Healthcare organizations continuing shift to off-premises computing

While running applications in a hosted environment is the most common approach, providers see increased use of public and private clouds.

Healthcare organizations are continuing efforts to move at least some of their applications or information technology offsite.

However, the shift is still in the early phases, as few providers are able to move to products or services that are truly optimized for a cloud computing environment.

According to a recently released survey by KLAS, a healthcare IT research organization, about 70 percent of the healthcare organizations it recently contacted have moved at least some applications or IT infrastructure off premises.

However, those organizations primarily are using hosted environments, in which program vendors run legacy applications in their owned and operated data centers. However, KLAS researchers say most healthcare organizations are indicating they have plans to use cloud computing in either a public or private form.

For the research, KLAS interviewed IT executives at 144 healthcare organizations to discuss current and future plans for off-premises computing. That move is already underway, although the shift to true cloud computing is a ways off, says Mike Smith, vice president of financial and services research, who wrote the report for KLAS.

Most of the shift to off-premises computing has come in the area of electronic health records, where nearly 60 percent of organizations contacted by KLAS have moved their EMR applications to a hosting or cloud environment.

Cerner is the most used off-premises computing provider in the industry and continues to garner interest from existing and potential clients, the research notes. Epic, a relative newcomer to hosting, is garnering interest among organizations that want to have the vendor host its products at its data center in Verona, Wis.

Interest in purer forms of cloud computing is growing, Smith says, but providers have limited options for choosing applications that have been designed for a cloud computing environment. KLAS describes these as either running on a public cloud—with shared infrastructure and multiple tenants using it—or a private cloud, with dedicated servers for single tenants. KLAS defines three service models for the cloud—Infrastructure as a Service (IaaS), Platform as a Service (PaaS) or Software as a Service (SaaS).

Of those, interest in IaaS is growing fast, because “it enables you to leverage infrastructure that is off premise,” Smith says, thus enabling provider organizations to only pay for services that they really need. “Some really like that, because if they don’t have to build a data center, they can still leverage the convenience that comes with IaaS.”

Providers are considering transitioning off-premises computing to the cloud through an IaaS model to Microsoft’s Azure or Amazon AWS. KLAS says respondents most often consider Amazon for their future IaaS and PaaS needs, and many perceive it as an infrastructure leader. “While Microsoft is considered more frequently overall than other off-premises computing providers, they are just behind Amazon among those who would consider or are considering broad infrastructure solutions,” KLAS concludes.

Many providers have had limited experience with public cloud computing, although they are gaining familiarity and comfort through Office 365, and Google’s Gmail, setting the stage for broader expansion to use IaaS, Smith says..

Other providers say they are planning to use public cloud providers for storage, backups, file sharing, email archiving, websites, or non-clinical applications; however, they are apprehensive about putting sensitive protected health information in the cloud, particularly the public cloud.

An area that’s ripe for off-premises computing involves enterprise resource planning (ERP) or human capital management (HCM) applications. KLAS found that 17 percent of provider organizations have moved their ERP or HCM applications off-premises, and of those, nearly three out of four have done so through a hosted deployment model.

However, Smith believes this will shift toward the cloud in the future, because most major software vendors have developed cloud-based applications. While Oracle and Infor are major providers of ERP and HCM applications and primarily support legacy customers, both have recently developed new cloud-based solutions that can be deployed on-premises or in the cloud.

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