Nib shutters last datacentre, moves most workloads to AWS

Australian health and travel insurance provider Nib has closed the last of its seven datacentres last month after the final workloads were migrated to public cloud services in February 2024.

The datacentre, which was on the company’s own premises, will be converted to additional office space. The rest were in co-location facilities.

The latest move marks the end of Nib’s nine-year cloud migration programme where over 95% of its workloads have been migrated to AWS, with the rest going to other providers.

Brendan Mills, group CIO of Nib, explained that while the project started small, the goal was to reduce the datacentre footprint to zero. Moving to the cloud was seen as an opportunity to increase agility, and to focus technology investments on delivering services to customers rather than running datacentres. Nib selected AWS for its product set, scale, and “ability to partner with customers”, he said.

While planning for the migration began in 2015, the first major step involved Nib’s corporate health insurance business, GU Health. This was one of the first cloud migrations of an insurance system of record in Australia, and involved working closely with the sector’s regulator, the Australian Prudential Regulation Authority (APRA).

Nib has grown rapidly over the course of the migration, partly through acquisitions that added to the number of datacentres and workloads.

“AWS allows Nib to expand its current use and future exploration of artificial intelligence [AI] and the ways that AI might drive Nib’s consumer-facing businesses as they grow to support Australians managing their everyday health,” said Mills.

“The move is very much a strategic decision on many fronts. We are confident about the environment; AWS provides us with agility and flexibility, it allows Nib to build capability in the way we operate our business and contain costs.”

The final stages of the migration involved moving multiple extreme inherent risk (EIR) systems that could threaten the ability of the company to meet its obligations if they were disrupted.

“By transferring these EIR systems, we've further fortified our technology backbone, ensuring that critical operations are running on advanced and resilient platforms,” said Mills.

While it is hard to be certain, Nib is thought to be the first Australian insurer to move completely to the cloud.

Mills admitted the process had not been easy, adding that the biggest problems were “momentum and prioritisation” in that supporting business growth was more important than making progress with the migration. However, he pointed out that it probably would not be possible to keep up with Nib’s growth rate if the company had relied solely on on-premise systems.

The company also had to work closely with APRA to ensure that its plans remained aligned with the regulator’s cloud guidelines, while technical issues included the need to refactor some applications to suit the cloud environment.

Cloud optimisation is an evergreen project, Mills added, and Nib works with AWS to ensure that it is paying for the right things and avoids cloud sprawl. Mills said that “we manage AWS pretty tightly” to get the desired outcome.

Rianne Van Veldhuizen, managing director of AWS in Australia and New Zealand, said: “Nib has been at the forefront of leveraging the depth and breadth of our services since 2017, especially in the use of AI and machine learning.

“Migrating 95% of its workloads to AWS has allowed Nib to remain resilient and agile, extract key business insights, develop personalised member experiences, and improve the cost and operational efficiency for members,” she added.