As the economy continues to suck wind, a number of analysts are forecasting slight increases in IT spending going forward, but for insurance and financial services the key question is where to apply the additional funding.

In June of this year, Gartner revised its overall global IT spending growth forecast for 2011, increasing them from 7.1 percent to 7.6 percent for 2011. But with most of us having gotten used to “doing more with less,” various facets of IT operations may find themselves jumping at additional funds.

So where will the money go? According to London-based Ontrack Data Recovery, businesses across the world are investing in more efficient and sophisticated data storage systems that improve data protection and file recovery capabilities. Ontrack says online that “for the seventh consecutive quarter, external controller-based disk storage revenue grew worldwide, totaling $5.1 billion (£3.2 billion) in the third quarter of 2011, according to figures from Gartner.”

From my point of view, this is welcome news for insurance and financial services interests. For some years I have been writing about the ever-increasing imbalance between the amount of data we create and our ability to store and retrieve that data. My fear since 2008 was that our enterprises would be too busy worrying about supporting customer retention and new customer acquisition to worry about the overflow of available data storage sources. Ontrack, however, quotes an ABI Research forecast that data recovery spending will reach $39 billion (£29.9 billion) by 2015, acknowledging that many firms will not be able to operate without improved technology.

My other fear was that enterprises would seek solace in the cloud without properly considering the security risks. Happily, however, it appears many IT operations are hedging their bets by investing in physical data storage in addition to forays into the cloud, both public and private. Insurers certainly want to take advantage of the savings and efficiency offered by cloud technology, but many I talk with remain wary of security and access issues.

Overall, I believe this balanced approach will be a fruitful one for our enterprises — avoiding putting too many of our precious data eggs in the proverbial single basket. It’s just another case of our industry-inborn tendency to be very cautious — and it should allow insurance IT operations to formulate and execute a strategic migration to the cloud for data and applications that are less risk-prone.

This column originally appeared at Insurance Networking News.

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