Think you have heard all you need to know about the benefits of cloud deployment of enterprise solutions? Get ready for more because cloud is finally in season and bearing good fruit for insurers. The latest news is Amazon Web Services (AWS) announcing its financial services competency program to the marketplace, indicating a strong focus by one of the largest cloud providers on an important vertical. EIS is pleased to have been a launch partner for the initiative. So what is the significance of the AWS move? Industry observers were quick to weigh in on how it influences insurers’ choices and approaches for core systems in the cloud.
But first, what is AWS now offering to insurers via the competency that it didn’t before? In short, and in AWS’ words, the AWS Financial Services Competency establishes standards and provides assurance to carriers that program members like EIS possess deep expertise in the AWS platform, and that their solutions have undergone security, performance and reliability assessment. Designees must demonstrate technical proficiency, the ability to deliver solutions seamlessly in the AWS Cloud environment, and have proven customer successes. Microsoft provides a similar program for users of its Azure cloud offering.
A Time for Cloud Confidence
In the opinion of Rob McIsaac, SVP of Research and Consulting, Novarica, shared with Insurance Innovation Reporter, “The AWS certification is a significant development, giving CIOs increased confidence of the [core system] platforms ability to effectively operate in this environment. While many applications can and have been made to run in a cloud environment, the certification provides an additional level of confidence as carriers make critical investment decisions.”
“The real question for core policy administration systems and suites was not if they would be delivered as cloud-based solutions, but when,” explains McIsaac. “The move by EIS to deploy the solution on AWS is, in our view, a significant development which expands the set of functional offerings that carrier CIOs can select while moving from Legacy environments to solution sets which are both more flexible and more easily linked with business activity.” McIsaac added, “I think the differentiation point may be the great issue for now—it may take other vendors some time to get themselves re-architected for cloud-deployment.”
Moving to Cloud-first, then Cloud-only
Donald Light, a director in Celent’s North America insurance practice commented, “I think the practice of certification will accelerate the movement of insurers putting core applications in the cloud because it provides another form of reassurance that it’s safe, and that potential major risks involved have been mitigated.” Light told Insurance Innovation Reporter that he foresees the “point of equilibrium” where a majority of such systems are in the cloud as still several years in the future. “Certification programs, such as AWS Financial Services Competency are one factor that will bring that equilibrium point a little sooner.”
The point of equilibrium may be a lot sooner than many expect. Research firm Gartner predicts cloud technology will continue to grow in importance to the enterprise, with more businesses using cloud than not using cloud by 2020. “By 2020, a corporate “no-cloud” policy will be as rare as a “no-internet” policy is today. Cloud-first, and even cloud-only, is replacing the defensive no-cloud stance,” Gartner’s report on predictions for 2020 states.
It’s Summertime for Solution Vendors, Christmas for Customers
Deploying enterprise core software can be a long, hard season of painstaking team work. Anything that can automate and simplify the process is like a sunny day…a welcome respite.
To that end and from the lens of a partner that has met the new standards, the program provides access to technical expertise that allows EIS maximum leverage of native cloud services that accelerate the time to value of our solutions by customers, and deliver heightened levels of reliability and security. It also relieves our need to maintain some duplicative services.
Security, in particular, is a special kind of gift to customers. Today security, which was once considered to be an Achilles’ heel for cloud providers, is a true strength of the AWS offering. AWS continues a tremendous investment into its security service, to a degree that not even a large and sophisticated enterprise customer can afford to sustain. Integrating with a set of AWS security services allowed EIS to inherit these capabilities into our application to bring certainty to our customers.
Other brightly-wrapped packages include a massive reduction in infrastructure costs and sterling support for DevOps. Customers have reported reductions in infrastructure costs from 40% to much greater. AWS Cloud also supports our accelerated deployment approach via a cloud-based dev/test/deliver methodology that leverages real-time parallel testing. One customer achieved a regression testing time reduction of over 90%.
It’s a gift that keeps on giving. If customers can leverage the full cloud-based continuous integration and continuous delivery platform in post-production, the solution support costs are sharply reduced while product and system upgrades happen much quicker.
Not Created Cloud Equal
I see huge momentum in the marketplace for cloud deployment as carriers look to make their technology investments more adaptive to changes in their business cycle and priorities. My caution to carriers is that not all offerings are created cloud equal. For instance, complexity of the deployment model of some core systems solutions may not be conducive to the cloud deployment model. Pick the season’s best. Selecting a member of a competency program, such as AWS’, increases your odds of cloud success.
Glenn Lim is Senior Vice President, Cloud Product Marketing and Alliances.