Michael Quinn, Chief Technology Architect, FINEOS
We live in a world where Information Technology is transforming how we live and work. Today’s mobile phones are more powerful than supercomputers from the past. Even more fascinating is that our mobile phone can connect to exabytes of data in a highly interactive way. Warren Buffett has recently stated that he would give up half his wealth (around $25bn) rather than give up access to the Internet, and that’s from a self-confessed technophobe!
Cloud computing is one of the key enablers of the transformation that IT is having on our lives. The Internet is being built on cloud computing services. Facebook, Twitter, Gmail, Hotmail, Dropbox, Flickr, Google Maps are just some of the applications used by millions every day as computing services delivered on-demand, at any time on any device. Many of these companies are no longer seen as IT companies, but rather companies that use IT to deliver new business models that weren’t possible only a few years ago.
What does cloud computing mean for the insurance industry? There are some particular concerns and challenges for insurers adopting cloud computing. Security and data protection regulations must be adhered to. Insurers have also invested heavily in IT and their own data centres, and will want to leverage their investment in IT as part of any cloud computing initiative. However, the opportunities that cloud computing gives insurers are too big to be ignored. Even if you ignore cloud computing it is unlikely your competitors are. Within the next 10 years the vast majority of business systems will be delivered using cloud computing. Some will invest wisely, others will not.
Cloud Computing Definition: Private cloud is when the cloud infrastructure is provisioned for exclusive use by a single organisation. It may be owned, managed, and operated by the organization, a third party, or some combination of them, and it may exist on or off premises. Public cloud is when the cloud infrastructure is shared by many organisations. It exists on the premises of the cloud provider. Hybrid cloud is a composition of private and public cloud.
What are the key decisions that you need to make now to get it right?
- Plan to transform your IT to deliver services using private cloud computing. You have the option of hosting private cloud in your own data centres, or using hosting providers’ data centres, or a combination of both. The choice will depend partly on how fit for your future computing needs your own data centres are and whether you want to manage your own data centres, bearing in mind that your future computing needs are likely to far exceed your current requirements as you seek to gain more intelligence from both structured and unstructured data. If your own data centres are falling behind in their ability to support your business, the cloud will allow you to turbo charge fast forward without huge capital expenditure.
- Keep your choices open. Choose a cloud platform that enables you to easily move from private cloud to public cloud, vice versa, and gives you the choice to use hybrid cloud. We are at the early stages of cloud computing and it is not clear who the winners will be.
- Adopt public cloud computing opportunistically as you review your IT systems in response to the needs of your business. Be wary of committing to a proprietary public cloud with no way, short of starting all over again, to move to a different cloud provider or a private cloud. Limiting the options open to you in the future could turn out to be an expensive mistake. Cloud computing technologies are evolving fast with a high rate of innovation; don’t get stuck with a cloud vendor who ends up in the slow lane.
- Look to leverage cloud computing for new opportunities that weren’t possible only a few years ago. Cloud computing offers many advantages as a delivery model for your existing IT systems, but the greatest value of cloud computing lies in leveraging cloud computing for new opportunities. In a future blog we will look at what these new opportunities might be for insurers.
The future may be cloudy (pun intended) but the future is cloud; have you a cloud plan?
