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Software, platforms and infrastructure solutions

The new world of cloud computing

A Microsoft Insurance White Paper

www.microsoft.com/financialservices

The information contained in this document represents the current view of Microsoft Corp. on the issues discussed as of the date of publication. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information presented after the date of publication. This document is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS DOCUMENT.

© 2011 Microsoft Corporation. All rights reserved. Microsoft and the Microsoft logo are registered trademarks of Microsoft Corporation in the United States and/or other countries. The names of actual companies mentioned herein may be the trademarks of their respective owners.

Microsoft in Financial Services

Financial services is a significant industry for Microsoft. Our commitment to

the industry comprises client-dedicated account teams as well as technology

and industry specialists. Our solution areas embrace most facets of the

industry, including client experience, risk and compliance, product

development and operating capabilities. The U.S. Insurance Group, led by

Alan Dulin, is responsible for developing financial services solutions by

combining Microsoft capabilities with those of our partners for our U.S.-

based insurance clients.

A message to our customers and partners

The insurance industry needs an evolved operating model, one that offers greater flexibility in terms of capacity, agility and costs. Cloud computing is such a model. It offers considerable magic; however, many mysteries still need to be resolved.

Everyone at Microsoft Corp. is committed to the success of cloud computing, and we believe it will create many new opportunities for the insurance industry as well as our own customers.

As part of our commitment to cloud computing, we believe it is important to clarify the magic and eliminate the mystery surrounding this technology. We hope the insights presented in this report will contribute to a wider discussion of these issues within the insurance industry and to the creation of a closer partnership between technology and insurance carriers to develop a more

successful outcome for both.

Yours truly,

Alan Dulin Colleen Healy

Director, General Manager,

U.S. Financial Services, Insurance U.S. Financial Services

2

Contents

Revolution or evolution? 3

Why cloud, why now? 4

Deployment and service models 6

Key challenges 9

Future developments 10

Getting started 12

Case study: AXA Seguros 14

Planning for the longer term 15

Revolution or evolution?

As a whole, the insurance industry has been steadily adopting basic cloud services, including email, CRM and collaboration tools. The companies on the forefront of innovation are adopting more robust cloud applications, including high-performance computing and business process modeling.

Cloud computing is generating value, and many providers are rushing into this space to offer a variety of services. Although many new and powerful applications are emerging, cloud computing is still a work in progress; it offers many benefits but also some important trade-offs to consider.

According to an article by Tom Pettibone posted on Insurance & Technology,1 “In the long term, a company can save 20 percent or more of overall IT costs by employing cloud solutions. Regardless of the economic climate, it is imperative for insurance companies to experiment with the technology.”

The best way to think about the opportunity: Evolution in the short term, and revolution in the long term. Cloud computing offers immediate benefits to insurance providers looking to increase their computing capacity, improve customer satisfaction and exchange capital costs for operating expenses. But governance, education and security standards need to catch up with deployment and operating models if the full promise of this new technology deployment model is to be realized.

Some industry experts have made analogies to the early days of the electricity industry. Years ago, many companies powered their operations solely through their own generators. Later, electric utility companies arose, allowing any company, big or small, to acquire electricity from a central provider, replacing sunk capital costs with variable operating expenses. Companies still have generators, but for backup and contingency purposes. Electricity has become a utility.

Should insurance providers be rushing to embrace this new technology? Cloud computing is certainly having an immediate effect, but adoption may depend on a number of regulatory and competitive considerations.

The demand for cloud services will vary by type of institution. Firms with high transaction volumes looking for low-latency solutions or those that experience large spikes or bursts in computing power, such as year-end renewals, quarter-end modeling or a major claims disaster, will find the cloud solution of flexible computing, variable operating expenses and speed-to-market particularly compelling. But all insurance companies will find in the cloud an opportunity to break out of a paradigm of legacy technologies and declining margins.

For electric utility companies, the change didn’t happen overnight, either. In fact, it took several years for them to become viable alternative suppliers. Like the early electricity supply companies, cloud computing is still in its early stages of development. However, it is a rapidly evolving suite of services, and as it grows in sophistication over the next few years, insurance companies really will be able to position their data centers and other mission-critical applications in the cloud.

1 Tom Pettibone, Insurance & Technology: Carriers Should Keep Up with Cloud Computing Advances, Challenges. http://insurancetech.com/show Article.jhtml?articleID=217100311 ©2010 United Business Media LLC.

“Regardless of the economic climate, it is imperative for

insurance companies to experiment with [cloud] technology.”1

The new world of cloud computing 3

Why cloud, why now?

From a technology perspective, insurance providers find themselves in a difficult position. A soft market has forced insurance companies to handle a growing number of accounts with a wider range of needs and with slimmer margins. Rising maintenance costs of legacy systems and tighter budgets leave fewer funds available each year for new

technology. Recent mergers and acquisitions have resulted in disparate systems and a lack of business fluidity. Greater compliance responsibilities and regulatory limitations only add to these pressures.

Traditional operating models struggle in this new environment. The current economic climate has resulted in excess capacity (particularly on the property and casualty side) and a desire for new products and services, better and more frequent analytics, and greater collaboration between carriers, agents, underwriters and claims. Continued market volatility and shifting consumer preferences necessitate changing business requirements and product priorities. These changes can be a nightmare for operations managers who often have to support the new operating requirements within a static and inflexible infrastructure.

The industry needs a new model of technology, one that allows business to bring products to market faster and cheaper, while also retiring obsolete ones; that enables quicker claims resolution to increase customer satisfaction; and that assists insurance companies in mitigating risk and risk profiles. Computing power must adapt quicker to shifting product portfolios. The value of scale is giving way to the need to be more agile and flexible.

The capacity-fixed cost structure of existing technologies is the insurance industry’s Achilles heel. It is ill-suited to support dynamic requirements. Also, as other industries embrace new technologies more rapidly than insurance, customer expectations rise and are harder to meet with outdated technology. Cloud computing offers a more flexible alternative approach and is particularly well suited to a model of variable technology consumption.

In the past, the insurance industry has been a leader in inventing new products and services. For every new business model or consumer product released, the insurance industry has had to come up with a new product, policy and risk assessment. However, a clear lack of technology modernization, along with an antiquated process of developing and testing new products to bring them to market, has been a serious challenge.

Migration to the cloud provides an opportunity to revisit existing technology architectures, retire legacy systems, add new technology and create a new operating architecture. Many large enterprises, not just in insurance, have technology infrastructures that resemble dense forests, with many applications that should have been retired a long time ago. In considering migration to the cloud, part of the business case should include an opportunity to prune the technology forest of its dead wood, allowing the younger, healthier trees to grow stronger. (See Figure 1.)

FIGURE 1Large enterprises have technology

environments that resemble dense forests.

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Cloud migration has the potential for significant cost savings over time. With the technology available today, economies of 50 percent or more are possible, depending on circumstances. Virtualization is one of the key benefits, providing significant flexibility to users. However, migrating from one deployment model to another will incur certain upfront costs. (See Figure 2.)

A lot depends on the type of applications and systems that are being migrated, the partners selected, and the deployment and service models being adopted. The economics of cloud migration vary with timing and circumstance. The pattern of IT spending during the recession has focused on relatively small, short-term projects with a quick – say, six months – payback. But as recovery becomes expansion, larger, more ambitious projects are likely to emerge, creating the possibility for much leaner operating environments.

FIGURE 2Potential costs and benefits of cloud migration

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The industry needs a new model of technology, one that allows business to bring products to market faster

and cheaper, enables quicker claims resolution and assists insurance companies

in mitigating risk and risk profiles.


Deployment and service models

In considering a cloud solution, insurance companies face an array of potentially confusing solutions. Some deployment and service models solve specific problems, some provide complete application development environments, and others provide partial or complete infrastructures.

They all have different trade-offs and address separate issues, and they are all rapidly changing.

The major deployment models include the following:

> Private. This term describes offerings that emulate cloud computing on private networks. These services are built behind a corporate firewall or within another secured network with access limited to the company itself. As such, this model suggests a more secure environment. These products can deliver some benefits of cloud computing, while addressing many of the key concerns, including data security, loss of control, regulatory limitations and the risk of the unknown. Some insurance companies use a private cloud environment to host key information such as agents and brokers’ earned commissions and other incentives (production bonus or persistency bonus). In a private cloud, the information is still behind a corporate firewall, but authorized independent agents or brokers working off-site can access it easily.

Private clouds have been criticized because users still have to buy, build and manage them, and they benefit less from the lower upfront capital costs that make cloud computing such an intriguing concept. In addition, a private environment still presents the issue of matching capacity with business demand (as each company is still purchasing servers and hardware) and inevitably results in too little or too much capacity at various times.

> Hybrid. This environment consists of multiple internal or external providers. By integrating multiple cloud services, users may be able to ease the transition to public cloud services while addressing issues such as the regulatory requirement of having data reside in the country where the business is conducted. An insurance company might use a hybrid environment to handle additional computing needs for limited amounts of time, such as during a sales promotion or when running extensive risk modeling. This setup allows companies to keep core computing on premises without having to invest in expensive infrastructure to handle the maximum peak usage.

Another perspective on deploying a Web application in the cloud is using hybrid Web hosting, where the hosting infrastructure is a mix between cloud hosting for the Web server and a managed dedicated server for the database server.

> Community. With this model, several organizations with similar requirements share infrastructure to realize some of the benefits of cloud computing. With the costs spread over fewer users than a public cloud (but more than a single tenant), this option is more expensive than a public cloud but may offer a higher level of privacy, security and regulatory compliance.

Insurance companies have choices in how cloud services are provided. Just about any

service model can go on the cloud.

6 Software, platforms and infrastructure solutions

> Public. This term describes cloud computing in the traditional mainstream sense, whereby resources are dynamically provisioned on a self-service basis over the Internet, via Web applications or Web services, from an off-site, third-party provider that shares resources and bills on a fine-grained utility computing basis. Cloud services are available from any provider, located anywhere, and are accessed through the Internet as on-demand services. This model, while offering the greatest cost reduction, could present insurance companies with concerns about security and the loss of control over day-to-day management. One way to alleviate concerns would be to put applications that are not mission-critical in a public cloud. For example, an insurance company that operates with independent agents might host channel performance data such as aging analysis, target versus actuals, daily or monthly production reports, and other key performance indicators.

Public cloud environments can be architected to offer a high level of isolation and security, certainly equal to any other managed service. Despite this, security is one of the most common concerns voiced when companies consider moving applications and data to public clouds. Cloud environments, when built correctly, can offer complete isolation between guests at the memory, CPU, storage and network levels. Some public cloud providers offer “hosted private clouds,” in which users are segregated onto their own physical infrastructure to accommodate compliance requirements.

Service models

Insurance companies also have choices in how cloud services are provided. Some options, such as software as a service (SaaS), have been around for some time. Insurance companies have long been able to have prebuilt applications hosted by another provider. Other models, such as platform as a service (PaaS), are relatively new and continue to evolve. Like deployment models, risk and revenue considerations are attached to each model.

Just about any service model can go on the cloud, but there are major categories of fine-grained solutions such as storage, database, information, process, integration, security, management and governance, and testing. There are also coarse-grained solution categories of platform, application and infrastructure.

“ If you take a tour of the Microsoft® data center, you will see that security is equal to or beyond any security in other corporate data centers. I was extremely impressed at the level of investment made. The facility was well managed, with endless capabilities and well-placed safeguards.”

— Kevin Mason Vice President, Product Development and Maintenance, Instec

What Microsoft customers are saying:


Four basic service models are currently in play:

> Business process as a service (BPaaS). This model provides companies with a business service where the application runs on the cloud. It allows for business process modeling for claims, underwriting and new product development. For example, some insurance companies are allowing customers to input their First Notice of Loss online (FNOL), without needing to add manpower or infrastructure overhead. This results in quicker claims responsiveness, which improves customer satisfaction. In addition, the cloud can protect against internal systems crashing in the event of a major disaster.

> Software as a service. SaaS consists of software applications that deliver specific business capabilities. This model represents an alternative to clients running software on their own servers. For example, insurance companies can run their actuarial processing or month-, quarter- or year-end processing on Windows HPC Server 2008 R2, which will accommodate massive bursts of activity without slowing down existing systems.

> Platform as a service. PaaS is the delivery of the development environment as the service. PaaS offerings can offer insurance companies facilities for application design, development, testing, deployment and hosting, as well as application services such as team collaboration, Web service integration and marshaling, database integration, security, scalability, storage, persistence, state management, application versioning, application instrumentation, and developer community facilitation. These services may be provisioned as an integrated solution over the Web.

> Infrastructure as a service (IaaS). This model delivers computer infrastructure, typically a platform virtualization environment, as a service. Rather than purchasing servers, software, data center space or network

FIGURE 3Alternative cloud service models

Each service model can be combined with a deployment

model to create a complete

cloud solution.

TESTING AS A SERVICE

MANAGEMENT/GOVERNANCE AS A SERVICE

APPLICATION AS A SERVICE

PROCESS AS A SERVICE

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INFRASTRUCTURE AS A SERVICE

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equipment, clients buy those resources as a fully outsourced service. The service is typically billed on a utility computing basis and according to the amount of resources consumed. Therefore, the cost will typically reflect the level of activity. It is an evolution of virtual private server offerings.

These broad deployment models contain several subsets. (See Figure 3.)

Each service model can be combined with a deployment model to create a complete cloud solution. In choosing the right service or deployment model, insurance companies will need to consider what their business priorities are – upfront cost reductions; total cost of ownership; faster claims handling; new product speed-to-market; improvement of customer satisfaction; tighter collaboration between agents, brokers, claims and underwriters – and what areas they should most urgently address. In addition, they will need to carefully consider the trade-offs associated with these choices.

Key challenges

Many factors point toward an evolutionary approach. Offsetting the many benefits of cloud computing are numerous challenges. However advanced the technology may be, many issues have to be resolved.

> Data privacy. The cloud model has been criticized by privacy advocates because it gives the companies hosting the cloud services greater control and easier monitoring, lawfully or unlawfully, of the communication and data stored by the user. Although various efforts, such as US-EU Safe Harbor, have attempted to harmonize the legal environment, providers still cater to major markets (typically the United States and the European Union [EU]) by deploying local infrastructure and allowing customers to select availability zones.

> Compliance. Users need to ensure that cloud solutions are in compliance with regulatory requirements. Some items cannot be moved into the cloud unless the regulations are taken care of. For example, customers in the EU contracting with cloud providers established outside the EU have to adhere to the EU regulations on export of personal data. In some cases, cloud providers have already considered these requirements and can guide insurance companies to make the right decisions. Many providers also obtain SAS 70 Type II certification, but this practice has been criticized on the grounds that the handpicked set of goals and standards determined by the auditor and the auditee are often not disclosed and can vary widely. Providers typically make this information available on request, under nondisclosure agreements.

> Open standards. Open standards are critical to the growth of cloud computing. Most cloud providers expose APIs, which are typically well documented (often under a Creative Commons license) but also unique to their implementation and thus not interoperable. Some vendors have adopted others’ APIs, and a number of open standards are under

The Open Cloud Consortium

is working to develop consensus

on early cloud computing standards

and practices.


development, including the Open Grid Forum’s Open Cloud Computing Interface. The Open Cloud Consortium is working to develop consensus on early cloud computing standards and practices.

> Migration risks. Transferring from any legacy environment to a new computing model involves migration risks. Obviously, the more sensitive, mission-critical applications such as signed policies and risk management systems will have higher transferring risks than other services. This may well affect the prioritization of cloud solutions.

> Business continuity. Insurance companies will likely demand that cloud service providers have industrial-strength business continuity capabilities and real-time disaster recovery plans in place. This demand is likely to limit the range of potential cloud providers to large firms capable of providing more industrialized solutions.

> Security. Cloud computing models have various associated security issues – the main one being data privacy. But the industry offers solutions that are fully compliant with regulatory standards. Often, it is a matter of making clients comfortable with moving from an existing environment that they know is fully compliant to one they are less familiar with. The solutions that appear to offer the most benefits also raise the greater security concerns.

> Access. As the cloud is still relatively new, many users question who might have access to the stored data. Companies also have raised questions around physical security: Where are the data centers? Who is working in them? What physical access is provided and to whom? In addition, some companies are concerned about permissions – how will they be controlled, whether there can be several layers of permissions with varying degrees of access (for example, permissions for company employees, independent agents and customers). Companies should address all of these issues when choosing a cloud services provider.

> Loss of control. Some concerns have also been raised over uptime and who to contact if the service goes down. Companies may fear that without direct control over the management of the data center, they could experience a lack of responsiveness or quality of management. In reality, data centers are in the business of uptime and service-level agreements. Core to their business is maintaining infrastructure, including managing updates, patches and other fixes. Many data centers have automatic built-in redundancy to avoid downtime or any loss of data. And, as a key benefit, costs for the maintenance of these data centers are shared by all who share a cloud.

Future developments

Despite the trade-offs, cloud computing will continue to grow at different rates for different combinations of deployment and service models. The trade-offs associated with each service and deployment model will restrain growth in the short term, but once they are resolved or diminished, the full benefits of the cloud will be realized. The insurance industry will then experience a classic

tipping point where the cloud becomes a mainstream solution. Even today, some insurance start-ups, new markets and product ventures are launching with a cloud model. Other established insurance providers are using the cloud for tasks such as lead and pipeline management and agent/broker location, or as a knowledge base with FAQs regarding products, purchasing a policy, forms submission and claims procedures. As this information


becomes more accessible, customer representatives can handle a wider variety of client or partner inquiries quicker and with greater satisfaction. As companies evaluate each of their applications, whether new or existing, the cloud should be considered as an option when determining a strategy going forward.

Although all cloud service models are likely to see growth, the fastest will come from PaaS solutions for at least two reasons. First, as a relatively new opportunity, these models start from a lower base. Second, as more applications are developed on platform technology, SaaS and IaaS will converge with the PaaS service model because more applications will be written in this environment.

Insurance companies will eventually migrate part or all of their data centers to IaaS, but IaaS will consume a relatively smaller part of IT budgets longer term, as infrastructure applications commoditize. IaaS migration may take place more quickly in smaller rather than larger companies, where competitive cost pressures are more keenly felt. In the next two or three years, the growth trajectories of service models will converge and then accelerate, with PaaS as the dominant model. (See Figure 4.)

In terms of deployment models, it’s likely that insurance companies will tend to favor private and hybrid solutions first because of the priority given to security, but many will migrate to public models over time as confidence, knowledge, experience and standards grow. Community models are likely to suffer from the absence of common governance and security standards, and these will become less important. Ultimately, as standards mature, the public deployment model will become the industry standard. (See Figure 4.)

Longer term, the various service and deployment models will converge, helped by the convergence of business process outsourcing and the outsourcing of application development and information technology. The current fragmented environment will eventually become highly integrated.

FIGURE 4 The evolution of service and deployment models

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Getting started

The challenge for many firms is in knowing where to start. The cloud may seem like an answer to several problems, but firms need to have a clear plan in mind when embarking on a cloud journey. In addition to the many technical considerations, companies need to consider myriad policy and business details.

Competitive considerations

Many insurance firms consider their technology and data to be proprietary, and that is probably one of the most important reasons so much of it remains on premises. One question to consider is whether that proprietary advantage is really more secure in house or within the firewall of a cloud partner.

Where the software is provided by a vendor, the proprietary nature of the technology is less of an issue. Here the concern is mainly about data. As far as data privacy is concerned in the cloud, data is widely dispersed across several servers that also may be geographically diverse. It is likely to be much less concentrated than in an on-premises environment. So, ironically, it may be more secure in a cloud environment than on premises.

Where the software is proprietary, the risks are different. It is much more difficult to conduct software piracy in a cloud environment than it is on premises. Again, the cloud environment may provide much greater protection than an on-premises situation.

Mission-critical and less mission-critical applications

Testing the waters with less mission-critical applications in the cloud is probably a good idea at first. Some insurance firms are using the cloud to offer mobile applications, because mobility and cloud services are a natural fit. Some are offering individual agent microsites or running marketing campaigns in the cloud, enabling the launch of high-volume promotions without taxing the current infrastructure. Others are more comfortable using the cloud for communication or collaboration tools, document management and CRM applications. The cloud is a great way to engage independent agents and keep them in the loop with the most current forms and documents. For example, an insurance company might host information for its agents and brokers such as crime

“ We’re using Windows AzureTM to meet the evolving needs of our clients. And with the ... reduced levels of new investment required, we can consider solutions that might otherwise not have been possible.”

— Rob Fraser Head of Cloud Computing, Risk Metrics

What Microsoft customers are saying:


statistics, home values and other public information in a public cloud, along with up-to-date company information and current forms.

Other self-service capabilities and marketing tasks can be easily hosted in a cloud environment, enabling brokers, and ultimately customers, to post and track service requests, input and track claims, participate in insurance training, take online exams, or upload pertinent documentation (such as pictures of a loss).

Choosing the right partners

Cloud deployments are likely to involve more than one partner, and in an enterprise technology environment, it may be one of a number of different deployment models. But the decision to adopt a cloud solution is more strategic than other types of technology decisions. Therefore, cloud deployment decisions taken at a line-of-business level need to be much more sensitive to enterprisewide considerations.

For example, if one line of business is considering purchasing a customer relationship management (CRM) application and running it on the cloud to reduce the total cost of ownership, one of the considerations should be whether that CRM application also can be used in other lines of business as well, if the full benefits of cloud deployment are to be realized.

Investing in the success of the enterprise

If cloud deployments lead to broader enterprisewide engagements, then selecting a cloud should be a much more strategic decision for a financial institution than selecting an individual software package. Given the likely transition of cloud deployment models to PaaS, it will be important to consider both the short- and long-term development plans of cloud partners. The other important consideration is scale. Cloud providers need to have both the technical and financial resources to be able to support what may become mission-critical applications.

Finally, the cloud provider is likely to be not just a technology partner but a business partner, understanding the client’s business in detail and committed to its success. Simply too much is at stake for this to be just a vendor relationship.

The cloud provider is likely to be not just a technology partner but a business partner, understanding the

client’s business in detail and committed to its success.


Case study: AXA Seguros

AXA Seguros, part of AXA Group, is an insurance company

that strives to deliver superior customer service, which is

critical for success in this industry. The company wanted to

replace an inefficient, manual, claims-management system

with a new system that did not rely on manual processes

or infrastructure and wasn’t destined for obsolescence but instead had the

flexibility and scalability to grow with the business. At the same time, the

company did not want to make costly financial investments or go through

the time-consuming process of procuring new infrastructure hardware –

which, in this case, could take months and cost thousands of dollars.

AXA Seguros decided to implement the Windows Azure platform in a

pilot deployment for this new claims-management system. Windows

Azure is a cloud-services operating system that serves as a development,

service hosting and service management platform, providing developers

with on-demand computing and storage to host, scale and manage Web

applications. “With other cloud providers, you only get part of the

solution, but with Windows Azure, you get the entire infrastructure,” said

Juan Carlos Robles Navarro, senior software engineer at AXA Seguros.

The new claims-management system uses Windows Azure for compute

processing and Microsoft SQL Azure for its relational database needs,

including storing customer information and claim-resolution details.

“Migrating our on-premises data to SQL Azure was a transparent process

that required little training,” Navarro said.

The cloud-based solution has custom workflows that route claims to the

appropriate department for resolution and then back to the agent as well

as alerts that notify employees when action needs to be taken on a

customer’s behalf. The solution simplifies maintenance and improves

interoperability with back-end services, providing the following benefits:

> Simplified development and deployment. Including the planning,

development and deployment, AXA Seguros implemented its solution

in only eight weeks. An on-premises solution generally takes between

18 and 30 weeks.

> Improved ability to focus on business logic. Because the learning

curve for developing on the platform was short, developers were able

to focus on the business logic of the application – such as routing

claims to the correct department – instead of the technology.

> Avoided capital expenditures. AXA Seguros built a highly scalable

application without having to invest in costly infrastructure, avoiding

a one-time hardware investment of almost $10,000 (U.S.). On average,

AXA Seguros estimates it will spend $97 each month with Windows

Azure, which is a 65 percent savings over three years.

AXA Seguros built a highly

scalable application without having

to invest in costly infrastructure,

and the company estimates a

65 percent savings over three years.


Planning for the longer term

Many insurance companies are viewing the cloud opportunity from a tactical perspective, but it demands a strategic approach. As each new application or service is evaluated, companies should determine if the cloud is a viable option. When planning for the longer term, firms are using the

cloud to develop and test new products, launch new applications and services, open new markets and expand their customer service offerings.

The cloud offers insurance companies many financial benefits such as reduced data center costs, reduced need for investment in new systems, no lengthy procurement process and rapid application development. Further, big changes in compute demand resulting from catastrophes, marketing promotions, seasonality or acquisitions can be rapidly accommodated without the infrastructure and overhead.

On moving to the cloud, Instec’s Mason said, “We have been on a cloud path since last fall. Our proof of concept with quicksolver moved to the cloud in January. Overall, we’ve had to address a couple of issues, but none were insurmountable. The process to date has been moderately easy.”

Cloud computing offers a single application environment for the development of new services. This model reduces development costs in the long term and ensures that services are developed to a common set of standards, reducing governance concerns, time-to-market and total cost of ownership. Insurance companies can develop new products faster, more economically and more robustly than before.

According to Pettibone’s article in Insurance & Technology, “Even in this economic climate, cloud computing continues to grow, and CIOs must stay current with cloud development and adjust their plans accordingly. After all, with budgets constantly being cut and IT demands escalating, cloud computing is rising as a necessary tool to increase efficiency and lower costs while retaining company value.2

Cloud computing offers a single application environment for the development of new services. This model reduces

development costs in the long term and ensures that services are developed to a common set of standards.

2Insurance & Technology: Carriers Should Keep Up with Cloud Computing Advances, Challenges. http://insurancetech.com/showArticlejhtml?articleID=217100311 ©2010 United Business Media LLC.


Kevin R. Clay, MBA

Microsoft Financial Services

8050 Microsoft Way

Charlotte, NC 28273

Cellphone: 910-777-1079

[email protected]

Colin Cole

U.S. Insurance Chief Technology

Strategist, Microsoft Financial Services

200 East Randolph Drive

Suite 200

Chicago, IL 60601

Work: 630-725-4061

Cellphone: 847-910-8115

[email protected]

Alan Dulin

U.S. Director of Insurance,


4605 Duke Drive

Suite 800

Mason, OH 45040

Cellphone: 513-290-2321

[email protected]

Doug Groncki



Suite 200

Chicago, IL 60601

[email protected]

Colleen Healy

General Manager,

U.S. Financial Services,



Suite 200

Chicago, IL 60601

[email protected]

Colin McClive


1290 Avenue of the Americas

6th Floor

New York, NY 10104

Cellphone: 203-559-7491

[email protected]

Kathy Ross

Industry Marketing Manager,


1290 Avenue of the Americas

6th Floor

New York, NY 10104

Work: 646-225-4142

[email protected]

The U.S. Financial Services Insurance Industry Team at Microsoft

16

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