There may have been doubts in the recent past about where cloudtechnology fit into the insurance IT landscape, but that all seemsforgotten now. I spoke to a few vendors while here at the IASAconference about the effect cloud is having on their business andmy inquiries were met with enthusiasm.

Phil Kiekhafer, director of marketing for ISCS had a simpleresponse when I asked where his company is headed: ISCS recentlyhired a senior director of cloud, he says. That's one way todisplay confidence in where things are headed.

The reason is fairly simple: "Cloud will reduce implementationcosts so much," said Kiekhafer.

Kevin Mason, director of product development for Instec pointsout the reason insurers are putting aside their concerns aboutsecurity issues is because of the cost savings.

"When it comes to a data center in the cloud, economics trumpssecurity," says Mason.

Of course there are few areas that economics does not trump inthe business world and the list of things it won't trump isprobably made up of illegal activities.

It's not that insurers are no longer worried about security inthe cloud, but if they waited for every security environment to beflawless their patience would be sorely tested.

After all, insurers are still fighting security issues on theirown hosted servers, so why is the cloud more dangerous? The answeris it's probably not much more dangerous, but companies seem tofeel more secure when their data is locked away in their very owndata center.

Mason points out the battle between Amazon Web Services andMicrosoft Windows Azure for control of the market has beenbeneficial to everyone. An old-fashioned price war has been takingplace over the past year and vendors such as ISCS and Instec canonly smile as they pass the cost savings along to a gratefulcarrier population that likes nothing better than a reason to smileitself.