Healthcare IT vendors are making rapid progress using or migrating legacy technologies to the cloud, but they mention cost most frequently as a challenge, citing storage-retrieval and egress fees, according to the new Public Cloud Providers 2022 report from the KLAS Arch Collaborative.

Where are the vendors on their journey to cloud maturity?

Nearly half of HIT vendors interviewed for the research indicated their go-forward products are commercially available in the cloud.

KLAS created a new evaluation for HIT software vendors as clients of public cloud providers for the study, asking about their experiences and cloud maturity journeys and why they selected their cloud providers.

Of those, about three-quarters have products running in a multi-tenant SaaS environment, with the rest running their products in a single-tenant SaaS environment or offering platform-based technologies that allow providers and payers to use their cloud providers of choice.

About one-third of those vendors interviewed for the report say they use multiple cloud providers.

"Reasons for this include the desire to accommodate payer/provider clients’ cloud preferences, the acquisition of products hosted by a different cloud provider and functionality gaps," the KLAS researchers said.

They also learned that vendors that previously had legacy solutions have either replaced or refactored their products, and are still transitioning clients to the cloud.

By market segment, telehealth vendors offer the most mature cloud solutions, followed by population health vendors, then data/analytics vendors, according to the research.

AWS is the leading cloud provider for HIT vendors

On the cloud provider side, more than 95% of the vendors say that they considered AWS and 80% use it as a primary or secondary platform. While predicting and managing costs can still be challenging, AWS leads the market in cost and value, say the KLAS researchers.

"Vendors say AWS proactively works with them to reduce costs as much as possible. ... Integration with other AWS clients is easy thanks to AWS’ flexibility and simple configurations." 

But HIT vendors said that AWS needs to improve upon its healthcare expertise, with several respondents indicating that the cloud vendor seems more focused on technology than healthcare, the researchers added.

The most common reasons HIT vendors surveyed selected AWS were maturity (33%), technology capabilities (33%) and prior experience (25%).

The biggest obstacles cited in the research were support gaps (35%) and understanding and managing costs (35%).

"A few vendors express excitement around recent AWS investments in the healthcare market and hope AWS’ focus will shift more toward healthcare," according to the report. 

Microsoft Azure gains momentum

Healthcare technology vendors who use Microsoft Azure as their primary cloud provider are twice as likely as those on AWS to use a secondary cloud provider, said KLAS researchers. However, more than 80% of respondents considered Microsoft Azure, and more than half use it as a primary or secondary cloud provider. 

They cite established relationships with Microsoft, software bundling and favorable pricing as key factors in their cloud platform choices.

Microsoft Azure also leads among cloud providers for ease of integration and healthcare expertise, according to the report.

"Vendors appreciate the broad offering and strong integration tools and documentation. Microsoft’s solid expertise is supported by industry-experienced staff, deep relationships with health systems and significant investment in healthcare," KLAS researchers said.

Room for improvement remains – despite software bundling and volume discounts. 

"Some clients report costs can be difficult to predict and manage," they added.

The most common reasons for HIT vendors selecting Azure were Microsoft familiarity (61%) technology capabilities (22%) and breadth of offering (17%).

The biggest obstacles they cited were support gaps (47%) and understanding and managing cost (27%).

Supplementing with Google Cloud

About half of those HIT vendors KLAS researchers interviewed also looked at the Google Cloud Platform, which one vendor uses as its primary provider. 

For most vendors, GCP is primarily used as a secondary cloud provider to fill functionality gaps or enhance capabilities, but some HIT vendors interviewed shared that they are encouraged by Google Cloud's recent healthcare investments.

"Vendors appreciate GCP’s competitive pricing and white-glove approach with new customers. The main complaints include not enough flexibility with non-Google tools, high costs for nonproduction environments and a more technical focus," researchers said.

Andrea Fox is senior editor of Healthcare IT News.
Email: afox@himss.org
Healthcare IT News is a HIMSS publication.