There's cloud computing, and then there's health care cloud computing. And while there's not necessarily a ton of activity for the former, activity is picking up in the latter.

Cloud computing as commonly defined is when a business gives its data, applications, storage and computational power to a cloud computing provider and accesses those resources via the public Internet. It's been a godsend for many organizations, most notably small enterprises that can save enormously on infrastructure costs and have access to highly skilled I.T. expertise that they couldn't afford otherwise. and have quickly become giants in the "public" cloud service sector thanks to the convenience and low start-up costs for their services. International Data Corp., a technology research firm, estimates in a recently released report that the cloud software market reached $22.9 billion in 2011, a 31 percent year-over-year growth increase. The market is expected to reach $67.3 billion by 2016 at a compound annual growth rate of 24 percent. IDC also estimates that small businesses-defined as those with 100 or fewer employees-spent $3.5 billion on cloud technologies in 2011, or about 7 percent of the $53 billion the small business segment spent overall on I.T. expenditures.

That enthusiasm for remotely hosted services and low-cost infrastructure is shared by the health care industry, but not necessarily in the same way, or to the same degree, as industries such as construction or retail.

KLAS Enterprises, a Utah-based health care I.T. research firm, polled nearly 100 provider organizations for a 2011 "perception" study of cloud computing. Right off the bat, Erik Westerlind, the report author, had to sift through how respondents-of which nearly 70 percent were C-level executives-defined cloud computing.

"We ran into a lot of cases where executives would tell us that yes, they use the cloud because they're having their electronic health record remotely hosted by Cerner, for example," he says. "But those types of services are not really how "The Cloud" is typically defined outside this market-yes, they're remotely hosted, but the applications are running via direct connections to Cerner's data center, and all their information is housed in one place, Kansas City."

Some of the confusion about how to define cloud services is due to the "cloud washing" going on-rebranding application service provider or application hosting services as "cloud" solutions.

"True" cloud service is virtualized, elastic, scalable, metered out and resides on pooled or shared resources on the Web. Respondents mentioned every one of these attributes, but only a few mentioned them all, according to the KLAS report.

The health care execs most commonly used two attributes-an application was remotely hosted, and it was available via the Web-to define the cloud.

The bottom line is that interest in the cloud is strong in health care, but neither KLAS nor other industry experts expect a stampede of providers to a public cloud environment where their data is stored and accessible via the public Web.

Not surprisingly, data security and privacy, and lack of control, are the top concerns of health care execs. And while health care is-has to be-downright obsessive about security and privacy, those concerns are not exclusive to the industry. The IDC report and other cloud research finds the top drawback for adopting cloud services is data security.

One hospital CIO summed it up pretty neatly-he noted that he has to go before his board of directors every year and attest to them that the hospital is compliant with HIPAA regulations, one requirement being that he certifies that he knows where its data resides," Westerlind says. "In a public cloud that data could be anywhere in the world. That pretty much sums up why many are taking a cautious approach to public cloud services."

Greg Gillespie’s feature story in the February issue of Health Data Management digs into the status of cloud computing in health care and what make it different from other hosting methods.

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