From Big-Iron Weekends to Apps on Demand: Disaster Recovery Morphs into Cloud

I remember back in the 1990s, the folks from SunGard Recovery Services gave me a guided tour of their center city Philadelphia-based disaster recovery center. It was nondescript from the outside, housed within a 1940s-vintage building that was originally built to manufacture tanks. Given that heavy-industry legacy, the building was well suited for disaster management, built with reinforced steel-plated walls and flooring. The site was a sight to behold—rooms full of big-iron mainframes, and even sleeping quarters for the IT people who showed up two long weekends a year to run their DR drills.

That was how it was done in those days not too long ago, of course—backups for any system required a truckload of tapes, and in the event of hurricane, tornado, floods, fires and pestilence, the IT folks would schlep down to the DR center and reload all their apps and data into SunGard's machines from the tapes. SunGard had (and still has) many large insurance companies as its clients for these big iron weekends.

Nowadays, however, we don't exactly have DR centers; we have the cloud to back up and enhance our applications and systems. Which creates an interesting new role for companies such as SunGard, which also is highly diversified into services, hosting and software. I recently heard from Steve Foster, senior manager at SunGard, on some of the shifts he is seeing as his industry shapes and is shaped by the cloud.

Foster says he is seeing interest, in fact, among global insurers for enterprise risk modeling from a cloud-based environment. SunGard provides additional capacity and performance as insurers look to comply with regulatory demands, such as Solvency II, an updated set of regulatory requirements for insurance firms that operate in the European Union, scheduled to come into effect late 2012.

Insurance is an industry that understands the cost of risk, but as far as cloud-based services go, “the benefits outweigh the risks,” Foster believes. “First, insurers need the additional capacity in an optimized environment to run operations and comply with upcoming regulations,” he explains. Cloud-based services offer numerous advantages over running applications on desktops, he adds.

“Traditionally, actuarial systems are desktop-based, and this places the burden and responsibility for accuracy and transparency of data on individuals,” Foster continues. With a hosted or cloud approach, “the effort to be up and running is minimal,” he says. “Insurers simply choose how much capacity they require, as in the number of cores they need, and we take care of the rest.”

Foster says risk management is only the first of a line of applications and functions that can be delivered via cloud-based services to insurance companies. Other areas include distribution, agent servicing and on-boarding customers, he says.

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

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