A key benefit of a software-as-a-service deployment is scalability. Indeed, employing well-designed SaaS solutions can offer near linear scalability. The benefit comes not only from the platform and infrastructure design. Sometimes overlooked, the software design itself also plays a big role.
The value of platform level scalability is mostly well understood. CIOs are often challenged to meet both the scalability and availability requirements for their operations, particularly at small scale operations, because highly reliable and scalable hardware and operating environments are not cheap to create and maintain. Traditionally, large companies have enjoyed the advantages of high scalability and the ability to spread the associated costs and benefits across a larger number of users and transactions. SaaS providers, however, can bring the scalability profile of large scale operations to their small customers by sharing most of the burden of investments in infrastructure and operations.
Other advantages of a full scalability profile include the ability to add computing resources at a finer granularity as required to meet service level agreements, and leverage state-of-the-art practices in database, operation and network scalability (e.g., server or database clustering) and reliability (e.g., redundancy, fault-tolerant design, and active monitoring).
For software to take advantage of this high-performance platform, it must however be fully Web service enabled with an optimal service-oriented architecture and component design that enables application profiling and scalability at the level of specific application services instead of servers. Individual services should be able to be added as necessary to the application server to remove bottlenecks, as opposed to merely adding servers. For instance, if a premium calculation service is slowing the quote process, adding additional instances of the premium calculator service to the application server can remove the bottleneck.
All these good design practices contribute to a very desirable feature of cloud computing – elastic scalability: the ability to scale up and to also scale down according to business workloads.
For more information about SaaS insurance core systems, download the white paper: How to Evaluate Core Systems in the Cloud: SaaS for Policy, Billing and Claims.
Rick Koo is SVP, Engineering, at Exigen Insurance Solutions.