The public cloud market, led by Google, Amazon, and Microsoft, is hitting a new period of meteoric growth. Public cloud revenue is expected to exceed $200B in 2019, up over 15% from 2018. Not only do most enterprises use one of the Big Three for cloud infrastructure, but even the most regulated businesses, such as healthcare and financial services, are increasingly turning to public clouds. In fact, over the next five years, over 90% of organizations are expected to have purchased public cloud infrastructure, and with demand for integrated Infrastructure-as-a-Service (SaaS) and Platform-as-a-Service (PaaS) growing, the market shows no signs of slowing down.
NewtonX recently conducted a survey with healthcare IT decision-makers who are investing in cloud infrastructure, to gain data and insights into the technology’s impact and adoption in this highly regulated industry. The results of the survey informed the data and analysis in this article.
A New Era For Healthcare Data, and the Clouds Entrusted With It
Just a few years ago, the idea of trusting a third-party cloud provider with patient data would have been ludicrous. The risks inherent to using third-party infrastructure to store some of the most sensitive data in existence, as well as to support mission-critical applications, were too steep for many providers to get on board with the benefits of public clouds. Today, however, as data proliferates and managing this data becomes increasingly complex, many healthcare providers are adopting hybrid solutions (a mix of on-premise data storage and third-party). Ultimately, the promise of lowering infrastructure costs, increasing flexibility to move applications and associated data, and accelerating software development has rendered public cloud infrastructure a business necessity for many healthcare providers.
There are three primary needs that are driving growth in the healthcare cloud sector:
- Need to lower IT infra costs
- Cross-provider medical collaborations
- IoT in hospitals and edge computing
The data that healthcare providers produce has increased exponentially over the past decade. Maintaining, updating, and protecting on-site data storage has become cumbersome as a result, even as healthcare providers experienced increased needs for flexibility to collaborate and develop new software (see our article on why sharing patient data is so crucial to AI development).
Part of the reason that data production has increased so much is due to adoption of IoT devices in hospitals and other healthcare settings (read our article on the subject here). For instance, STANLEY, a health IoT solutions brand, has equipped 1,600 hospitals worldwide with infant tagging systems to prevent infant abduction and mother-baby mismatches. Many hospitals have also employed IoT for machine monitoring, fall management, and inventory management. Pharma companies have also begun using “smart pills” to help monitor medication adherence, monitor health issues, and protect health organizations from risks. Some vendors also provide edge-computing based software to monitor epileptic patients.
The increase in data also increased costs for on-site data storage management. Over 50% of respondents to the NewtonX survey reported being over budget for IT infrastructure spend prior to moving to a hybrid cloud solution. To boot, where once having on-site storage was objectively more secure than storing data on a public cloud, emerging security solutions, such as table-based encryption and the ability to separate patient-identifying information from other clinical information, made security issues less black and white.
How Cloud Storage Providers Are Meeting Healthcare Industry Needs
The big three cloud providers — Amazon, Google, and Microsoft — all have cloud products (and a suite of related tools) directly targeting the healthcare industry. Azure API for FHIR aims to help health systems interoperate and share data in the cloud, while AWS targets genomics and pharma companies in addition to healthcare providers with its AWS Health platform. Meanwhile, Google’s Healthcare API targets organizations interested in leveraging machine learning and in rapidly accelerating the digital transformation of their care networks.
Over the next five years, more and more healthcare industry organizations will move from on-site data storage to public cloud or hybrid solutions. Indeed, 81% of respondents to the NewtonX survey stated that having robust data storage and processing is a competitive differentiator. While the healthcare industry is not solely responsible for the public cloud market’s growth, it is a major factor in the industry’s second boom.