Enterprising Developments

Payoffs From Cloud Computing Still Up in the Air

Joe McKendrick
Insurance Experts' Forum, December 19, 2011

Cloud computing may seem like a revolutionary force sweeping through the data center, but in reality, it's very, very early in the revolution. Early as in barely making a dent in corporate IT budgets.

CSC just released the results of a survey that would give many carriers pause. Essentially, the survey of 3,645 IT executives found that the typical cost savings seen for a cloud project is less than $20,000.

That's a drop in the ocean for insurance companies that pay ten times that amount on a weekly basis for their IT services and infrastructure.

If it's not the money, what is attracting enterprises to cloud? For many, it's a platform to help support all the mobile devices being brought into organizations.

And there seems to be a positive impact on IT departments as well – only 14 percent of the companies in the survey downsized their IT departments after adopting cloud, while another 20 percent increased hiring to support cloud engagements. Plus, cloud is reported to be helping boost improvements in IT performance, and that's always a good thing. Among the most common improvements, 52 percent of users report increased data center efficiency and utilization, while 47 percent witness lower operating costs post-cloud adoption.

For the notably cautious insurance industry, a wait-and-see strategy toward cloud appears to be the rule. But despite surveys showing the most low-key results – such as the CSC survey mentioned here – there are a lot of compelling reasons why cloud will ultimately be at least part of everyone's technology future.

Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.

Readers are encouraged to respond to Joe using the “Add Your Comments” box below. He can also be reached at joe@mckendrickresearch.com.

This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.

The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.

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