Insurance, SaaS, and Halloween

Happy Halloween! That’s the common greeting for Halloween, even though it has a dark side of “evil spirits” in addition to its happy, popular side of costume parties for all ages and candy for young people trick or treating. Halloween is now the second largest commercial holiday in the United States, which should make some businesses and economists happy.

Halloween has a long history dating back more than 2,000 years. According to this slide show from the Discovery Channel, the original Halloween was a Celtic holiday called Samhain (pronounced sow-in) that was celebrated on October 31 with bonfires, crop and animal sacrifices, and animal costumes to please and appease dead spirits that came back on that day.

Many people claim to have had contact with the spirit world; in this CNN article promoting his new album, “If on a Winter’s Night,” Sting said he’s “surrounded by ghosts.” The album includes a song, “Soul Cake,” about cake offerings to spirits on Halloween.

Halloween also has a tradition of vandalism. According to the Discovery Channel slide show, “trick or treat” was an appeal for candy in exchange for a safe house on Halloween. “Mischief Night,” “Gate Night,” “Devil’s Night” and “Mizzy Night” are different names for the same tradition of vandalism on October 30. The “tricks” common to Gate Night include rubbing soap bars on windows, throwing eggs at houses, adorning trees with toilet paper, running away after ringing doorbells, spray painting houses and buildings, setting fire to piles of leaves, and the like.

With its tradition of vandalism and the heightened possibility of encounters with spirits, Halloween has a dangerous side; that makes it a good time to think about insurance.

As if from a ghost helping me with this post (but it’s not ghost-written), just yesterday, on Gate Night, I found an excellent article in Insurance Journal by Susanna Morgan on the advantages of software-as-a-service (SaaS) solutions for insurance: “How Software as a Service Helps Agents do More with Less.”

Morgan argues that SaaS, because it requires little upfront investment in infrastructure and licensing, and because it is quick to implement and accessible from any computer, can help with the following business drivers in insurance today:

• Customer retention and great customer service
• Revenue growth and a deeper understanding of customers
• Streamlined operations and improved business processes

The types of SaaS applications that Morgan lists to support the above business needs include applications for agency management, comparative rating, content management, and business activity monitoring.

I add these types of SaaS applications:

• Enterprise mashup dashboards such as mashmatrix can help retain customers and provide great service, because they can pull data from any web-facing source and display the data in a single dashboard. An example is a dashboard for customer service showing all customer information that agents need from all sources while servicing customers.
• Enterprise relationship management solutions such as BranchIt help grow revenue by discovering relationships within your organization that may help with a sale or a partnership. One BranchIt customer was able to discover employee relationships with more than 20 percent of a list of prospective customers.
• Price optimization solutions such as Mimiran help you to avoid leaving money on the table when pricing insurance products and services.
• Business intelligence solutions such as Birst and eiVia help improve operations, business processes, understanding of customers, and decision-making by uncovering patterns, answering questions, and predicting outcomes.
• Enterprise cloud databases such as TrackVia help you quickly design and deploy cloud-based applications to solve business problems.
• Integration products from Pervasive Software and Sesame Software provide data exchange and interoperability between legacy on-premises and software-as-a-service (SaaS) applications.
• Single sign-on solutions such as TriCipher’s myOneLogin provide user authentication and keep vandals away by centrally managing user access to authorized applications.

With its strong reliance on probability and statistics, the insurance industry probably has a good estimate of the risk and cost of Halloween. The above SaaS applications can help the insurance industry reduce its cost of pooling risk and cost, and turn those savings into good tricks and treats of reduced premiums and optimal customer service.

What do you find scary about retaining customers, growing revenue, and improving business processes, and how do you think SaaS can help?

Cloud Computing: Thriving on Adversity

Economist Joseph Schumpeter

In an article, “Thriving on adversity,” in the new Schumpeter business and management column in The Economist, West Coast Bureau Chief Adrian Woolrich argues that “recessions—particularly gut-wrenching slumps like this one—provide as many opportunities for business people as they do for politicians. Although they are often called ‘slowdowns,’ recessions shake things up rather than slowing them down. They reward strengths and expose weaknesses, create new opportunities and kill old habits, release pent-up energy and destroy old business models.”

After writing about patterns of creative destruction and successful outcomes for companies such as Hewlett-Packard during the Great Depression and other recessions, Woolrich concludes that “there is also every reason to believe that the current recession will produce lots of upstarts. The Kauffman Foundation, which studies entrepreneurship, points out that about half of Fortune 500 and Inc. 500 companies (lists of the biggest and fastest-growing firms in America, respectively), including such household names as FedEx, CNN, and Microsoft, were founded during recessions or bear markets. A disproportionate number of these upstarts produced industry-changing ideas that established companies failed to appreciate until it was too late.”

As a new computing platform gaining momentum during this recession, cloud computing and many cloud-computing companies will likely fit the bill of producing industry-changing ideas and positive business results. A global study of CIOs, business and IT managers released last week indicates a 320-percent increase in planned use of cloud-computing solutions since the beginning of this year.

For example, consider these cloud-based solutions that can be implemented in days to quickly solve business problems:

• Enterprise mashup dashboards such as mashmatrix Dashboard provide rapid, personalized development of dashboards from any web-facing data source; get a complete view of a customer or patient on one screen without having to switch between screens and applications.
• SaaS business intelligence (BI) applications from Birst and eiVia provide quick analytics for decision-making.
• Enterprise relationship management solutions such as BranchIt help your business leverage relationships that colleagues may have with prospective customer or partner contacts.
• Price optimization applications from companies such as Mimiran help you avoid leaving money on the table in pricing your products or services.
• Enterprise cloud databases such as TrackVia help you quickly design and deploy cloud-based applications to solve business problems.
• Cloud-based single sign-on systems from companies such asTriCipher provide a single login for a user to access all authorized cloud-based applications.
• Integration products from Pervasive Software and Sesame Software provide data exchange and interoperability between legacy on-premises and software-as-a-service (SaaS) applications.

Economist Joseph Schumpeter argued that innovation is at the heart of economic progress, and that capitalism is a “perennial gale of creative destruction.”

I think that the current gale is coming from the cloud; do you?

The Open Cloud Manifesto

Today before a sell-out crowd of nearly 900 Utah executives at the Utah Technology Council’s (UTC) 11^th Annual Hall of Fame celebration event, Google CEO Eric Schmidt said that “cloud computing is an even bigger phenomenon than the advent of personal computing.”

Maybe he has a vested interest in that statement, but analysts also agree that cloud computing is an important strategic technology for 2010 (and beyond).

If, as Eric Schmidt said, cloud computing is an even bigger phenomenon than the advent of personal computing, and if I add that personal computing is a bigger phenomenon than the printing press, then cloud computing is the biggest phenomenon of all information and communication in history (I think we know that without the syllogism.). Do you agree?

A phenomenon of this magnitude deserves a manifesto; think of all the other phenomena that have manifestos!

Fortunately, cloud computing does have a manifesto: The Open Cloud Manifesto is dedicated to portability, interoperability, and flexibility of cloud-computing systems. It’s a very well written summary of the advantages and barriers to entry of cloud computing, and the goals and principles of an open cloud. If the world is increasingly and irreversibly online, then shouldn’t we model the ability to interoperate, change cloud providers, and share data after the open nature of the Internet itself (while continually improving security)? Many brilliant companies think so.

Here are the “Principles of an Open Cloud” from the Open Cloud Manifesto:

1. Cloud providers must work together to ensure that the challenges to cloud adoption (security, integration, portability, interoperability, governance/management, metering/monitoring) are addressed through open collaboration and the appropriate use of standards.

2. Cloud providers must not use their market position to lock customers into their particular platforms and limit their choice of providers.

3. Cloud providers must use and adopt existing standards wherever appropriate. The IT industry has invested heavily in existing standards and standards organizations; there is no need to duplicate or reinvent them.

4. When new standards (or adjustments to existing standards) are needed, we must be judicious and pragmatic to avoid creating too many standards. We must ensure that standards promote innovation and do not inhibit it.

5. Any community effort around the open cloud should be driven by customer needs, not merely the technical needs of cloud providers, and should be tested or verified against real customer requirements.

6. Cloud computing standards organizations, advocacy groups, and communities should work together and stay coordinated, making sure that efforts do not conflict or overlap.

Now that we have a new platform for computing, we can again show that technology always improves.

How would an open cloud impact your organization’s ability to innovate?

Cloud Computing Security Trends and Issues

Gartner’s positioning of cloud computing at the top of its top 10 strategic technologies for 2010 confirms that cloud computing has arrived and is here to stay. Cloud computing will help businesses achieve their goals of cost optimization, efficiency, improving decision-making, increasing revenue, and improving collaboration with colleagues and customers.

Just as cloud computing is changing the technology and business landscape of enterprise computing, it’s also changing the security landscape from the earlier approach of building a perimeter, which is still required, to other tasks such as monitoring user activity. This is necessary because employees are increasingly interacting and posting information on social-media sites outside of their firewalls; abusing their access to internal systems; and clicking on links that may infect their networks with malware. “Security – activity monitoring” is also on Gartner’s list of top 10 strategic technologies for 2010, emphasizing the importance of adapting security to support cloud computing.

In this article in InformationWeek, Pacific Labs CIO Jerry Johnson identifies protecting information containers such as workstations, servers, and portable media, and protecting information itself with digital rights management as important initiatives for cloud computing security. Again, building a perimeter around the network is not enough.

A panel of information security experts at the InformationWeek 500 conference spoke about another aspect of cloud computing that is changing the security landscape: virtualization. The issue with virtualization is that networks, storage, and applications may change physical locations, and security must account for this. This blog post and video from Cisco Systems briefly explains the benefits and security implications of virtualization. This article summarizes other security issues that the InformationWeek 500 security panel discussed.

There are many articles expressing concern about security with cloud-computing providers. One issue here is that customer data resides in the data centers of cloud providers along with data from other customers. Eva Chen, CEO of Trend Micro, suggests in this article that customers use identity-based encryption to protect their data so that only they can access their data with an encryption key. This also addresses concerns about virtualization, because no one but the customer can view the encrypted data no matter where it resides.

Another security issue with cloud computing is that employees will have access to many more niche applications, such as business intelligence,enterprise mashup dashboards, price optimization, and enterprise relationship management, that quickly provide business value. End users and IT departments will need a way to manage the access to so many cloud-based applications. TriCipher provides a cloud-based authentication and single sign-on solution, myOneLogin, which allows end users to access their authorized applications with a single user name and password. TriCipher’s solution also allows administrators to quickly and centrally grant and revoke access to applications.

For more information, the Cloud Security Alliance provides a wealth of information about cloud security, including this 83-page guide, “Security Guidance for Critical Areas of Focus in Cloud Computing.” SC and CSO magazines focus exclusively on information security; SC magazine is launching a webcast channel for information security here. Finally, RSA issued this news release of seven guiding principles to “maximize megatrends redefining the information security industry.”

As enterprises move toward cloud computing solutions for efficiency, cost optimization, flexibility, and return on investment, security professionals and vendors are adapting and adding value to the new computing model.

What are the security issues your organization sees with cloud computing, and what are some of the steps you’re taking?

Insurance and Business Intelligence

Click here for video clips of early flight attempts

While the Blue Angels flight exhibition that I wrote about earlier certainly impressed me with its precision, transparency, and speed, it also got me thinking about insurance. What would the cost range be if an accident occurred, and how would an insurance company model that possible cost and calculate a rate? What about insurance for athletes who continually expose themselves to injury in pursuit of excellence? Then, there are the various types of common insurance for the rest of us, such as automotive, life, and health insurance, and we who have those products know what they cost!

The insurance industry is based on statistics, historical data, and predictions used to determine pricing. It is a natural fit for business intelligence (BI), including analytics and reporting applications such as Birst, predictive analytics solutions such as eiVia, price optimization products such as Mimiran, and enterprise mashup dashboards such as mashmatrix Dashboard.

Scott Kemmerer outlines the various applications of business intelligence for insurance in his article in Information Management, “Business Intelligence: A Blueprint for Success.” According to Kemmerer, insurance companies can use analytics to model financial risk; dashboards to monitor operational costs and productivity; price optimization for more focused and accurate pricing; predictive analytics for fraud detection; analytics and reporting to evaluate agent and broker performance; and analytics for improved contract negotiation with outside vendors.

Kemmerer stresses the importance of predictive analytics to help predict outcomes. According to a cover story article in InformationWeek, predictive analytics is one of the four technologies that are re-shaping business intelligence; and research firm Gartner lists predictive analytics second after cloud computing in its top 10 strategic technologies for 2010.

Software-as-a-service (SaaS) BI enables insurance companies to quickly implement BI solutions to a greater number of decision-makers than was ever possible, because SaaS BI requires no software installation, maintenance and expensive equipment to run. Let us hope that the insurance industry increasingly implements and frequently employs SaaS BI to optimize its business and pass the cost savings to all of us who rely on its products.

What types of business intelligence solutions have you seen or plan to implement in the insurance industry?

Cloud Computing Tops Gartner’s Top 10 Strategic Technologies for 2010

‘Tis the season for 2010 recommendations, predictions, and resolutions. Following Burton Group and Forrrester Research, Gartner today announced its top 10 strategic technologies for 2010. Cloud computing and advanced analytics top the list, in line with many surveys of CIOs this year.

Gartner’s top 10 strategic technologies for 2010 include:

• Cloud Computing. “Enterprises will increasingly act as cloud providers and deliver application, information or business process services to customers and business partners.”
• Advanced Analytics, which “looks into the future, predicting what can or will happen.” eiVia is a leading on-demand provider in this space.
• Client Computing. Standardization of “devices, ownership and support; operating system and application selection, deployment and update; and management and security plans to manage diversity.”
• IT for Green. “Common green initiatives include the use of e-documents, reducing travel and teleworking. IT can also provide the analytic tools that others in the enterprise may use to reduce energy consumption in the transportation of goods or other carbon management activities.”
• Reshaping the Data Center. “A pod-based approach to data center construction and expansion. If 9,000 square feet is expected to be needed during the life of a data center, then design the site to support it, but only build what’s needed for five to seven years.”
• Social Computing. “Enterprises must focus both on use of social software and social media in the enterprise and participation and integration with externally facing enterprise-sponsored and public communities.”
• Security – Activity Monitoring. “Traditionally, security has focused on putting up a perimeter fence to keep others out, but it has evolved to monitoring activities and identifying patterns that would have been missed before.”
• Flash Memory. “Flash memory is a semiconductor memory device, familiar from its use in USB memory sticks and digital camera cards. It is much faster than rotating disk, but considerably more expensive, however this differential is shrinking.”
• Virtualization for Availability. Replicating virtual machines for high availability so that if one virtual machine fails, another immediately continues the processing.
• Mobile Applications. “By year-end 2010, 1.2 billion people will carry handsets capable of rich, mobile commerce providing a rich environment for the convergence of mobility and the Web.”

“Companies should factor the top 10 technologies into their strategic planning process by asking key questions and making deliberate decisions about them during the next two years,” said David Cearley, vice president and distinguished analyst at Gartner. “However, this does not necessarily mean adoption and investment in all of the technologies. They should determine which technologies will help and transform their individual business initiatives.”

Which of Gartner’s top 10 strategic technologies does your organization plan to implement over the next two years?

Blue Angels, Green IT

As part of San Francisco’s Fleet Week event a couple weekends ago, I watched an amazing air show featuring the Blue Angels, the famous flying ambassadors of the U.S. Navy and Marine Corps. The Blue Angels often fly in diamond or delta formations within 18 inches of each other, and also do many other unconventional maneuvers, such as barrel rolls and flying upside down. I was very impressed with their precision, transparency (no optical illusions in this performance!), and speed.

Precision, transparency, and speed are among the top priorities of CIOs today, according to recent surveys by InformationWeek and IBM. Precision translates into a high demand for business intelligence for more employees, helping them to make the best decisions they can with available data. Transparency translates into making visualization, mashups, collaboration, and social media available to employees so that they can more easily share ideas based on comprehensive information from multiple sources. Software-as-a-service (SaaS) business intelligence from companies such as Birst and eiVia, and SaaSenterprise mashup dashboards from vendors such as mashmatrix provide the speed required to get business results quickly and cost-effectively.

SaaS applications also free IT professionals to focus on business solutions and niche applications that may not have been possible with on-premises systems, which are more difficult to install, integrate, modify, and maintain. Examples of niche applications that translate into revenue include BranchIt for enterprise relationship management and Mimiran for price optimization.

Cloud computing also helps with green IT and sustainability strategies, according to a recent Aberdeen Group report, “Business Adoption of Cloud Computing.” The report states that sharing of data centers and virtualization of IT infrastructure, including servers, storage, networks, and security, reduces costs, energy consumption, and carbon emissions.

As we move out of a recession and on-premises systems into a recovery and cloud-based solutions, we’re taking off into a new era where business and IT may work together with precision, transparency, and speed even greater than the Blue Angels!

How is your organization defining and addressing needs for precision, transparency, and speed?

Forrester Research: Cloud Computing Belongs on Your Three-Year Roadmap

Following the 2010 IT trends predictions from Burton Group that I wrote about earlier, Forrester Research has some suggestions for the coming years: cloud computing belongs on our three-year roadmaps, according to a post this week in the blog, The View from Forrester Research, on ZDNet.  I suggest that we take Forrester’s advice.

From the post:

“Forrester feels that cloud computing is one of the Top 15 Technology Trends and that it warrants investment now so you can gain the experience necessary to take advantage of it in its many forms to transform your organization into a more efficient and responsive service provider to the business. Find small non-critical projects to start with so you can learn how best to apply these services to your business and combine this learning with the advice in our Tech Radar to help plot the timing for these investments.“

Finding small non-critical projects to start with sounds like a good plan. There are many ways to experiment with cloud computing, especially with software as a service (SaaS), and quickly get business value without significant risk or costly financial and technical investments.

For example:

• Enterprise mashup dashboards such as mashmatrix Dashboard provide rapid, personalized development of dashboards from any web-facing data source; get a complete view of a customer or patient on one screen without having to switch between screens and applications.
• SaaS business intelligence (BI) applications from Birst and eiVia provide quick analytics for decision-making.
• Enterprise relationship management solutions such as BranchIt help your business leverage relationships that colleagues may have with prospective customer or partner contacts.
• Price optimization applications from companies such as Mimiran help you avoid leaving money on the table in pricing your products or services.
• Enterprise cloud databases such as TrackVia help you quickly design and deploy cloud-based applications to solve business problems.
• Cloud-based single sign-on systems from companies such asTriCipher provide a single login for a user to access all authorized cloud-based applications.

I think that’s enough to try for a couple months. The benefits of these on-demand solutions that are quick and easy to implement could last well beyond three years.

What are some of the above applications that you could see implementing at your organization?

Sports and Business Intelligence

I am impressed with the level of detail available in sports statistics, when an announcer says something like, “This is the third time in Major League Baseball history that a starting pitcher was pulled from a playoff game at home in the top of the ninth inning with two outs and one man on second base while leading the game by three runs but behind in the series by two games on a Saturday before the series moved to the opposing team’s field.”

A more powerful and practical use of sports statistics is portrayed in the book, “Moneyball: The Art of Winning an Unfair Game,” in which author Michael Lewis documents the Oakland A’s use of sabermetrics, the analysis of sports statistics, to help management select players and improve team performance. The draft choices that the sabermetrics recommended were counterintuitive and not based on the traditional attributes of desirable players. As a result of following the sabermetric draft recommendations, A’s General Manager Billy Beane was able to build an excellent team on a low budget. A great video from IBM, “The Future of Baseball,” explains sabermetrics and its business applications in more detail.

While we may not always have the same level of detail available for business decision-making outside of sports, books such as “Moneyball” and “Competing on Analytics: The New Science of Winning” document the power of analytics to provide insights that we would not otherwise have.

In his article, “Business Intelligence in the Cloud,” William Laurent argues that business intelligence (BI) systems have been difficult and costly to implement, but the availability of software-as-a-service (SaaS) BI systems is making BI affordable and accessible to almost any business. In another article, “BI for the Front Lines,” Birst Founder and CEO Brad Peters suggests making BI available to more employees than only executives for decision making, and that SaaS BI is making it possible. In this article, “Where On-Demand Business Intelligence Makes Sense,” David M. Rabb presents the trade-offs between on-premises and on-demand BI solutions.

As businesses fight hard to succeed and survive, they may learn from sports teams such as the Oakland A’s that used analytics to help make their most important decisions and win with fewer resources than their competitors. The advent of SaaS BI solutions makes the use of BI for decision-making by more people in an organization more possible than ever before; that’s a statistic that should help us all in the long run.

How does your organization plan to use BI to improve your ability to compete?

Cloud Computing is Democratizing Computing Power…

…and Traditional IT Barriers of Cost, Time, Quality, Scale, and Geographic Location. That’s the striking headline of a press release today from Aberdeen Group, announcing a report, “Business Adoption of Cloud Computing: Reduce Cost, Complexity and Energy Consumption.”

Aberdeen Group surveyed 184 organizations including small, medium, and enterprise businesses, and found a landslide of interest and action in cloud computing:

• 77 percent monitor cloud applications for efficiency and use
• 75 percent have a cloud team or task force
• 69 percent use a formal cloud evaluation process
• 62 percent have a formal education plan for training cloud team

The paragraph I like most from the press release is, “cloud computing is changing the role of IT from predominantly one of maintenance to one of innovation enabler through the new service delivery model of cloud services. Consequently, top companies are realizing the critical need to establish a governance model around SOA architectures and cloud-based service delivery.”

If, according to the paragraph, IT is focusing more on innovation and less on maintenance, and implements SOA to securely expose application functionality for new composite applications and other new purposes, wouldn’t that be good for IT professionals, their companies, and their customers?

The survey also revealed that the top business pressures driving the adoption of cloud computing include:

• Overall cost of IT infrastructure
• Need to enhance competitive advantage
• Lack of flexibility in the current IT environment
• Need to support additional services or users

The report also addresses how cloud computing and virtualization help green IT and sustainability.

I look forward to reading the report over the next several days. I hope you do, too. You can obtain a complimentary copy here until November 27, 2009.

“Small businesses and startups are adopting cloud computing to break down traditional technological and financial barriers in the delivery of new categories of software innovation,” said Bill Lesieur, research director, Aberdeen. “Larger businesses are cutting costs with cloud computing while embarking on a transformation of their IT service delivery models based on SOA architectures and cloud computing.”

Is that quote true for your organization?