Transcript of a sponsored BriefingsDirect podcast on the benefits achieved from a private cloud infrastructure.

1. Cloud Powered Services Delivers Revenue Growth and
Business Agility for SMB Travel Insurance Provider Seven
Corners
Transcript of a sponsored BriefingsDirect podcast on the benefits achieved from a private cloud
infrastructure.
Listen to the podcast. Find it on iTunes/iPod. Sponsor: VMware
Dana Gardner: Hi. This is Dana Gardner, Principal Analyst at Interarbor Solutions, and you’re
listening to BriefingsDirect.
Today, we present a sponsored podcast discussion on how small-to-medium
sized business (SMB) Seven Corners, a travel insurance provider in Indiana,
has created and implemented an agile and revenue-generating approach to
cloud services.
Let’s see how Seven Corners went beyond the typical efficiency and cost
conservation benefits of cloud to build innovative business services that
generate whole new revenue streams. Stay with us to learn more about how a VMware-enabled
cloud infrastructure allowed Seven Corners to rapidly reengineer its IT capabilities and spawn a
new vision for its agility in future growth. [Disclosure: VMware is a sponsor of BriefingsDirect
podcasts.]
Here to share their story on an SMB's journey to cloud-based business development is George
Reed, CIO of Seven Corners Inc., based in Carmel, Indiana. Welcome to BriefingsDirect,
George.
George Reed: Thanks, Dana, glad to be here.
Gardner: When you began this journey to transform how Seven Corners does IT, did you have a
guiding principle of vision? Was there a stake in the ground that you
could steer toward?
Reed: I did. I was brought in specifically to be an innovative change
agent to take them from where they were to where they wanted to get as a business. They just
weren’t there at the time. My vision was come in, stop the bleeding, pick off the low hanging
fruit to step up to the next level, and then build a strategic road map that would not only meet but
exceed the needs of the business and reach out 5-10 years beyond.
Gardner: How long ago did you join Seven Corners?
Reed: I joined Seven Corners in June of 2010.

2. Gardner: So a fairly short amount of time.
Reed: Correct, but you're going to find, as we have this discussion, that a lot of things have
occurred in a remarkably short amount of time.
Gardner: Is there anything specifically about an SMB that you think enabled such agility? I
know it’s very difficult in large companies to make such a change in short order. Do you have a
certain advantage being smaller?
Authority to move
Reed: You do. If you're in a privately held SMB, your goal is to identify a problem or an
opportunity, categorize what it would cost to resolve it or achieve it, and show the
return on investment (ROI). If you communicate that in a passionate, effective
way with the ownership and the executive group, you come out of the room with
authority to move forward. That’s exactly what I did.
Gardner: Before we learn more about that approach and process, perhaps you
could explain for our listener’s benefit what Seven Corners is, how large you are,
what you do, and just describe what you are doing as a business.
Reed: Seven Corners started in 1993 as Specialty Risk International, and as we began to grow
around the globe with customers in every time zone there is, the company changed its name to
Seven Corners.
It started out providing specialty travel insurance, trip cancellation insurance, then began
providing third-party administrator, general insurance services, and emergency assistance
services around the globe. We have about 800 programs in five major product lines to span
hundreds of thousands of members.
The company itself is about 170-175 people. We've been enjoying double-digit growth every
year. As a matter of fact, I believe that at the end of February they hit the double-digit growth
goal for 2012. So we're going to exceed that as the year goes on. You are going to see the
technology has driven some of that growth.
Gardner: Who do you consider your primary customers? Is it travel agencies, or do you go
direct to the travelers themselves, or a mixture?
Reed: About 50 percent of the business is online. You go to the website to fill out a form to
figure out what you need. You buy it right then and there, collect your virtual ID card, and you're
on your way.
We have customers that are high-tech companies who are sending their people all over the world.
They'll buy, at the corporate level, trip cancellation, trip assistance, and trip major medical
insurance.

3. Then, there are universities and other affinity groups. They have students traveling abroad. We
have companies sending people to work in the United States. Then, we are doing benefit
management and travel assistance for numerous government agencies, US Department of State,
Bureau of Prisons, AmeriCorps, and the Peace Corps as well.
Gardner: And on one side of your business equation, of course, you have these consumers and
customers, but you also must have quite a variety of partners, other insurance carriers, for
example, medical insurance providers, and so forth. So you need to match and broker services
among and between all these?
Multiple carriers
Reed: Correct. We have multiple carriers and do some of the advances around Seven Corners.
We’ve got about four more carriers starting to move business our way. So you have to meet all of
their needs, reporting needs, timeliness of service, and support their customers. At the same time,
we've got all the individuals and groups that we're doing business with and we are doing it across
five different revenue-producing lines of business.
Gardner: Let's move back to what it is that you've done, maybe at a high level, an architecture
level. As you had that vision about what you needed and as you gathered requirements in order to
satisfy these business needs, what did you look for and what did you start to put in place?
Reed: The first thing I did is assess what was going on in the server room. On my first day,
walking in there and looking around, I saw a bunch of oversized Dell desktops that were buffed
up to be servers. There were about 140 of those in there.
I was thinking, "This is 2000-2003 technology. I'm here in 2010. This isn't going to work." It was
an archaic system that was headed to failure, and that was one of the reasons they knew they had
to change. They could no longer sustain either the applications or the hardware itself.
What I wanted to do was put in an infrastructure that would completely replace what was there.
The company had grown to the point where there was so much transactional volume, so many
thousands of people hitting the member portals. The cloud started to speak to me. I needed to be
serving member portals out on a private cloud. I needed to be reaching out to the 15,000 medical
providers around the world that we're talking with to get their claims without them sending paper
or emails.
I looked at an integrating partner locally in the Midwest. It's called Netech. I said, "Here is my
problem. I know that within four months my major servers that are backing up or providing our
insurance applications are going to fail. You can't even get parts on eBay for them anymore. I
need you to come back to me in a week with a recommendation on how you understand my
problem, what you recommend I do about it, and what it's going to cost, wheels-on, out the
door."
Gardner: Just to be clear, did you have a certain level of virtualization already in place at this
point?

4. Reed: No, there was nothing virtual in the building. It was all physical. Netech went away and
came back a week later, after looking at the needs and asking a ton of questions, as any good
partner would do. They said, "Here's what we think you need to do. You need something that's
expandable easily for your compute side. We recommend Cisco UCS. Here is a plan for that.
"You need storage that can provide secure multitenancy, because you've got a lot of different
carriers that don't want their information shared. They want to know that it's very secured. We
recommend NetApp’s FlexPod solution for that.
"And for your virtualization, hub and going to the cloud, we're seeing the best results with
VMware's product."
Then, we started with VMware Enterprise, and when it became available, upgraded to vSphere
5.0.
Up and running
They came in with a price, so I knew exactly what it would cost to implement, and they said,
they could do it in three months. I went to the owners and said, "You're losing $100,000 revenue
a month because of this situation in your server room. You'll pay for this entire project in six
months." They said, "Well, get it done." And so we launched. In about two and a half months we
were up and running. Our partnership with Netech has had a dramatic impact on speed-to-
production for each phase of our virtualization.
Gardner: When you looked at creating a private-cloud fabric to support your application, were
these including your internal back-office types of apps? Did you have ERP and communications
infrastructure and apps that you needed to support? Clearly, you talked about portals and being
able to create Web services and integrate across the business processes, all the above. Did you
want to put everything in this cloud or did you segment?
Reed: I wanted to get off the old analog phone system that was there and go to a Cisco Unified
Communications Manager, which is a perfect thing to drop into a virtual environment. I wanted
to get everybody on the voice-over-IP (VOIP) phones. I wanted to get my call center truly
managing 24×7×365, no matter where they were sitting.
I wanted to get users, both customer users, partner users and then the people from Seven Corners
to get to where it didn't matter what they were connecting to the Internet with. They could
connect to my system and see their data and it would never leave my server, which is one of the
beauties of a private cloud, because the data never leaves a secure environment.
Gardner: Did you get a vision to bring all of your apps into this or did you want to segment, sort
of was this a crawl-walk-run approach to bringing your apps into this cloud or was this more of a
transformation, even shock therapy, to kind of do it all at once to get it done?
Reed: The server virtualization was a shock therapy, because the infrastructure was very
outdated, and any piece of it failing is a failure. It doesn’t matter which one it was.

5. So we took a 144 servers virtual and took all the storage into the NetApp controller, achieving an
immediate 50 percent de-duplication rate. And the efficiency in spinning up servers for a
development group to support them, was such that we were cutting ton of manpower that was
required to spin those up. Instead of 4-5 days to set up a server for them to work on a new
application, it's 4-5 minutes.
Gardner: So you were fairly smart in thinking, "I’ve got to find success stories and implement
those and that's going to then feed the goodwill and the investment to move across the board."
Reed: Exactly. In the first three days here, inside IT and out in the business, I said, "I need a list
by Friday, please, of the top five things we need to keep doing, stop doing, or start doing."
I got great input and then I picked the pain points. That's what I call the low-hanging fruit. We
knocked those out the first month, just general technology support. That got everybody thinking,
"Hey, IT can deliver." Originally they had a nickname for the department --"The Island of Dr.
No." No, we can't do this, no, we can't do that.
Getting champions
We said, "Let's find a way to say yes, or at least offer a different solution." When we killed
some of those early problems, we ended up getting champions out of opposition. It became very
easy to get the company to do business differently and to put up with the testing, user acceptance
process, and training to use different technology services.
Gardner: Sometimes, I hear that culture will trump strategy. It sounds as if in your organization,
maybe because you're an SMB and you can get the full buy-in of your leadership, you actually
were able to make culture into the strategy?
Reed: Absolutely. By changing the culture and getting the departments out there to ask, "Is this
stuff you're doing going to help me with this problem?" "Well, yes it will," and then you deliver
on that promise.
When you make a promise and you deliver on it, on or ahead of schedule and under budget
people begin to believe, they're willing to participate and actively suggest other possible uses
with technology that maybe you didn't think of. So you end up with a great technology-business
relationship, which had the immediate result for the owners who were out looking to buy an
insurance services application or rent one.
They said, "We're a very entrepreneurial company with so many different lines of business that
there is nothing out there that would really work for us. We believe in you IT. Build us one." This
year we rolled out an application called Access that is so configurable you could run any kind of
insurance services through it, whether you're insuring parrots, cars, people, trucks, or whatever.
Gardner: Let's learn some more about that. One of the nice things about early successes is that
you get that buy-in and the cultural adoption, but you've also set expectations for ongoing
success. I suppose it's important to keep the ball rolling and to show more demonstrable benefits.

6. So when it came to not only repaving those cowpaths, making them more efficient, cutting cost,
delivering that six-month return on investment, what did you enable? What did you then move
forward to to actually create new business development and therefore new revenue?
Reed: By continuing to lower IT cost, when we virtualized the desktops using VMware's View,
and then VMware's Horizon which makes it device-independent, it’s easier for everybody to
work. That had appreciable productivity improvements out in the departments.
At the same time, my apps development group began designing and building an application
called AXIS. What this came out of was that when we went to insurance conventions, talked to
carriers and asked, "What are the top ten reasons you want to fire your third-party administrator
today?"
Technology was always part of those top ten answers. So we devised and developed an
application that would eliminate those as problems.; The result is that this year, since February,
we have four insurance carriers that were working with either their own stuff or third-party
administrator, big COBOL mainframe monsters that are just so spaghetti-coded and heavy you
can never really get out of it.
Already implemented
They see what our tool is doing and they ask these questions. "What are the specs for me to be
able to connect to it?" "Well, you have to have an Internet connection and something smarter
than a coffee cup." "That’s it?" "Yeah, that’s it." "Well, what’s the price for us to implement your
solution?" "None. "It’s already implemented. You just import your business."
The jaws drop around the table. "How will I be able to see my data?" "You’ll all get in and look
at it." "You mean I don’t ask for a report?" "You can, but it’s easier if you just log and look at
your report."
They're flocking in. The biggest challenge is keeping up with the pace of the growing business
and that goes back to planning for the future. I planned a storage solution and a compute
solution. I can just keep adding blades and adding trays of storage without any outage at all.
Gardner: Pay as you go.
Reed: And the neat thing is that that the process of closing transactions will run about seven
million in revenue a year. It will cost about a million and a half to service that revenue. Not a bad
profit base for an SMB. And it’s because we're going to come in at 45 percent less than their
existing service provider and we're going to provide services that are 100 times better.
Gardner: So if I understand correctly, George, you're saying that you went from being a broker
of services, finding insurance carrier services, and then packaging and delivering them to end
users, to now actually packaging insurance as a service. You're packaging the ability to conduct
business online and packaging that, in addition, to the value-added services for insurance. Does
that capture what’s happened?

7. Reed: It does, and providing immediate access to what any stakeholder in that insurance
lifecycle needs improves the quality of the end product. It lowers the cost of the healthcare.
We're starting to get into the state Medicaid benefits management as well. We're saying, "You're
spending too much." The first slide in the proposal is always, "You're spending too much on
Medicaid healthcare. We're going to help you cut it down and we are going to do it right now."
You get attention, when you just walk in bold as brass and say that.
With a solid, virtual, private-cloud solution, the cost of delivering technology services is just
very low per member service. In insurance, there are only so many ways to improve profit. One
is to grow business. We all know that. But, two is to reduce the time and price of processing a
claim, reduce the time and price to implement new business and collect the premium.
We’ve built an infrastructure and now an application platform that does those things. In the old
system, the time to process a claim around here was about 30 minutes going through a complex
travel medical claim with tons of lines. Now it’s about 15 seconds.
Gardner: This is really fascinating. It strikes me that you’ve sort of defined the future of
business. Being an early adopter of technologies that make you agile and efficient means that
you're not only passing along the ability to be productive in your traditional business, but you’ve
moved into an adjacency that allows you to then take away from your partners and customers the
processes that they can’t do as well and embed those into the services that you provide.
When, of course, you can charge back to them at a rate that was lower for them in the first place.
You can really grow your definition of being a business within your market.
Think big
Reed: That’s correct, and you can do this in any industry. There is a talk that I’ve given a
couple of times at Butler University about how you can never stop being small, until you think
big. You have to say, "What would it take for me to do that? Everything is on the table. What
would it take?"
My boss does that to me and my direct reports as well. "What would it take for us to accomplish
this thing by this time? Don’t worry about what it is. Just tell me what it would take. Let’s see, if
we can’t do it." That’s the philosophy that this company was built on.
By the end of the year, we're not only going to be doing all that kind of service for carriers, but
we are going to stand up an instance of AXIS to be software as a service and every small third-
party administrator (TPA) in the country is going to have an opportunity to buy seats at this
servicing application that is easily configurable to whatever their business rules are.
Gardner: I think what distinguishes you, or characterizes you, is being able to do this because
you’ve been bold in your IT investments and adoption of modernization. Yet also as an SMB,
you can be agile and fleet, get the buy-in, and make the decision.

8. Then, you're also in a brokering role. You're between a group of businesses, the carriers, and
customers, so that you're in a hub role within your business and that gives you this opportunity.
Those are some interesting takeaways, but let’s focus a little bit on the technology, George.
What’s the platform that you put in place? What are the actual VMware products that you're
using? And is there a developing virtual pattern of benefits? That is to say, is there a whole
greater than the sum of the parts at some point in this?
Reed: There definitely is. We're running on vSphere 5.0 and have put in a vCenter Configuration
Manager and Operations Manager. We're doing our virtual desktops using the power of ThinApp
and VMware Horizon.
Of course, we're a beta user for VMware View. We were just doing a pilot project on that, but the
speed was so much better than their actual desktops that the whole company said. "To heck with
the pilot. Roll it out." So we ended up rolling it out fairly quickly and aggressively.
Then to make the cloud come to being we got the vCloud Director and vShield in. We're doing a
lot of business with the government, and with government agencies we have to be Federal
Information Security Management Act (FISMA) compliant which makes HIPAA compliance
look kind of easy.
We’ve got SAS 70 compliance we have to do. By putting in these kinds of technology platforms,
we configure it from day one and we're compliant with all the controls that are supposed to be in
place.
The other technology that the VMware is living on is the Cisco UCS, and it’s all being stored on
NetApp FlexPod with data replication. In a few months, it will be live mirror for both compute
and the data.
Disaster recovery
Gardner: How about disaster recovery (DR)? Have you been able to develop some more
automated approaches to that as a result of this cloud activity? Is there a sense of reduced risk
which, of course, for insurance broker and services provider would be very important?
Reed: Absolutely. It's the first question I get asked every time a due diligence comes in. This
year, I’ve had to get pretty good at due diligences from carriers and big healthcare networks.
That’s another area we’ve started branching and taking over.
Site Recovery Manager (SRM) is your friend, because it makes it so easy to say, "We went down
at the Carmel location. Well, we’ve got a live mirror and duplicate compute sitting down at the
lifeline. Pull that SRM, direct production to there, rebuild the Carmel site and then SRM will
turn it back on in no time at all."
The most time down we could possibly have right now is about a minute-and-a-half, and it’s
going to be down to seconds, once the live mirror is there.

9. Gardner: So these folks come to you and say, "You're showing us a price and performance level
that you can do these services better than we can." But it also sounds like you can be compliant,
face all the various regulations, and develop a sense of no risk.
Reed: Correct. I designed the approach based on the things that always made me raise my
eyebrow and say, "Yeah, cloud computing." We looked at a lot of the huge cloud service
providers. If you read the fine print of the licensing agreements, they don’t actually take full
responsibility for the security of their infrastructure and/or your data.
Some of them don’t even agree that they have to give your data back if you stop working with
them. That makes big companies that aren’t tech savvy really leery. "Do I really want all of my
patients or all of my insured information sitting out there?" We also see things about information
breaches everyday in the news.
That’s why I went after something that I could put in the Department of Defense facility and not
have a problem. I know there's no chance that I'm going to have a challenge, a data breach, or a
data loss. That is the first question on every due diligence questionnaire, data recovery and
continuity of operations.
Gardner: Now, you’ve mentioned the use of View, is that the View 5, the latest version?
Reed: It is. It is.
Gardner: What percentage of your desktops, your users are virtualized on a full desktop
experience?
Reed: We’ve got 99.9 percent. We have one user, a remote user out in Arizona, and we just
haven’t gotten to her yet, but we’re just about to lose her desktop.
Mobile devices
Gardner: And how does that now set you up for perhaps moving towards the use of mobile
devices? Clearly, you've got some of those interface issues resolved by going fully virtual. Is
there a path to allowing choice, even bring your own device (BYOD) types of choice by your
users going to new classes of devices?
Reed: We’re working on the BYOD program now. A lot of the department heads have been
issued devices through our secure wireless in the building. A couple of them have iPads and a
couple of them have Android OSs. Several of us with the new Cisco phone systems have the
Cisco tablet that's your actual VoIP phone station and your thin client.
To get ready to go to a meeting, I get off the phone, pull the tablet out of the docking station, and
into the meeting. I have my desktop right there. I've never logged off. When I need to go home
for the night, I take it home, and log in through my wireless. I have my Voice over IP handset,
and I'm calling from my desk phone from anywhere in the world.

10. So we're already doing what I would call a pilot program to prove it out to everybody and get
them used to it. Right now, our sales guys love the fact that they just pull that thing out of the
docking station and go off to show a client what our software and services really are.
Gardner: It really shows how the technology enables the business and then the business agility
enables the business development. It becomes quite an impressive adoption pattern that's really
going to a virtuous adoption pattern I suppose.
Reed: The key is that with the BYOD setup, we put a Cisco IronPort secure wireless in the
building. Once you’re in our network, that's very secured and controlled. Then, we tell anybody
who brings in their own device, "Here’s what you have to do. These are the steps and encryption
levels that you have to do to use your own device on our system."
People in the pilot program are going through that and their device is being signed off on. It
comes all the way up to my desk to approve it at this point. I'm sure that down the road, it’ll be
just the company security officer signing off on it.
But those people are now connecting from wherever with their own device and they have a
responsibility to support the device. If their device goes down, they can still log in to their virtual
desktop from anywhere through View 5.
Gardner: We all know how empowering it is when you can have it your way, remain within
compliance and security parameters, and also delivering on the business processes and
requirements that your company sets out for you. It’s a really nice combination.
Reed: For people with smartphones and tablets, when they’re connecting through VMware
Horizon, they get other benefits. If you have to get a new phone, all you do is let Seven Corners
know.
Virtual ID cards
They withdraw Horizon and everything attendant to it from the smart device remotely without
impacting anything else on it. You take your smartphone down to Verizon, get a new phone, have
the stuff that belongs to you transferred over to the new phone come, and that will reinstall.
We're going to be writing Android and iPad applications for our AXIS solution, which will then
mean is a traveler doing a backpack tour on the Great Wall of China falls off, breaks his leg, and
gets carried off to the medical provider that’s in our network -- after he calls our 24×7 assistance
center -- we’ll use virtual ID cards that could be scanned by the tablet computers.
We're going to send those out to every one of our providers, and they can confirm eligibility right
there, give the treatment, submit the claim, watch it auto-adjudicate in our system, and see the
payment launched. This makes providers want to work with us, because they know that they are
going to get paid and they watch it happen.

11. Gardner: That's a really impressive story, George, and you've been able to do this in just a
couple of years. It’s really astonishing. Before we close out, could you provide some advice to
other SMBs that have heard your story and can see the light bulbs for their own benefits going
off in their heads? Do you have any advice in hindsight from your experience that you would
share with them in terms of getting started?
Reed: The key is that you can’t get to where you’re going if you don’t set the vision of what you
want to be able to do. To do that, you have to assess where you’re at and what the problems are.
Phase your solutions that you’re going to recommend to solve big problems early and get buy-in.
And when you’ve got executive buy-in, you have department heads and users buying in, it’s easy
to get a lot of stuff done very quickly, because people aren’t resisting the change.
Gardner: We’ve been talking about how travel insurance provider Seven Corners has created
and implemented an agile and revenue-generating approach to cloud services. We’ve seen how as
an SMB, Seven Corners has used a VMware-centric infrastructure to rapidly reengineer its IT
capabilities and build innovative business services that are generating whole new revenues.
So thanks to our guest. We've been joined here today by George Reed. He is the CIO of Seven
Corners. Thanks so much, George.
Reed: Thanks for having me on.
Gardner: This is Dana Gardner, Principal Analyst at Interarbor Solutions. Thanks to you also,
our audience, for joining and come back next time.
Listen to the podcast. Find it on iTunes/iPod. Sponsor: VMware
Transcript of a sponsored BriefingsDirect podcast on the benefits achieved from a private cloud
infrastructure. Copyright Interarbor Solutions, LLC, 2005-2012. All rights reserved.
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