Health IT Look Out: The Cloud and Outsourcing Coming

By - Source: Toms IT Pro
Jame Alan Miller

James Alan Miller is Managing Editor of Tom's IT Pro. He is a veteran technology journalist with over seventeen years of experience creating and developing magazine and online content. Founding editor of numerous business and enterprise computing sites at the internet.com network, James headed up the After Hours section at PC Magazine, as well as hardware and software sections of various Windows publications.

A recent report by In-Stat caught my eye. According to the market research company, the healthcare industry (e.g. ambulatory healthcare services, hospitals, nursing and residential care facilities and social assistance) will spend $518 million on Infrastructure as a Service (IaaS) by the middle of this decade.

Sure, that's a drop in the bucket compared to overall IT spending in healthcare today. Of the $16 billion spent on telecommunications in the healthcare and social services sectors last year, wireless accounted for 40%, the largest chunk writes In-Stat. However, the fastest growing telcom component in healthcare was Cloud Computing and managed services, which includes the outsourcing of hardware such as storage networking equipment, etc. to IaaS vendors.

For its part, spending on public (as opposed to private) Cloud Computing in healthcare alone will grow to $1 billion by 2013. Wireline data and wireline voice encompassed the remainder of telecom spending in healthcare last year.

Since this trend isn't about to change anytime soon, it is one IT professionals must keep a close eye on. It will strongly impact how they go about their business in a hospital or other healthcare setting and how their careers develop over time.

In fact, the type of work they perform today may differ significantly from what they are doing a few years from now. So, rather than managing hardware located onsite, their roles could morph into that of auditors who keep a close eye on the services their institution outsources, including to IaaS companies, making sure those vendors are doing the job they've been contracted to do.

As In-Stat analyst Greg Potter said in statement, “Demand for Cloud Computing services in particular has exploded and we see nothing that would indicate that the trend won’t continue at least through 2015.”

In our opinion, Cloud Computing—along with related  (and sometimes overlapping) IaaS, Software as as Service (SaaS) and Platform as a Service (PaaS) outsourcing technologies—is a disruptive change that will impact IT pros well beyond that. Whether that change is a good thing or a bad thing will have to be seen.

Not Just Healthcare

An earlier In-Stat report said the overall IaaS market will grow to about $4 billion by 2015. Meanwhile, the delivery of related SaaS technologies will increase by 142 percent over the same period.

“Many SaaS applications have been around for a long time, but only now since the advent of entire platforms for applications, such as Google Apps and Force.com, are these applications gaining the necessary visibility among businesses to gain traction in the software market,” explained Potter.

IaaS, for its part, is especially gaining traction in the small business market, both in and out of the healthcare sector. In-Stat defines a small business as having between 5 and 99 employees.

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