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Healthcare IT Budgets Restrict On-Premise Server Deployments

Budget restrictions may encourage healthcare organizations to move PHI to the cloud rather than expand on-premise server deployments.

By Elizabeth O'Dowd

- Deciding on a cloud or on-premise solution is a challenge for any healthcare organization, especially when it comes to EHR solutions and data storage. Many factors such as security, control, connectivity, scalability, and cost determine which technology will best serve an organization based on its unique needs.

On-premise servers in healthcare

The correct solution needs to be chosen based on the technological needs of an organization, but cost can sometimes play a larger part in the selection process, ruling on-premise deployments out in favor of cloud.

As enterprise infrastructure generally moves toward a cloud-dominated IT infrastructure, IT decision-makers in the healthcare industry may still have reservations when considering deploying full cloud-based solutions.

One particular reservation with healthcare cloud computing is the decrease in control over data. With on-premise deployments, healthcare organizations have direct control over data and applications accessed by users. Depending on the service model, organizations may give up a level of control to a vendor.

Software-as-a-Service solutions give organizations control on how the application is used, but the bulk of back-end control lies with the vendor. HIPAA rules and regulations may influence IT Decision-makers to select a private or on-premise solution to ensure they have full visibility of their data.

READ MORE: Understanding Healthcare Private Cloud vs Hosted Private Cloud

HITInfrastructure.com previously reported that cloud EHRs generally enjoy a good reputation for security among healthcare organizations with many believing that cloud technology may provide increased protection from data breaches.

EHRs may be tailored to the specific needs of healthcare organizations but complementary technologies, such as general data storage offerings, communication tools, or business intelligence products, might operate across several verticals, and may not have healthcare’s concerns at the forefront of their designs, making the cloud EHR selection process difficult.

Scalability is also a major concern for healthcare organizations as the IoT continues to grow and connected medical devices become vital to collecting valuable health data. These devices produce an increased amount of data the needs to be stored, calling for a storage solution that can grow with the volume of data.

When organizations begin to consider the future costs of scaling up, budget concerns come to the forefront of the decisionmaking process. This is where cloud technology typically has an edge over on-premise solutions. Cloud services act as utilities as far as payments are concerned, with organizations paying monthly or yearly fees based on what they are using. As organizations need more space, they scale up their cloud service requirements and increase payments accordingly.

Paying for cloud services tends to be easier on organizations because they do not have to front the cost of buying hardware and they don’t have to pay for expensive installation and deployment for physical servers. With the influx of data from connected medical devices, scaling up an on-premise data center is costly and often cannot be done as quickly as scaling up a cloud solution.

READ MORE: Identifying IaaS Improvements for Health IT Infrastructure

Budget restrictions can lean organizations in favor of cloud storage solutions, but IT departments may still want an on-premise server as part of a hybrid solution or may prefer to use physical servers for control or security reasons.

Vendors are beginning to recognize the need for on-premise solutions to have better cost options in order to compete with cloud solutions.

Logicalis US an IT solutions and managed services provider, has recently addressed this issue with their HPE Flexible Capacity solution. Logicalis US claims it’s both possible and practical for organizations committed to maintaining some on-premise workloads for the foreseeable future to apply a cloud-based payment structure to an on-premise data center infrastructure.

"While workloads are definitely moving to the cloud and the desire for that kind of consumption-based model is fueling the pace, the need for hybrid and on-premise infrastructure is still very real," says Brett Anderson, Senior Director, HPE Solutions, Logicalis US. "As a result, CIOs whose workloads are better suited to hybrid or on-premise environments may want to re-examine how they are managing their on-premise resources with the expectation that they can achieve the same kind of financial and capacity flexibility that a public cloud has to offer."

HPE’s Flexible Capacity prevents organizations from over provisioning upfront to meet future demands by allowing organizations to architect a solution that meets current baseline requirements plus a defined degree of anticipated growth, but not pay for that growth until it's used.

READ MORE: Overcoming Healthcare Hybrid Cloud Storage Challenges

On-premise solutions still have a place in the healthcare industry, and with modified payment programs, organizations will have the option to keep on-premise deployments without heavily straining their budget.

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