When organizations make the decision to migrate their IT to the public cloud there are several key decisions they must consider. Which public cloud service provider (CSP) to use? Multi-cloud or hybrid-cloud? Work with a cloud partner or build out the function internally?
At first glance, building a cloud department with depth and breadth of expertise internally might appear to be the more cost-conscious way to go. Do it yourself, do a little more work, and save money, right?
There are several problems with this assumption.
One, there are multiple soft costs involved in DIYing your cloud that organizations usually don’t account for. Things like recruiting costs, employee benefits, and the cost of upskilling and maintaining talent are all cost centers that often go unaccounted for in the initial planning phase, which can create unexpected budgeting issues down the line.
Second, the value you can get from the cloud is greatly dependent on how well the cloud is architected, managed, and used. Without an experienced cloud team, you risk managing the cloud the wrong way, which can have negative implications for security, reliability, and costs, often resulting in a failed cloud investment.
Working with a managed cloud services provider for healthcare can help you overcome these challenges and streamline your path to success.
What are Managed Cloud Services for Healthcare?
Managed cloud services for healthcare are a solution for outsourcing the management and maintenance of a healthcare company's cloud infrastructure, systems, and support to a third party. These providers, known as managed services providers (MSPs), are responsible for managing, maintaining, and monitoring a company's IT systems on their behalf.
MSPs that offer managed cloud services for healthcare will typically provide solutions for healthcare-specific compliance regulations, like the Health Information Portability and Accountability Act (HIPAA), as well as support the innovation of healthcare products through deep knowledge of healthcare-specific cloud services.
Why Managed Cloud Services for Healthcare?
Managed cloud services can make it easier for healthcare organizations to improve their existing systems and adopt the latest technologies, while reducing the disruption and burden on internal teams.
Here are some reasons to consider managed cloud services for healthcare.
1. There’s a cloud skills gap.
A recent survey found that 78% of IT leaders experience a skills gap for implementing and managing cloud. And according to one Robert Half Recruiter, cloud computing remains the number one most sought after skill on the market.
Because of this, healthcare organizations, especially nonprofits and technology startups, are struggling to adequately staff their cloud management initiatives, as this highly sought-after talent is continually scooped up by tech conglomerates and cloud service providers that can offer them more competitive benefits and salary arrangements.
Without the right resources to manage cloud environments, organizations are finding it difficult to manage cloud costs, as cloud cost optimization practices require expertise and continual management to keep up with. Without the right cost optimization practices, unnecessary costs can quickly spiral out of control and put strain on organizations.
Costs aren’t the only concern when it comes to gaps in staffing for your healthcare cloud. Without the right staff to manage cloud, you might end up architecting your cloud in a suboptimal way or using the wrong services which can lead to issues with performance, scalability, and reliability.
2. Security mistakes can be costly.
Healthcare organizations alone accounted for 79% of recorded breaches in 2020. Consider this fact alongside the fact that there were 755,000 open cyber security jobs in the close of 2022. In addition, 47% of IT leaders report it takes three to six months to fill a cybersecurity position with a qualified candidate.
Without the right cybersecurity talent for managing healthcare data in the cloud, sensitive data is at risk.
Healthcare data breaches are devastating, with the average cost of a data breach worth $10.1 million dollars in 2022, up 40% from the year before. When deciding to work with a managed cloud services provider or to hire internal cloud security specialists, consider the talent gap and the costs associated with poor security.
3. Cloud tools require expertise to manage.
Cloud service providers offer native cloud management tools for their own clouds, and there are also thousands of third-party tools available on the market.
Consider Prisma Cloud by Palo Alto Networks, a popular cloud security tool with numerous API integrations. According to Palo Alto Networks, it can take upwards of a year to learn, deploy, configure, and manage Prisma Cloud before it is fully operational and providing value. (See Figure 8).
Without an expert Prisma Cloud administrator to manage the tool, companies often end up failing to fully operationalize the product. If there are thousands of alerts without anyone to manage these alerts efficiently, security risks can accumulate.
Figure 8 (Source: Palo Alto Networks)
4. Cloud management is undifferentiated.
Cloud management is an undifferentiated activity, meaning that it is required for application development, but it won’t increase the appeal of the application to potential customers. It’s essentially a utility that just needs to run! Whereas differentiated activities, like coding a new feature set or providing healthcare, are what provides market differentiation for your company.
Compare cloud management with something like electricity. Would you rather set up your own internal electrical plant and hire electrical experts to manage it, or just plug in to the system and pay for what you use?
When you work with a managed cloud service provider for healthcare, IT becomes more like a utility than a full-on department, which reduces complexity, overhead, and even frees up physical space.
5. Cloud ROI is incredibly variable.
The potential value cloud has to offer is real. One study found that cloud reduced IT operational costs by 31%, increased features delivered per year by 3x, and produced a 69% reduction in unplanned downtime.
Still, many companies claim to not have realized ROI from their cloud investments.
That’s because the value cloud delivers is greatly dependent on how well the cloud is architected, managed, and optimized. Without the right cloud management practices, it’s not uncommon to see a higher-than-expected IT bill alongside a failure to operationalize increased reliability and performance potential.
The right managed cloud service provider can help you put cloud capabilities to work so you can drive the maximum value from your cloud investment, instead of leaving money on the table. A healthcare cloud MSP will understand how to operationalize cloud advantages and help you manage your cloud so you can get the most ROI.
6. There are hidden costs associated with people management.
If you’re going to take cloud management in house you know you’re going to have to hire a team. But salaries aren’t the only expense when it comes to people management. Other soft costs, which are difficult to quantify but add to your overall expenses, include:
Competitive benefits: Payroll taxes, insurance, payroll management, 401k matching, and employee devices all must be taken into consideration.
Recruiting costs and cycles: Since cloud engineers with a healthcare focus are difficult to find, a third-party recruitment firm will likely need to be engaged. While industry average rates range from 15-30% of the first-year salary, Cloud engineers typically run in the 20-27% fee range.
Ramp time: Although typical ramp time is 3 to 6 months is typical for a new role, some engineering positions require as many as 11 to 12 months to ramp into a position fully.
Employee churn: The average software engineer has a tenure of around three years at a given organization. One study showed that in 2022 the average turnover rate in IT was 10.9%, and in healthcare was even higher at 13.07%. For startups, these rates are even higher.
Onboarding: The average onboarding cost for a new employee is around $4,700, but this does not account for soft costs. Interviews, screenings, decision-making meetings, and the impact on productivity due to the disruption are all soft costs that are incurred.
7. Time equals money.
Building your own cloud management internally may sound like the cheaper solution at first glance, but don’t forget that time equals money. The time that it takes you to hire the right team, purchase and deploy the right stack, and then get that environment operationally sound and resilient is time you could spend, instead, on differentiated activities like developing new features, creating strategic business plans, entering new markets, and acquiring new customers.
What are the Benefits of Managed Cloud Services for Healthcare?
Managed cloud services for healthcare can provide a range of benefits, including:
Reduce the operational costs associated with IT management.
Reduce the soft costs associated with talent acquisition and retainment.
Reduce the risk of a security breach or compliance mistake.
Improve reliability, performance, and resilience.
Spend more time on differentiated activities that drive business value.
Ensure that cloud investments deliver ROI.
How to Choose a Managed Cloud Service Provider for Healthcare
Working with a managed cloud service provider for healthcare can put your business ahead, but not all providers are equal in terms of quality and breadth of services. Some MSPs claim to support the healthcare industry, but they’re really generalists posing as specialists.
When choosing an MSP for your healthcare cloud, consider:
HITRUST Certification status
Cloud competencies and credentials
Customer service and service level agreements
Security and compliance frameworks offered
Here are 10 things to look for in a managed cloud provider for healthcare.
Consider Cloudticity Your Healthcare Cloud Managed Service Provider
Cloudticity helps healthcare organizations realize the full potential of their cloud investments through our HITRUST Certified managed cloud services for healthcare. As an extension of your own team, we'll provide expertise and support as well as strategic planning to help you achieve business and clinical goals.
If you want to learn more about how we can work together, schedule a free consultation today.