What You Should Know:
- The benefits of public cloud are promising, as many Amazon Web Services (AWS) and Microsoft customers (both provider organizations and vendors) have noted in previous KLAS research. The first health systems using a public hyperscale cloud provider (e.g., AWS, Google Cloud Platform, Microsoft Azure) to support their EHR environment in the cloud have begun to go live, and interest in this approach is gaining momentum, particularly among Epic organizations. Most who are pursuing this path are just beginning their journey, but some are actively selecting their public cloud provider and planning next steps.
- KLAS recently interviewed 10 organizations who are considering moving part or all of their Epic environment to the cloud. This report shares which public cloud providers they are considering, what Epic environments they may move to the cloud, what goals and concerns they have, and what role third-party firms will play in the transition.
Which Public Cloud Providers Are Early Movers Considering?
This report is the result of a perception study where healthcare organizations shared their decision-making process around moving their Epic environments to the cloud. To gather these perspectives, KLAS used a supplemental evaluation to interview 10 healthcare organizations that are actively considering moving part or all of their Epic environment to the cloud. Data was collected between September 2022 and January 2023.
Key insights and trends are as follows:
- Microsoft Azure Often a Front-Runner Due to Respondents Already Leveraging Azure or Microsoft Tools in Other Areas: Microsoft Azure is frequently considered in this sample. The bulk of respondents considering Microsoft Azure for their public cloud provider are currently leveraging Azure in other areas; they have Azure workloads set up or utilize Microsoft Office 365. Thus, they want to take advantage of the existing relationship, infrastructure, and expertise (Epic publishes architectural guidance for Microsoft Azure) to move their Epic environment to the cloud. Additionally, some believe the existing relationship will accelerate the contracting process and help them effectively negotiate their contract to manage costs. Scalability is frequently brought up as a concern and is preventing some from seriously considering Microsoft Azure; respondents believe the cloud provider doesn’t support larger organizations as well as AWS does. To address this concern, respondents would like Microsoft to show more evidence of supporting customers their size and to provide professional services that facilitate customer success.
- AWS’ Epic Expertise and Strong Bench of Technical Resources Drive Considerations: Because AWS introduced broad cloud capabilities to the market relatively early, they are frequently considered in this sample and perceived as being ahead of Microsoft Azure in developing the capabilities healthcare organizations need. Reasons for consideration include existing proof points with other Epic customers, technical expertise (Epic publishes architectural guidance for AWS), and a strong bench of resources that can provide professional services, support onboarding, and help develop organizations’ long-term cloud strategies beyond moving their EHR to the cloud. Among those who likely won’t select AWS, one feels AWS has an immature healthcare focus and hasn’t yet built up clinical subject matter expertise, while another feels the overall cost—when factoring in AWS’ partner costs—is much higher than other similarly structured options. Further, because many respondents already use Microsoft products—including Microsoft Azure—at their organizations, some are contemplating moving forward with Azure to consolidate contracts and vendor relationships.
- Most Respondents Want to Quickly Leverage Disaster Recovery Capabilities while Moving Their Production Environment to the Cloud over Next Year or Two: Several interviewed organizations feel a sense of urgency to begin transitioning to the cloud, though their reasons for doing so vary. Some want to avoid making significant capital investments in hardware, improve data security, and find alternatives to current hosting options that can’t meet their needs. Most respondents want to use the cloud for disaster recovery within the first three months of contracting with their public cloud provider; this would give them ample opportunity to test the migration process and safeguard against the need to resort
to paper during an outage. Moving to a full production environment is then expected to take one or two years. Beyond moving the EHR to the cloud, almost all respondents plan to take advantage of having Cogito data in their cloud environment. They also anticipate moving other applications (both Epic and non-Epic) to the cloud. Respondents who anticipate taking the longest to move to the cloud say that finding skilled resources, developing a deep understanding of cloud architecture, and consolidating their health system onto one EHR are constraints that will likely slow them down.
- For Most Respondents, Capital Cost Reduction Is the Primary Goal of Moving to the Cloud; However, Uncertainty around Costs Are the Primary Concern: Respondents’ number-one goal in moving their Epic environment to the cloud is to cut capital costs by eliminating hardware investments. Further, public cloud providers’ flexible contracting (which allows organizations to pay for only the cloud services they use) is anticipated to help reduce spending; those considering AWS mention this benefit more frequently than organizations considering other public cloud providers. Other frequently mentioned goals include improved system reliability and uptime and fewer FTEs providing on-premises support. Though capital cost reduction is the main driver for moving to the cloud, cost uncertainty is the top concern. There are many variables that make the true cost of cloud hosting difficult to nail down, and respondents worry their costs could increase in the long run if their cloud environment isn’t architected properly, if utilization isn’t effectively monitored, or if their cloud provider increases the price when the contract renews. Additionally, several respondents (particularly those at larger organizations) are concerned about scalability, as public hyperscale cloud providers are still relatively new to hosting Epic in a production environment. Respondents are also concerned their staff doesn’t have the needed skills to support a move to the cloud.
- Most Respondents Anticipate Using Third-Party Firms to Support Their Cloud Migration; Management Consulting Firms Are Top of Mind: Although respondents plan to leverage public cloud providers’ professional services to move to the cloud, some feel the cloud providers may not have a sufficiently deep bench of resources to meet their needs. Also, the organizations lack the staff and skills to effectively manage the transition themselves—70% feel only somewhat prepared to move to the cloud. As a result, most respondents are considering using a third-party firm to support their cloud migration. They hope these firms will be able to supplement public cloud providers’ engineering resources, assist with training their internal resources, and provide effective processes and road maps during the transition. In addition to using third-party firms, some respondents are currently leveraging firms to help build their cloud business cases and assess their organization’s readiness. Of those who anticipate using a third-party firm in the future, half are unsure which firm they will use. The other half plans to partner with traditional management consulting firms, specifically Accenture, Deloitte, EY, Hewlett Packard Enterprise, and PwC.