Cloud is Not the Ultimate Objective — Hospitals Will Only Adopt if it Makes Sense

10 May

Cloud is Not the Ultimate Objective — Hospitals Will Only Adopt if it Makes Sense

IDC Jonas Knudsen

 

 

 

 

Jonas Knudsen
Research Director, Health Insights
Read full bio  @JonasHKnudsen

I have had several conversations with hospital CIOs on cloud adoption in the past three months. I needed help in analyzing our IDC survey data on cloud in healthcare, as the data showed a very low adoption rate compared with the industry average. The question was, why is that?

I passed the questions to the end-user community, primarily hospital CIOs but also ICT vendors with a cloud offering. Basically, I needed background knowledge for my latest research — Cloud Adoption in European Healthcare Organizations (IDC #EMEA43770918, May 2018).

First, some background. According to IDC’s 2017 CloudView Global Survey (n = 8,188), 78% of companies are already using either public or private cloud, and usage is increasing. 62% of organizations expect that by 2019, more than half of their IT capabilities will be delivered through some form of cloud service — public, private, or hybrid. In healthcare, though, cloud adoption seems to be stagnating, with very low growth rates. According to IDC’s Vertical Market Survey 2017, healthcare providers in Nordic countries and Germany, with cloud adoption rates of 49.2% and 48% respectively, are leading in private cloud adoption in Western Europe. Although cloud solutions perfectly align with the industry’s need to be flexible, collaborative, data-driven, and patient-centered, healthcare organizations in Western Europe are still reluctant to move forward, only growing 5.4% between 2016 and 2017.

At the same time, at the Himss event in Las Vegas every ICT vendor was shouting about cloud. The preconference keynote from Eric Schmidt — technical advisor and former executive chairman of Alphabet Inc., Google’s parent company — touched on the theme when he addressed the importance of cloud computing in healthcare. According to Schmidt:

“This technology — everything I just described — is buildable today or in the next few years. All it takes is all of us, everyone in this room, to figure out how to build it. I’m going to give you a road map. I’m going to start with, get to the cloud, run to the cloud. Take an airplane, fly to the cloud.”

Schmidt highlighted that even a moderate choice of cloud enablement platform was far better than doing nothing. The problem, it seems, is that hospitals prefer to do nothing instead of small steps. Cloud is still mostly implemented in infrastructure, security, and databases, while it is almost absent as a delivery model of core clinical applications. In the last three major EHR procurements in the Nordics last year, for example, cloud requirements were absent in the Requests for proposal (RFP).

It is evident that there is a major backlog in cloud adoption when comparing healthcare to the industry average, but there is also a misalignment in what ICT vendors preach and pursue and what the market (hospitals) are demanding — at least in the core clinical application architecture.

Cloud adoption in healthcare in Europe follows certain patterns compared with the rest of the world, which I describe in my latest research. It is certain that ICT vendors and hospital CIOs need to realign their communication around value, pragmatism, cost models, skills, legacy software, and security in order to move forward into the cloud. For more information, see Cloud Adoption in European Healthcare Organizations at idc.com (requires subscription).

If you want to know more about Cloud Adoption in European Healthcare Organizations, please reach out to IDC Health Insights at insightseurope@idc.com or e-mail Jonas Knudsen

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