Last week Microsoft announced the first technical preview of Azure Stack, the hybrid cloud platform which allows you to run their public cloud software in your data centre. They are not the first to offer private cloud technology, cloud in your data centre, nor even the first to offer hybrid cloud, the ability to use private and public cloud in an integrated way. It is interesting though that they are looking to differentiate themselves from their main competitor, Amazon AWS, by stepping into hybrid cloud, making them the first large public cloud provider to offer a private option.
There is an active debate about whether private cloud has any place in the future. Proponents of the public cloud will say that the argument for private cloud is based on the false belief that private cloud offers more control and security than public cloud. Those favouring private cloud would counter than while this might be the case at some point, public clouds are still developing their services and proving their ability to run workloads involving highly regulated data and mission critical core systems. It is also likely that large enterprises can attain the scale and cost advantage of public cloud on their own infrastructure while maintaining the ability to customise security and other factors in line with their needs. In reality all enterprises are and will use public cloud for some workloads, but as yet there are few who will look to lead with core Life and Health insurance systems.
This debate mainly surrounds IaaS clouds like Azure and AWS, where there are at least the options of building suitable systems from the individual infrastructure services provided. The debate though also leaks into SaaS, where the whole software and hardware stack is provided by a software supplier. In the main this model has been provided on a one-size-fits-all model, everyone gets to share the decisions made about security, availability, reliability, upgrades and other important factors. This works well in a mass market model, but some enterprise suppliers are now offering customers the ability to take more control of their SaaS platforms. This seems inevitable and healthy, where different industries and workloads have different requirements.
Today’s reality for the insurance industry is that the vast majority of systems run on private infrastructure and even the most ardent cloud supporters will acknowledge that moving to the cloud will take many years. In order to manage this transition, it’s very helpful to have a variety of cloud options so the needs of today can be met without disruption on the way to full cloud. While we can say that ‘full cloud’ of one form or another is the destination, we just don’t know what proportion of this will be public, private, hybrid or SaaS, especially for core insurance systems.
In many ways it’s a question of commercial bundling. Do we want to buy our data centres from the same people who supply our cloud platforms, and do we want application vendors to package the stack on an application by application basis connected by the public internet? Only time will tell. In the meantime it’s good to have options.