Published by analyst Craig Lowery on August 16th, 2022.
Cloud downtime insurance automatically pays claims when a public cloud service is observed to be unavailable. Product leaders can partner with licensed financial services institutions to augment their cloud service offerings with value-added service options.
Product leaders evaluating the emerging trend of cloud downtime insurance with respect to their product and service offerings should:
Cloud downtime insurance is designed to help cover losses that arise due to cloud service outages. The coverage is based on a parametric insurance model, in which observable and quantifiable events lie at the core of both policy coverage definition and the determination of a qualifying claim. A prime example would be observing that a public cloud service has become unavailable for an amount of time that exceeds a threshold defined in the policy for that service. In such a case, the policy would dictate the payout of a monetary benefit as agreed upon in the policy. Figure 1 shows three critical insights that product leaders should understand about cloud downtime insurance, and three associated potential impacts on their cloud-based products and solutions portfolios. Table 1 provides details that further help define cloud downtime insurance by emphasizing both what it is and what it is not.
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