Healthcare Cloud Spending To Ramp Up Over Next Few Years

Posted on October 4, 2013 I Written By

Anne Zieger is a healthcare journalist who has written about the industry for 30 years. Her work has appeared in all of the leading healthcare industry publications, and she's served as editor in chief of several healthcare B2B sites.

For years, healthcare IT executives have wrestled with the idea of deploying cloud services, concerned that the cloud would not offer enough security for their data. However, a new study suggests that this trend is shifting direction.

A new study by market research firm MarketsandMarkets has concluded that the healthcare industry will invest $5.4 billion in cloud computing by 2017.  This year should see a particularly big change, with total healthcare cloud investment moving from 4 percent to 20.5 percent of the industry, according to an article in the Cloud Times.

The current US cloud market for healthcare is dominated by SaaS vendors such as CareCloud, Carestream Health and Merge Healthcare, according to MarketsandMarkets. These vendors are tapping into an overall cloud computing market which should grow at a combined annual growth rate of 20.5 percent between 2012 and 2017, the researchers say.

As the report notes, there are good reasons why healthcare IT leaders are taking a closer look at cloud computing. For example, the cloud offers easy access to high-performance computing and high-volume storage, access which would be very costly to duplicate with on-premise computing.

On the other hand, the MarketsandMarkets researchers admit, healthcare still has particularly stringent data security requirements, and a need for strict confidentiality, access control and long-term data storage. Cloud vendors will need to offer services and products which meet these unique needs, and just as importantly, change and adapt as regulatory requirements shift. And they’ll have to have an impeccable reputation.

That last item — the cloud vendor’s reputation — will play a major role in the coming shift to cloud-based deployments. If giants like AT&T, IBM and Verizon stay in the healthcare cloud business, which seems likely to me, then healthcare institutions will be able to admit that they’re engaged in cloud deployments without suffering a public black eye over potential security problems.

On the other hand, if the giants were to get cold feet, cloud adoption would probably slow substantially, and remain at the trickle it has been for several years. While vendors like Merge and Carestream may be doing well, I’d argue that the presence of the 2,000-pound gorilla vendors ultimately dictates whether a market thrives.