What You Should Know:
– Healthcare organizations are making significant investments in their IT infrastructure, with widespread adoption of public cloud solutions, according to a new KLAS report.
– These investments are crucial for maintaining operational efficiency and enabling cutting-edge innovations such as AI, genomics computing, and digital pathology. However, the report also highlights persistent challenges related to talent shortfalls, data security, and integration as organizations navigate their cloud migration journeys.
Current State of IT Infrastructure and Cloud Migration Priorities
The report, “Public Cloud Providers 2025” synthesizes responses from 36 healthcare organizations across various care settings, examining the current state of their IT infrastructure, their experiences with public cloud providers, and their future plans and priorities. KLAS report the majority of healthcare organizations (over 80%) currently have less than half of their IT infrastructure in the public cloud, with nearly 40% reporting that at least 90% remains on-premises. However, cloud migration is a high priority for many of these organizations, with
39% aiming to accelerate migration within the next 12-24 months. Large health systems are most likely to increase their use of public cloud within the next two years.
HDOs are primarily moving to the public cloud for disaster recovery/business continuity (67%), data archiving/long-term storage (64%), and data analytics/warehousing (53%). Cost reduction is the top expected benefit (74%), followed by improved operational efficiency (50%) and improved scalability (42%).
Key Challenges and Roadblocks to Cloud Migration
Despite the clear benefits, healthcare organizations face significant hurdles in their digital transformation:
- Talent Shortfalls: This is the top barrier to digital transformation for all HDOs, regardless of size. Smaller organizations, in particular, cite this as their number one challenge (41%), impacting their ability to find success through technology.
- Data Security and Privacy Concerns: These are universal concerns for 100% of HDOs.
- Cost and Budget Constraints: Identified as a top barrier by 63% of senior living executives.
- Technical Complexity: Interfaces, transmission, and data submission processes present significant technical challenges.
- Integration with Legacy Systems: Compatibility issues with existing infrastructure are a major impediment, particularly in senior living (74% of executives).
HDO Experiences with Leading Public Cloud Providers
The report details HDOs’ experiences with major public cloud providers:
- Microsoft Azure: Customers generally appreciate Azure’s strong customer service and collaborative approach, as well as its product functionality and reliability. They value the ease of deployment and the breadth of integrated features. However, some find the licensing model complex and desire faster performance from certain services.
- Amazon Web Services (AWS): HDOs using AWS commend its speed, scalability, and broad range of services that enable advanced capabilities like AI and analytics. They value AWS’s strong support and focus on healthcare-specific needs. Challenges sometimes include cost management and the complexity of optimizing all available services.
- Google Cloud: Clients typically praise Google Cloud’s innovation, advanced AI capabilities, and data analytics tools. They appreciate its user-friendly interfaces and its potential for transforming data into actionable insights. Concerns may revolve around ensuring compliance in highly regulated environments and initial integration efforts.
Future Plans and Strategic Priorities
Healthcare organizations are prioritizing IT investments to align with strategic goals:
- AI/Automation: 39% of HDOs are increasing IT spend in AI/automation, making it the top area for investment.
- Cybersecurity: 31% are increasing spend on cybersecurity, reflecting ongoing concerns about data breaches.
- Infrastructure: 27% are increasing hardware/software costs, while 8% are focusing on foundational infrastructure.
- Talent Development: 93% of HDOs are addressing GenAI’s impact on employee roles and responsibilities, and 75% acknowledge a lack of necessary skills to work with GenAI effectively.
For more information about this report, visit https://klasresearch.com/report/public-cloud-providers-2025-the-cloud-s-growing-role-in-organizations-it-infrastructure-strategies/3487
