The Cloud: Jump in Now or Wait?
When it comes to data storage, the insurance and financial services industries find themselves figuratively, if not literally, between a rock and a hard place.
Market forces —like rapidly expanding volumes of data, increasingly inadequate on-site data storage capabilities, and pressure from regulators and customers to safeguard valuable information — are combining to put us in a quandary. At least in the short term, the problem is not that there are no solutions available, but which solution to leverage and at what cost.
A recent posting in Microsoft’s OnWindows newsletter talks about the top 10 strategic technologies for 2012. One such strategic technology need is dealing with what the newsletter calls “Big Data.” The challenge here is that “the size, complexity of formats and speed of delivery exceeds the capabilities of traditional data management technologies; it requires the use of new or exotic technologies simply to manage the volume alone.” A major implication of big data is that in the future users will not be able to put all useful information into a single data warehouse, the newsletter says, and thus we will need data warehouses that bring together information from multiple sources.
Yet another top 10 strategic technology, perhaps unsurprisingly from a vendor of this specific technology, is cloud computing. In terms of data storage, management, and moving data to multiple data warehouses, the cloud certainly makes sense. Interestingly, the newsletter describes the cloud as “a disruptive force and has the potential for broad long-term impact in most industries.”
OnWindows goes on to say that enterprises are moving toward making decisions on what workloads to implement on cloud services and where they need to build out private clouds. “Hybrid cloud computing which brings together external public cloud services and internal private cloud services, as well as the capabilities to secure, manage and govern the entire cloud spectrum will be a major focus for 2012,” the posting states.
The other side of this coin — as I have written here and elsewhere — is that cloud technology at this point in time is somewhat risky, especially in the public domain. The fact that portable devices (a security risk in themselves) are part of the picture for many enterprises makes the security challenge that much more daunting. How much risk are we willing to tolerate in order to achieve low-cost data storage and access? As experts at risk assessment, we must carefully consider this question when we inevitably select a strategy to handle our massively expanding data.
As hinted at by Microsoft, however, the cloud is still developing in terms of experience and best practices. Thus it seems prudent to limit cloud participation to enterprise areas that do not link to or depend upon either critical data or clients’ personal information. This may mean expanding the number of servers we have, or perhaps, investing in solid-state technologies that are currently more costly but deliver benefits not seen in magnetic storage.
It’s true that our industry’s wait-and-see attitude on technology is often a source of frustration for propeller-head geeks such as myself, but in the case of the cloud, the stakes are too high to risk even a moderate failure. We will see better and more secure iterations of the cloud with which we feel safer — if we have the patience to wait for them.
This column originally appeared on Insurance Networking News.