Hello and welcome to Protocol Enterprise! Today: this startup thinks cloud buyers are ready to start buying cloud downtime insurance, Google Cloud jumps on the blockchain, and AWS goes on-premises.
Spin up
Companies that moved to the cloud during the pandemic might be in for a rude surprise. According to research from Anitian, 62% of cloud newcomers said their cloud migrations were motivated by the desire to save money, but that’s not how it usually works out in the beginning.
A hedge against downtime
In December, when AWS had a major outage in its Northern Virginia region that brought down apps, websites and services reliant on its cloud computing platform, Parametrix Insurance jumped into action.
The 3-year-old startup offers cloud downtime insurance to compensate policyholders for their financial losses — or their customers’ losses — when their cloud provider has a service disruption. On average, one of the three major public cloud providers — AWS, Microsoft Azure and Google Cloud — experienced an outage lasting at least 30 minutes every three weeks in 2021, according to Parametrix.
- “These types of events are what we're here for,” said Neta Rozy, a Parametrix co-founder and its chief technology officer.
- “When we identify downtime, we pay out for the customer immediately. Any loss is covered. Unlike traditional insurance where you have to file a claim, in this case, there's no claim process,” she said.
- Parametrix says its downtime insurance fills a critical gap in the insurance space, and complements other types of insurance coverage, such as technology errors and omission insurance or cybersecurity insurance policies.
- Coverage is triggered after a one-hour waiting period — the shortest waiting period on the market, according to Rozy, who said most traditional cybersecurity coverage comes with at least eight- to 10-hour waiting periods.
Parametrix developed a proprietary cloud monitoring system that produces more than 700 million data points per week. Its cloud downtime insurance covers 18 AWS services, 13 Microsoft Azure services, 15 Google Cloud services and offers some coverage for Oracle Cloud.
- To get started, Parametrix and its customers agree on the dollar value of the coverage they’ll need for each hour of downtime.
- It offers a free risk assessment and will recommend a coverage amount based on the type of customer as well as its industry, revenue and other factors, but customers can opt for less or more coverage. There are no deductibles.
- The company, which is selling its policies in the United States, Europe, Israel and Japan, has hundreds of customers, according to Rozy. Its “sweet spot” is enterprises — companies that are focused on risk management and trying to protect against any financial losses — as well as cloud-dependent businesses.
Syte, which offers a product discovery platform for brands and retail, is a Parametrix customer.
- “We leverage visual AI to improve search and discovery experiences for shoppers and to drive revenues for retailers,” CEO Vered Levy-Ron said.
- “If our platform were to go down because of a cloud outage, this would result in a poor shopper experience and our customers — the retailers — would lose out on revenue. Buying cloud downtime insurance allows us to mitigate this risk of lost revenue and ensure that we are able to compensate customers for any missed [service-level agreements] due to cloud downtime,” she said.
- Syte has yet to have a downtime incident since signing up for the coverage but, Levy-Ron said, “were we to have had an outage prior to being insured, we would have been forced to use money from our cash balance sheet and incur unanticipated expenses.”
Like almost all major cloud customers, many of Parametrix’s customers have service-level agreements (SLAs) with cloud providers, which award credits when they fail to meet a certain minimum monthly uptime percentage.
- That’s different from covering financial damage caused to a business.
- Parametrix’s policyholders can use their payouts to cover financial losses including lost revenue, lost end-user and employee productivity, customer compensation, lost or damaged data and reputational damage.
- Parametrix typically offers downtime insurance for up to 18 hours of coverage, but coverage can be customized to last longer if needed. Premiums, which are determined by the desired amount of per-hour coverage and a customer’s cloud infrastructure, can vary from $10,000 annually to $500,000 annually.
- “We've had companies want $1 million for every hour of downtime,” Rozy said.
The claims environment for cyber insurance is volatile right now, and there aren’t a lot of companies looking to enter the market with new products such as cloud downtime insurance, according to Rachel Jenkins, customer success manager and managing director of insurance broker Founder Shield.
- “A lot of carriers have experienced an increased amount of claim payments that they’ve had to pay, which has made them reduce their appetite,” she said. “You've seen rates really increase. We've had carriers completely pull out of the cyber market, so I was pleasantly surprised with what [Parametrix has] been able to offer. And they have really been able to leverage technology in a way that … we really do identify with and our clients identify with as well.”
A MESSAGE FROM WORKPLACE FROM META
100% of C-suite staff surveyed by Workplace by Meta said that frontline workers were a strategic priority for their business in 2022, but nearly two in three of them said that keeping their frontline staff, who bear the brunt of the stresses of the workplace most acutely, had only become a priority since the pandemic hit.
This Web goes all the way to 3
Google wants to make its cloud platform the first choice for developers working on blockchain, cryptocurrency and other emerging Web3 applications.
It’s setting up a new Google Cloud product and engineering team to build services and tools to help Web3 app developers in what Amit Zavery, general manager and head of Platform for Google Cloud, called “one of the most cutting-edge areas in tech.”
“While the world is still early in its embrace of Web3, it is a market that is already demonstrating tremendous potential, with many customers asking us to increase our support for Web3 and crypto-related technologies,” Zavery said in an email to Googlers today obtained by Protocol.
James Tromans, currently technical director in Google Cloud’s Office of the CTO, will lead the new Web3 team. The former Citi executive has played a key role in Google Cloud’s Web3 efforts since joining the cloud provider in 2019, according to Zavery.
The Web3 team’s initial work will focus on creating real-time data and analytics capabilities for blockchain data, making it easier to run blockchain nodes and enabling Google Cloud’s enterprise customers and emerging Web3 companies to participate in the space, according to Zavery. Google Cloud Web3 customers include blockchain and distributed-ledger-based companies Hedera Hashgraph, Theta Labs, Block.one and Dapper Labs.
“We will also contribute to open-source projects directly on behalf of Google to ensure the continued viability and openness of the broader Web3 market,” Zavery said.
— Donna Goodison (email | twitter)
Around the enterprise
AWS released video-analytics software that will run inside data centers on servers built by Lenovo, which is not a combination of words we ever expected to type.
Nvidia was slapped on the wrist by the SEC for failing to disclose the impact of cryptocurrency mining on revenue coming into its graphics chip division.
A MESSAGE FROM WORKPLACE FROM META
Businesses are starting to turn to workplace communication tools. Such tools enable frontline workers to feel more connected to the rest of their business, to raise concerns and to provide feedback on potential pain points or points of improvement. By bridging that divide, companies can unlock new savings and efficiencies, and build a business that can last for the long run.
Thanks for reading — see you Monday!