a 98% increase in revenue, so that area is very important for the company.

McAlister also created a small team in San Francisco to work specifically on mobile applications – which is ironic given the US restrictions on online gambling.

“My employees cannot bet real money using the product outside the office as it is not legal in the US, but they have been able to use their unique skills in developing mobile apps that have won every award going and driving our huge growth in mobile,” he says. “Most people using the exchange in our mobile applications have said they will never touch a desktop computer to use our website again.”

The company also opened a development centre in Portugal this year. The work was initially carried out by Blip, a small third-party firm focused on sporting systems, recently acquired by Betfair. What started with 24 people has already expanded to 48 staff, and the aim is to have 80 people in Portugal by the end of the fiscal year.

“[The offshore operation] allows me to use very localised talent for very specific things – and somehow it allows me to lower my cost base considerably while bringing a lot of cultural activity and ideas into the company,” says McAlister.

What about the UK? The IT team in London has shrunk considerably, and the CTO says that good talent has always been a struggle to find in Betfair’s homeland, although things have become easier.

“I don’t want to say that we have cracked the issue of recruiting in the UK, but we have gone a long way towards making it less problematic than it was, partly due to offshore locations allowing us to go after talent elsewhere and not have as many people in the UK as originally intended,” says the CTO.

New leadership

Breon Corcoran, previously chief operating officer at Irish bookmaker Paddy Power, took over as Betfair chief executive last month. How does that compare to the previous CEO, David Yu, who had previously been the CTO?

“What I have seen in the first few weeks is that Corcoran will be as supportive as David was. Even though David was a CTO and we had a bit of a shorthand conversation with each other, my understanding is that IT reported to our new CEO at Paddy Power, so he is pretty switched on about what you can and can't do with technology,” says McAlister.

“He has already challenged me a bit on certain things, which I appreciate. At the same time, he has made the statement that Betfair's tech footprint is what attracted him to the job in the first place," he adds.

“Paddy Power is a big company and a strong competitor, but we have something that it doesn't have. So I feel I already have a lot of support from the new CEO and am pretty thrilled about what the future holds. It is going to be different, but I am looking forward to it.”

Despite having to keep up with his balancing act on regulations, keep the company running and stay ahead of the competition, McAlister says the job remains his most interesting role so far.

“I am not sure if I expected to still be here [in 2012] back when I joined, but right now I feel as if I've just started and I'm just as excited as I was back in 2009.”

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