Enterprising Developments

Is Cloud Really Safer for Data Storage?

Joe McKendrick
Insurance Experts' Forum, August 28, 2012

Amazon Web Services recently introduced Glacier, a data archival service that is priced to store data for one penny per gigabyte per month. For organizations with at least 10 TBs of data, that means about $1,200 a month.

Of course, it will be some time before large insurance operations would entrust valuable and sensitive data to a cheap cloud offering such as this. Still, Amazon is clearly disrupting the business model for storage, and that's good news for everybody—especially in the era of big data.

The current alternative, large RAID disk arrays or archiving across storage area networks, is unsustainable. For a company with 500 TBs of data, that requires capacity to back up and store a duplicate 500 TBs. That's also a lot of data that can get lost as well.

Is the cloud a better alternative? A recent survey of 367 companies from Kroll Ontrack finds that cloud, so far, has a pretty good track record for helping to prevent data loss.

According to the survey, 49 percent of organizations reported experiencing some type of data loss in the last year, but not necessarily from the cloud. Fifty-five percent denoted data was lost from a traditional storage device in contrast to 26 percent who reported a data loss from a virtual environment. In contrast, only three percent reported a loss from the cloud. Another 16 percent experienced data loss from both a virtual environment as well as the cloud.

IT executives appear to be confident about the ability of their cloud providers to properly handle incidents of data loss. Only 29 percent revealed a lack of confidence, compared to 55 percent of respondents in 2011, Kroll states.

Indeed, there is risk. The survey found just 17 percent of respondents revealed that they test their data recovery plan regularly to validate technical and personnel readiness against cloud or virtual data loss technical recovery capabilities. 13 percent also responded that they do not have a data recovery plan.

There is plenty of angst about the safety of data in cloud settings, and a lot of this angst may be justified. But so far, cloud providers seem to be doing a good job with preserving data. For insurance executives looking to find more places to house big data, the cloud may be worth taking a look. The key is to back up cloud arrangements with additional storage—perhaps even locally on their own systems as a backup site. (Alternatively, the cloud could serve as the secondary backup site.) The Kroll Online survey did not dissect how much of this response pertained to private cloud, but it can be assumed that private cloud – often a higher-level extension of storage area networks – also provides a great deal of assurance, along with being maintained by in-house IT staff. There is also plenty of competition among cloud providers, so this breaks in favor of end-users as well.

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.

Comments (1)


I can't see the cost effectiveness of Cloud-based data storage when the suggestion is that companies should invest in additional (secondary) backup strategies for their Cloud based data.

That fundamentally is not cost effective.

As Cloud based storage scales to 100TB and beyond, the potential bandwidth requirements for a full DR would be cost prohibitive in comparison to hosting your file storage in a 99.9999999% certified provider.

I think your point about risk is well made and for the same reasons. Running a data-safe, economical and environmentally friendly data center is costly and many executives are not well educated by their CIOs. It seems to me that large, commercial data centers can achieve the levels of operating costs needed to stay in business and offer the prices and services attractive to CIOs.

I think the risk is too high with newer Cloud storage companies. Some are simply brokers who buy capacity from the huge, trusted suppliers. Others are simply too eager to provide Cloud "anything" and overstate their Service Level Agreements.

Finally, I think Cloud based data storage will only be as effective as your bandwidth capacity.

Posted by: Mike L | August 28, 2012 5:25 PM

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