Rhapsody Health Solutions Team

Smooth sailing to the cloud with a hybrid cloud approach  

How healthcare is righting the ship to adopt cloud 

For many years, there was only one option when it came to hosting data, software, and engines for all industries, including healthcare: on-premises. Healthcare organizations sailed along with their on-prem infrastructure, located onsite, secure under lock and key, and managed by a team with deep engineering expertise.  

Then the tides changed.  

New and innovative models offered the ability to rent space, equipment, and bandwidth, which you could either manage yourself (co-lo) or outsource (hosted). Until finally, the concept of the cloud was introduced—a new-wave idea where data and workflow tools could be hosted that didn’t take up any physical space, require expensive hardware, or necessitate robust in-house expertise. What’s more, the cloud could scale at the drop of a hat, giving organizations a place to store their data and software in an increasingly digital world.  

Many industries outside of healthcare jumped on board, innovating quickly, enabling new revenue streams, and reducing costs to levels that were previously unthinkable. However, these industries did not rip and replace on-prem stacks and go all-in on the cloud from day one. Most industry technology leaders smartly adopted a hybrid cloud approach where they continued to use their on-prem stack, at least temporarily, while they migrated workflows and systems to the cloud in a measured and calculated way. 

Seeing the cloud benefits other industries experienced, healthcare changed its tack, wading in slowly to adopt cloud offerings and embrace the cost, efficiency, and scalability benefits that cloud-based storage and computing solutions had to offer.  

Fast forward to today, and almost every healthcare organization leverages the cloud in some way. Like other industries, healthcare has not fully abandoned ship and eliminated their on-prem stacks, but rather is opting for a hybrid cloud strategy that aims to maximize the benefits of the cloud while continuing to rely on their on-prem infrastructure for some workflows and use cases.       

A hybrid cloud strategy is one that can really pay off.  If you do it right.  

At Rhapsody, we see firsthand how healthcare is becoming increasingly hybrid every day. Incumbent core technologies native to on-prem infrastructure are as important to healthcare as ever, while innovative new technologies and business models are heavily deployed on the cloud.  

For many of the organizations we work with, the challenge is building an understanding of what is best left landlocked on-premises and what is best moved to the cloud. This is compounded by the constantly evolving state of healthcare technology, as seen by the flood of investment pouring in.   

As you navigate your digital transformation journey, partners who can support and enable your hybrid cloud model are key for smooth sailing. With two decades of experience in healthcare interoperability, we’re here to deliver the information you need to make informed decisions about a hybrid cloud model.  

What’s propelling healthcare’s cloud adoption?  

No matter where you are on your voyage to the cloud, it’s hard to miss the fleets of healthcare organizations that have adopted cloud services over the past decade. In fact, in the Gartner® 2020 Cloud End-User Buying Behavior study, 75 percent of healthcare provider participants said they plan to increase their spending on cloud in the next 12 months. Let’s take a deep dive into the industry trends driving this migration.  

Demand for IoMT and connected devices.  

Healthcare organizations are increasingly leveraging cloud computing to handle the seemingly endless number of connected devices known as Internet of Medical Things (IoMT). With cloud computing power, you can automate at-home and remote applications.  

For example, a patient’s wearable device, phone, pharmacy records, and medical records can all seamlessly feed into a system that combines the data and runs analytics to identify population trends, optimize care recommendations, or improve a patient’s experience. This could ultimately eliminate the need for physical records and make healthcare organizations more efficient so they can focus more on patients and less on files.  

Innovative technologies exclusively available via the cloud.  

Healthcare information technology (HCIT) vendors are increasingly limiting their deployment options to the cloud because of the advantages around cost, deployment, and scalability. With oceans of HCIT innovations, healthcare organizations face pressure to adopt cloud infrastructure so they can access these new applications and software.  

HCIT vendors offering omni-cloud solutions.  

HCIT vendors are starting to offer their solutions on all cloud platforms to better serve the entire healthcare market. This trend will eliminate the need for healthcare to use multi-cloud solutions and enable healthcare to stick with a single offering as HCIT vendors retrofit solutions to work on any cloud infrastructure.  

Difficulties staffing on-prem infrastructure.  

Healthcare is not immune to staffing challenges, which is especially true for local IT staff. While these challenges may not impact organizations in major cities as much as rural sites, adoption of the cloud enables IT departments to staff teams through a combination of on-site and remote staff.   

Consolidation in the healthcare segment. 

It’s increasingly common for healthcare organizations to consolidate to take advantage of synergies, economies of scale, and geographic market share. This merger and acquisition activity has resulted in a common situation where each organization uses a different legacy cloud vendor. The question becomes whether to use both cloud vendors and adopt a multi-cloud architecture, at the expense of maintaining duplicative IT teams, or consolidate into one host.  

An ocean of infrastructure considerations  

On-prem pros: Control, speed.  

On-prem is the status quo.  

It means you own and operate your data center on your premises. At times it can feel like a large, expensive ocean liner that’s slow to steer in new directions, but it’s also comfortable and perfectly broken in. 


Healthcare organizations that stand up and operate an on-prem hosting solution can fully customize their infrastructure to meet their organization’s specific needs. This includes storage space, computing power, physical and cybersecurity protocols, regulatory configurations, and access, among other things.  


For real-time use cases that are dependent on a particular order of operations, hosting tools on-prem is the best way to go as network latency is a key issue. These scenarios are increasingly rare, but it does, in fact, take more time for a request to go from the hospital or clinic to a cloud-hosted database and then come back to the site of the request than it would for a similar request to travel back and forth from an on-prem hosted solution.  

And this makes sense—it takes more time to cover long distances than short ones—even in a fiber-enabled world. An example of a device best suited for on-prem would be any type of surgery involving robotics requiring the user to make adjustments and decisions quickly. The timing may only be a couple of seconds, but with some decisions, this could make all the difference.  

On-prem cons: Cost, compliance, scale  

Capex costs.  

The initial cost (capital expenditures) of setting up on-prem infrastructure is high. After shelling out for real estate, hardware, and infrastructure engineers, the cost to set up on-prem infrastructure is not something to take lightly. This is also true of any expansion of your on-prem stack.  

Though you can write off some of the initial capital costs as well as continual improvement as depreciation expenses, this amount is negligible compared to the initial cost of on-prem infrastructure setup (especially compared to cloud alternatives).  

Alternatively, if you’re in a use-it-or-lose-it budget situation, investing in on-prem infrastructure is one place to deploy capital, but whether it is the best place is an open question, as investment in cloud is likely more aligned to your organization’s future infrastructure strategy. 

Opex costs.  

There are considerable costs around keeping your on-prem infrastructure up and running, known as operating expenditures. Recurring fees for electricity, cooling, maintenance, continual software upgrades, and the necessary IT staff to manage the infrastructure can add up quickly. This being said, when it comes to income taxes, organizations typically prefer opex as this will impact your organization’s bottom line (net income) and result in lower taxes.  

Regulatory and compliance. 

With an on-prem solution, the owner bears the entire responsibility and cost of maintaining compliance with regulations such as HIPAA and General Data Protection Regulation (GDPR). This not only includes the configurations and maintenance of the on-premises infrastructure, but also the robust (and evolving) regulatory standards that require expertise.  


When building on-prem infrastructure, the space and capabilities of that data center are finite and may prove difficult to scale as needs arise in the future. This is especially true in situations where you require unexpected spikes in computing power (even if only for a short period of time). This scaling limitation can also be a hindrance when implementing business continuity, disaster recovery, and back-up plans.   

Scenarios where on-prem is the best option   

Critical workflows.  

Tools or applications related to critical care workflows and use cases are likely best kept on-prem as down time, latency, and unreliability pose a large risk. This would include life-saving devices that must always be running (e.g., generators and respirators).  

Self-managed workflows.  

Workflows that use systems and technologies managed by your IT team (as opposed to being outsourced to a fully managed service vendor) may be best hosted on-prem, as your IT team managing the platform will have an easier time maintaining those solutions than a third-party team that will need access. An example of this would be a homegrown on-prem solution that was developed before your organization embraced a hybrid cloud approach and is still being used.  

Departments where cloud migration would be an enormous undertaking.  

For departments where the time, technical bandwidth, and cost of migrating legacy data files and applications to a cloud-hosted solution would be mammoth, it may make sense to keep these workflows and underlying datasets on-prem to avoid overloading your system and even running it aground—at least temporarily.  

However, over time, the opportunity cost of housing these large files is sure to surpass the cost of moving them. Still, high-resolution images likely won’t be the first workflow that is migrated to the cloud. 

Cloud pros: Cost, elasticity, innovation, backup, compliance, security 

Cloud infrastructure means you outsource the management and maintenance of your data center to a third-party provider. There are a few different levels of cloud offerings, but they all generally operate in the same way. A lot of innovation and new entrants to the healthcare space are turning to the cloud to accelerate the ability to introduce, deploy, and/or develop new tools and solutions.  

Primarily provided by one of the tech giants (Amazon Web Services, Microsoft Azure, or Google Cloud), public clouds offer multi-tenant access to an off-site data center. This is, by far, the most common option among healthcare organizations because of the scalability, availability, regulation, and compliance required in this industry.  

Alternative cloud offerings include smaller public cloud providers and private cloud (single tenant) offerings that a third-party hosts. These options can even be located in the health system’s on-site data center.  


Not only does a cloud deployment help you avoid the majority of upfront capex costs, but ongoing opex costs are also lower with the cloud because you gain economies of scale by sharing recurring expenses with your cloud-mates.  

On top of this, you can reduce the number of IT resources required to manage and maintain your infrastructure (or redeploy these resources to focus on your organization’s mission of providing top-notch patient care). This also includes the financial benefits of more frequent, lighter-weight upgrades and enhancements when outsourcing the management of cloud- hosted applications.  

Elasticity and agility.  

Cloud vendors make sure healthcare organizations aren’t left high and dry by allowing them to purchase more storage space or computing power on an as-needed basis, which is known as elastic demand. As the amount of storage an organization requires increases, cloud vendors offer bulk pricing, so the incremental cost of an additional unit of storage goes down as the total storage required increases.  

The same goes for computing capacity. Whether a spike in usage is caused by an artificial intelligence (AI) or machine learning (ML) tool, an extreme uptick in patient activity, or any other use case, a cloud solution can help your organization scale up bandwidth for a temporary period to work through the spike, and then bring bandwidth back down to normal levels.  

Backup and disaster recovery.  

Being able to store a copy of your organization’s tools and data, especially as it pertains to disaster recovery, is critical. Should a natural disaster occur at your on-prem location, you could fail to recover this information, or struggle to keep core systems from capsizing during a catastrophic event.  

With public cloud-hosted offerings, you can copy data and application configurations across different sites, where the physical location of the servers does not impact the organization’s ability to use and access the stored information.  

Regulatory and compliance.  

Cloud offerings that meet region-based compliance requirements (HIPAA, GDPR, NZ Privacy Act 2020, and The AUS Privacy Act, to name a few) have become more widely available as cloud vendors have invested in meeting the needs of healthcare buyers. It’s important to sign a business associate agreement (BAA) with every cloud vendor handling protected health information (PHI), including any third-party tools that the cloud vendor is offering, to ensure responsibility and accountability.  

While there is certainly a need for upfront scrutiny, and security rules require healthcare organizations to run a tight ship by conducting risk assessments of their cloud deployment, these are significantly lower hurdles to navigate than taking on the full burden of compliance for an on-prem stack.  


The rising threat of cyberattacks for healthcare is real and is something to consider when outsourcing your infrastructure. Even so, in this day and age, fears that security will be more lax in the cloud have been disproven.  

While this is very much a decision that you need to make based on your organization’s risk appetite and your ability (and budget) to employ the cybersecurity resources to implement technical controls in your on-prem environment, public clouds are as much of a safe harbor as on-prem options, meaning you can move your data over to a public cloud without increasing your overall risk.  

That said, in the unlikely event of a cyberattack or data breach, your organization could receive some negative press, but you can mitigate reputational risks because the cloud provider bears the brunt of the responsibility for security.  

Cloud cons: Geographic regulation, reliance, competition  

Geographic regulation.  

Depending on where you do business, going with an on-prem stack can be less difficult when it comes to geographic data compliance. If you’re based in Germany, China, or any other region that prohibits patient data from traveling outside regional borders, you will need to ensure your cloud provider can either deploy guardrails to keep data within the data center(s) located in your geographic region or make use of a cloud provider that exclusively operates within a specific country/region. In some cases, you may need a solution that can work in multiple regions.  

Needless to say, this can make things complicated. Depending on where you are located, finding a cloud host that is geographically bound and able to offer all the benefits of a multinational cloud vendor can turn into a proverbial needle in a haystack search. Much like the initial resistance to even consider a move to the cloud, this is starting to shift, and the options are ever expanding.  

It also introduces some risk if that vendor is not agile enough to comply with changing regulations. Or as they expand the geographic reach of their offerings, it’s difficult to maintain data provenance for the original region or regions. Ultimately, we recommend working through those details, and examining the current and emerging options. On-prem may result as the recommended option, especially for PHI.  

Reliance on cloud vendors.  

With cloud infrastructure, an organization is reliant on the standard operating procedures (SOP) and service level agreements (SLA) of its cloud vendors. For the most part, this is a strength of a cloud service provider (CSP), as they have dedicated staff on hand to jump on any problem at a moment’s notice.  

However, in the event of an extended or unexpected downtime, the only course of action is to call the cloud vendor’s customer service and wait for them to fix the problem, which leaves the IT organization adrift in the meantime.  

Perceived competition from cloud providers. 

Most leading cloud vendors are working to enter the healthcare market and provide tools and services beyond the cloud. This has led some healthcare IT leaders to be hesitant to adopt the cloud.  

The main concern is not that a public cloud vendor would steal data, but that a cloud vendor may be able to derive insights from metadata or cloud activity that a healthcare organization would deem competitive. While there is no data available to confirm whether cloud companies are doing anything less than above board, some healthcare organizations are electing to partner with vendors on top of their public cloud service provider to leverage industry expertise and avoid this potential risk.  

Scenarios where cloud is the best option   

Given the significant cost and scalability benefits of leveraging cloud infrastructure, it’s easy to see why healthcare is growing more inclined to use the cloud. The following tools, data, and workflows commonly top the cloud migration priority list. And when you’re ready to migrate to the cloud, we recommend employing a managed service partner to offload the burden from your team.  

High-bandwidth tools.  

Because of the (somewhat) infinite bandwidth in the cloud, tools that can overload your system due to periodic spikes in bandwidth are well suited for the cloud. These include AI, ML, clinical decision support (CDS), and population health management solutions. Any tool that is going to use a large volume of data or computing power, but only for a short burst of time (hours to days), would be a great candidate to move to the cloud.  

Non-critical workflows.  

Non-critical workflows such as document collaboration, emails, test workloads, development workloads, tools, and engines are also strong options to move to the cloud. Because of the lack of sensitivity around this information and potential for significant volume (especially at larger institutions), moving these solutions to the cloud is relatively low risk.  

Long-term archival.  

Any information, files, or data that you are unlikely to access in the near term, but need to retain for reference, compliance, or other reasons, qualify as great candidates for cloud storage. Because of the lack of access required for this information, these files are likely just taking up space on an on-prem server where a higher priority tool or dataset could live.  

Business continuity and disaster recovery.  

As opposed to on-prem business continuity and disaster recovery (BC/DR) where you run the risk of the same natural disaster knocking out your primary and back-up environments, the cloud (by design) can move these back-ups offsite and ensure core business operations and/or data and IT infrastructure are safe in the event of a disaster or unplanned incident.  

This is a relatively easy value proposition for most organizations, and a huge benefit of the cloud, as the ability to enable resiliency is relatively easy. BC/DR should find itself toward the top of most healthcare organizations’ priority lists when considering what to migrate to the cloud first. 

The big 3 as-a-service offerings  

There are three main cloud service options you can leverage to jump on board with cloud. 

 Infrastructure as a Service (IaaS) Platform as a Service (PaaS) Software as a Service (SaaS) 
Control High Medium Low 
 Effort  High  Medium  Low 
 Applications  Provider Managed  Provider Managed  Cloud Managed 
Data Provider Managed Provider Managed Cloud Managed 
Middleware Provider Managed Cloud Managed Cloud Managed 
Dedicated Developers Yes Yes No 

Learn about our cloud offerings, including Corepoint as a service, Rhapsody as a service, and Envoy iPaaS.

A hybrid cloud approach won’t leave you high and dry 

Though it might sound tempting to move all on-prem applications and data to the cloud, we recommend a hybrid cloud approach that uses public cloud services alongside on-prem options for the most sensitive and critical applications.  

Risks around management, governance, security, and cost must be evaluated for your organization to ensure that the right applications move to the cloud at the right time. For some use cases, the decision is clear. Analytics solutions where huge spikes in usage are common will benefit from the cloud. On the other hand, for robotically assisted surgical (RAS) devices where latency can mean the difference between surgical outcomes, on-prem is a more attractive option.  

Other times, the decision will be foggy. In general, you should avoid investing in tools that are optimized for on-prem as you’re essentially investing in legacy technology. At the same time, buying a solution that can only be deployed in the cloud could necessitate multiple solutions, which will result in higher costs.  

Solutions that are optimized for cloud deployment, but also able to handle on-prem use cases are ideal. Having a modern solution that is best of breed in both on-prem and cloud deployment scenarios will provide you with the capabilities you need when and where you need them.  

When to take the cloud plunge  

Discussions on expanding your cloud footprint usually occur when you’re facing a significant upcoming investment. This could come in a few different forms, including:  

  1. You’re starting to run out of physical storage space in your on-prem stack and need to invest in more 
  1. The cost of maintaining your on-prem system is getting out of control  
  1. You’re considering buying a new digital health solution, and it’s only offered in the cloud  
  1. The hardware and software in your on-prem data center require refreshes as they move to end of life for support  

Smooth sailing to hybrid cloud with Rhapsody

In either case, it is important to navigate your journey in an agile way, constantly refreshing your technical roadmap to address the goals and needs of your organization.  

When in doubt, prioritize a vendor with solutions that can be deployed both on-prem and in the cloud, meeting you where you are. With Rhapsody, you’ll get an interoperability partner that’s actively investing in a cloud-based offering, while still providing robust support for legacy on-prem situations.  

Plunging into the cloud doesn’t have to be a sink-or-swim situation. We’ll help you power your applications and workflows—no matter where they reside—for smooth sailing to hybrid cloud. 

For further reading

Get the guide to Moving Health Data Integrations to the Cloud

Learn how Rhapsody supports your move to the cloud

Do you use Amazon Web Services? Find out how you can benefit from the Rhapsody + AWS partnership.

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