Cloud Helps Speed Innovation, Put Brakes on Costs

The cloud continues to be the catalyst for fueling innovation, cutting costs and significantly cutting down on the time it takes a critical product or service to reach customers and the workplace, according to several recent reports.

From underwriting, billing and claims processes in the insurance industry to automotive manufacturing in Detroit, the cloud stands to streamline the historically complex and time-consuming IT underpinnings of these services.

Cloud and “appification” are also changing the frequency and speed of developing software and, in turn, the way technology providers deliver those features.

In Ovum’s “2013 Trends to Watch: Cloud Computing” report, Laurent Lachal, senior analyst at Ovum Software, said cloud computing promises to tackle two nearly irreconcilable IT challenges: the need to reduce costs and the need to boost innovation.”

Lachal believes this year will produce results from those challenges.

“It takes a lot of effort from vendors and enterprises to actually make it work, and they will succeed in making it work in 2013, both on their own and as part of increasingly complex ecosystems,” he said, according to an article on CIOL.com.

Cloud computing in all its guises (public, private, and hybrid) is building momentum, evolving fast and becoming increasingly enterprise-grade, he said.

At this week’s North American Auto Show in Detroit, the cloud found itself both in the driver’s seat and on the assembly lines of production plants.

Many  automotive innovations at the show highlighted connectivity, apps and customized driver experiences.

“Entirely new application categories…can be explored – safety, energy efficiency, sharing, health. The list goes on,” said Paul Mascarenas, Ford vice president and CTO, according to an article on FortMillTimes.com.

Computer servers and apps once were much more dependent on specific hardware. Now, most apps are hosted in the cloud, utilizing both cloud computing and cloud storage instead of on traditional physical servers.

“Cloud computing sets app developers free by removing the headache of buying and maintaining hardware; instead, they can focus on the user experience,” said Mike Klein, co-CEO of Online Tech, a Michigan data center that offers cloud computing hosting for mission critical applications in the automotive and other industries.

“We’ve seen our clients leverage cloud computing to coordinate just-in-time manufacturing inventory, transportation logistics and consumer services,” Klein said.

But cloud computing isn’t just accelerating innovation; it’s protecting the availability and integrity of critical business processes and systems.

With huge fines and significant business loss as the results of disrupting the manufacturing workflow, automotive suppliers can’t afford any downtime. If the right piece isn’t there at the right time, a cascade of consequences can disrupt manufacturing. Cloud computing “protects just-in-time and mission critical services by scaling up resources quickly and allowing faster recovery should the unthinkable happen; it’s all about keeping your options open,” Klein said.

The cloud may not be as recognizable as a sullen caveman or a particular duck, but its presence is just as important in the insurance sector.

Brian Vannoni, director of product marketing for Guidewire Software, said the firm wanted a hybrid model blending the best attributes of on-premise and cloud-based software. So they launched Guidewire Live, a series of hosted applications intended to augment the functionality of the Foster City, Calif.-based company’s underwriting, policy administration, billing and claims systems.

The advent of the cloud and app-driven development has freed business units to adopt new technology without taking the time to involve the IT department, Vannoni said, according to an article on BusinessInsurance.com. “Previously, the cycle time for technology-based innovation was so long that it stifled business innovation,” he said.

Kathy Burns, Chicago-based CEO of Aon eSolutions, which provides cloud-based and on-premises software to risk managers, said the advance of technology will help risk managers shift their focus from the tactical concerns around data aggregation to broader, strategic goals.

“Historically, risk managers have thought more about technology to help them with the efficiency of their processes,” she said. “Now that the process-oriented tools are more firmly in place, they want to spend more time evaluating and understanding data that they can use to drive down their total cost of risk. It’s becoming more about what you can do with data.”

Patrick Burke is a writer and editor based in the greater New York area and occasionally blogs for Rackspace Hosting.