Healthcare Cloud Spending Slated For Major Growth

Hospitals may still be ambivalent about using the cloud for clinical data transport, but attitudes are likely to undergo a major change over the next few years, according to research firm MarketsandMarkets. The firm projects that the healthcare cloud market will expand by about 20.5 percent per year over the next five years, hitting $5.4 billion by 2017.

Right now, healthcare cloud spending has hit roughly $1.8 billion, which represents penetration of four percent, MarketsandMarkets found.  That’s just a drop in the bucket, particularly given the big competitors who are aiming their guns at the healthcare cloud market today. (Other estimates put healthcare cloud penetration at 16.5 percent of the marketplace, still a small number though meaningfully larger than MarketsandMarkets’ number.)

As our sister site previously noted, Verizon’s Enterprise Solutions division is offering five “healthcare-enabled” services, including colocation, managed hosting, enterprise cloud, an “enterprise cloud express edition” and enterprise cloud private edition. Verizon hopes to capture healthcare IT managers who are worried not only about HIPAA-secure clinical data transport, but also HIPAA-appropriate data protection on site, as it’s training hosting workers to be HIPAA-ready.

Another set of deep pocketed healthcare cloud vendors are AT&T and IBM, who are partnering to capture what they deem to be a $14 billion healthcare cloud market.  Under the terms of an agreement announced in early October, IBM will provide data storage facilities and services, while AT&T will provide the network.

What could possibly hold back the advance of such giants?  Well, a number of issues, MarketsandMarkets notes. While vendors large and small may promise to be compliant with healthcare regs, healthcare data is challenging to manage, given that it requires special security, confidentiality, availability to authorized users, traceability of access, reversibility of data and long-term preservation.

My guess is that hospitals will respond to the efforts of vendors to attract cloud business, but that the market for public cloud services in particular won’t shoot upward as MarketsandMarkets predicts, as there’s just too many things that worry CIOs.  How about you, readers?

About the author

Anne Zieger

Anne Zieger

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.