Orlando — The technology introduced at the Connect Future Focus event, hosted by Computer Sciences Corp. (CSC), was the topic of the day long after the more than 1,000 attendees at the Orlando conference heard about it during the company’s opening session.
Hosted annually by CSC, the Falls Church, Va., software giant, Future Focus invites key executive clients, partners, and members of the press and analyst communities to network, learn and share information about the insurance industry and its future.
Sun Microsystems' chairman and co-founder Scott McNealy addressed the crowd, telling them that “Sun has a strange strategy of sharing—and making code available for free.” Saying he didn’t want to sound “Al Gorish,” McNealy nevertheless claimed ownership of the technology. “We invented Open Source. This dates back to the days at Berkley and Bill Joy. Open wins.”
McNealy’s reference to Joy, who helped write Berkeley UNIX, the first Open Source operating system, created a frame of reference for the insurers in the audience that are noted for their tendency to retain legacy systems. It’s the legacy systems that are the greatest cause for concern, according to McNealy, because they “trap” insurers into proprietary code.
“All technology has a shelf life of a banana,” he said. “So with each upgrade, you are facing barriers. This (Open Source and Java) technology is all about getting people to understand lower barriers to entry, increased interoperability, lower R&D costs, enhanced security and lower barriers to exit.”
The big news out of CSC, of course, is the adoption of Java, namely with its planned December 2008 launch of its POINT IN policy administration system for P&C insurance processing on the Santa Clara, Calif.-based Sun Microsystems’ Java EE platform. CSC will continue to support and maintain both versions through its Continuous Delivery software upgrades, which give insurers incremental updates as soon as they become available.
“We adopted that 2007 strategy with this announcement in mind,” said Ray August, president of CSC’s P&C division. “In addition, POINT IN’s integrated components are compatible with POINT IN J.”
On Tuesday, McNealy joined CSC executives in a closed-door press briefing to explain to Insurance Networking News and others what this blending will mean for insurers.
“Infrastructure wise, we see many organizations dying on the I-vine,” McNealy said, referencing the legacy systems and operational silos currently in use by insurers. “Customers are locked into R&D efforts on just one platform.”
The companies talked about the CSC/Sun deal’s value proposition, but admitted it might be a tough sell in the mid-tier market.
Jim Cook, president of CSC Financial Services, said that it was too early to predict POINT IN J wins for 2009 and beyond, but referenced its partnership with Sun in the capital markets and an already established portfolio as evidence that the companies are ready to aggressively enter the market. “We believe it’s the tip of the iceberg,” he said. “We see the future: there is a new generation of CIOs coming out of insurance, and we are confident that offering this technology to them is the way to go,” Cook said.
McNealy pointed out that savvy insurers are recognizing that their customers are changing, and that embracing technology to keep pace is mandatory. “They want everything online, and don’t want to talk to people, where the older customers want nothing more than to connect with a real person.”
Affirmed of the two companies’ long-term affiliation, McNealy called the CSC deal “less of a partnership and more of a business relation hip,” citing opportunities for both companies. “Our people will have a reason to be out in the market talking about this,” he said.
“Sun has always been, in my opinion, a pace setter against the perception of laggards in the insurance industry,” noted Cook. “So this offering does not hurt us, because it’s better for all parties if we supplement each others’ capabilities in this market. It’s hard to believe that mainframes will disappear from the planet. But Java is a sign of things to come.”
Chad Hersh, principal with New York-based Novarica, called what the two companies are offering a “sea change” not unlike the technology strategies of Progressive and GEICO. “They forced others to look at their online strategies,” he said. “Likewise, the recognition of Java will help drive this further. It will be a wake up call for the industry.”
Sources: CSC, Sun Microsystems
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