Half of the go-forward products of health IT vendors recently interviewed by KLAS Research are either cloud-native or have been migrated to the cloud. Mike Smith, vice president of business development at KLAS, spoke with Healthcare Innovation about how those vendors’ perceptions and relationships with Amazon Web Services, Microsoft Azure and Google Cloud Platform are evolving.
Smith first explained why the research firm chose to interview the software vendors about public cloud companies.
When health system CIOs make a decision about which software vendor to use, it is becoming increasingly important to them which public cloud providers those vendors are aligning themselves with, he said. Some of these software vendors were either born in the cloud or are actively migrating to the cloud. “We've actually seen decisions made that have been somewhat focused on what the underlying technologies are,” he said. “We've seen a lot of movement to the cloud on the ERP front, for example. Many people trying to decide which of the vendors they want to go with are probably going to be interested in understanding where they are on their journey to the cloud. We thought it would be helpful for us to amplify the voices of vendors in regards to how well these cloud providers are performing, in part because they may be the biggest customers that these cloud providers have in healthcare. If we can find out what the software vendors’ experience has been, we think it'll actually help the health systems get better visibility into what's happening on the cloud front and how well these cloud providers are performing.”
KLAS interviewed 44 health IT software vendors for the December 2022 report, which broke vendors down by segment. In terms of making the most progress on cloud migration, telehealth providers were most advanced, followed by population health, analytics vendors, payer vendors, imaging and core clinical EHRs, where none have all cloud-native products.
“In some of these categories, like telehealth, data analytics and population health, some of those newer vendors were born in the cloud,” Smith said, so they did have a little bit of an upper hand. The ones that have legacy solutions have got ground to cover, he said. “In some cases, they are well down the path and have already made what Smith would call a full migration to the cloud. Now they are in the process of trying to get clients moved over to their go-forward solutions. "We certainly see some areas like imaging that are still lacking. It is going to take some more time, and part of the reason is that they have so many legacy solutions to move over.”
Any new applications the acute care EMR vendors are building are going to be cloud-based, Smith noted. “I talked to one vendor that has around 20 different products. Most of their products are actually cloud-based solutions, except for their core legacy solution. But that legacy solution represents a high percentage of their revenue. They've moved it to the cloud, but it's more of a ‘lift and shift’ than really being a cloud-native solution, so they've got work ahead of them to really modernize that application and make it more efficient. Some of those are just going to take a long time.”
In terms of how these vendors perceive the three public cloud vendors, Smith said that Microsoft Azure is gaining momentum with software vendors who say they appreciate its integration capabilities and the healthcare industry expertise of its team. AWS is seen as the market leader, and is considered by 95 percent of the vendors interviewed. Google Cloud Platform comes in third in most ratings, but the respondents said it does offer competitive pricing. Interestingly, about one-third of the vendors said they use multiple cloud providers.
As far as improvements they would like to see, Smith said the health IT vendors said they would like all three public cloud providers to offer more help with cost management tools and they would like the cloud providers to take on more security risk and help them with ransomware issues. They would also like to see more interoperability between cloud providers, he said.
While this is the first KLAS report that looks at how the health IT vendors perceive the cloud platforms, Smith said KLAS will continue to assess health system and vendor use of the cloud. “This has been a long time coming,” he said. “We have been hearing about the cloud for 12 years or so. The health system executives are saying they now prefer cloud-based solutions if they can find them. It helps them shrink their data center footprint.” There have been announcements about health systems moving their instance of Epic to the cloud, so it will be interesting to hear about their experience after those transitions are made, he said.