Published by analyst Gabriella Brown on Monday, August 8th, 2022
Parametrix Insurance provides insurance for cloud service outages, as well as e-commerce, payment, CRM and CDN service outages. With the company's founders coming from a strong tech background, Parametrix has developed a proprietary system built to continuously monitor a variety of third-party IT services across the globe for outages and interruptions. By collecting granular data on service interruptions, Parametrix (named for the parametric cost modeling it uses) is able to automate compensation in the event of an outage, meaning customers do not need to submit a traditional claim or provide proof of loss in order to be reimbursed for an outage they experience.
In the event of a cloud outage, enterprises have traditionally had few options to recoup costs. Parametrix aims to provide enterprises with an additional option for cloud downtime response by offering insurance coverage for even short cloud outages and automating the entire process from detection to payout. Parametrix's ultimate offering, however, isn't so much the monetary reimbursement in the event of a cloud outage, but simplicity. Regardless of the outage duration or complexity, Parametrix's insurance platform enables an enterprise to receive full compensation for every hour of cloud downtime, with waiting periods as low as one hour, with no additional lift, paperwork or haggling. As the field of downtime insurance grows, Parametrix's "downtime insurance made simple" approach, enabled by its unique monitoring system, is likely to prove a valuable differentiator for the company's cloud downtime insurance offering.
Cloud is quickly becoming the foundation on which everything else is built. 451 Research's Voice of the Enterprise: Cloud, Hosting & Managed Services, Budgets & Outlook 2022 survey found that 53% of respondents worked for an organization that used IaaS, PaaS or public cloud, while 64.6% used some form of SaaS and hosted apps. In fact, only 4.2% of respondents replied that their organization didn't use any version of cloud or hosted services.
While cloud is everywhere, cloud downtime insurance is another story. Traditional cybersecurity policies are built with security top of mind – meaning if a cloud outage takes place without the occurrence of a cybersecurity incident, businesses won't be eligible for an insurance payout. Some cloud providers, including Microsoft Corp. (Azure), AWS and Google Cloud, have offered customers compensation in the case of major outages, but only as credits to their normal payment and not as compensation of lost revenue or opportunity. Parametrix's primary strategy, then, is to fill the gap in coverage by offering downtime insurance that covers practically any type of cloud service outage. As of May, Parametrix claims to be the world's only downtime insurance provider, a point which is highly emphasized throughout the company's marketing efforts and strategy.
Parametrix's promise of parametric downtime insurance is made possible through the company's proprietary monitoring system, which tracks the performance of a multitude of third-party cloud- based services. The data collection system is continuous, and according to Parametrix, collects millions of data points each week. Data is collected using functionality tests, which indicate when a service is degrading and then identify the duration, location, severity, dependencies and other parameters relating to the incident. This collection of real-time data not only alerts to any downtime or outages, but also serves as the basis for the index that Parametrix uses to build risk and pricing models for each individual customer.
Because of the company's network approach to cloud monitoring, customers aren't required to install anything on their own systems; instead, Parametrix globally detects cloud downtime and outages and then triggers a claim for customers that have been affected. Both customers and partners can monitor their account through dashboards that include functionalities such as event detection, status data, performance suggestions, operational insights and industry benchmarking.
Parametrix effectively monitors the cloud from within the cloud, necessitating the use of a multicloud network to ensure that any outages don't knee-cap the company's own cloud-based monitoring system. Zones, regions and clouds are diversified to ensure the company's technologies don't go down in the middle of the outages the system is tracking.
Read the full story at 451research.com.