Cloud vs. On-Prem: Is there an optimal balance?

For an increasing number of organizations the cloud has become a viable option, but health IT managers still face a case-by-case decision when it comes to the percentage of their IT systems they should migrate.

Jeff Rowe | Mar 19, 2018 08:28 am

There’s no doubt organizations in healthcare and across the economy are spending a lot of money on getting into the cloud, but according to many experts the majority of organizations actually only run about 10 to 20 percent of their workloads on cloud software.

That’s not necessarily surprising, as the fact remains many IT operations might be better left on-prem.  Writing recently at Datamation, tech writer Cynthia Harvey walks though the decisions most IT managers wrestle with to determine the mix of cloud and on-prem for their organizations.

“Cloud and on-premise software each have distinct advantages and disadvantages that organizations should carefully consider before choosing one over the other,” she says, noting, “Often it comes down to weighing how important it is for an organization to maintain control over an application versus its needs for speed and scalability.”

Arguably the top consideration for most organizations is the potential savings. “Instead of paying a big licensing fee upfront,” Harvey says, “customers pay SaaS subscription fees on a recurring (often monthly) basis. That allows them to convert some costs from capital expenditures (Capex) to operational expenditures (Opex), which might have tax benefits and/or be more attractive to stockholders. Those subscription fees generally include maintenance and support as well, so customers are spared from these add-on expenses that they might experience with on-premise software.”

Moreover, she adds, SaaS eliminates the need for organizations to buy, house, run and maintain hardware — the vendor takes care of all that for them. “They have lower utility bills, and they probably won’t need as much data center space.”

A close second consideration revolves around flexibility. “Ease of deployment is one of cloud software’s strongest advantages. Customers can usually get started using SaaS applications in just minutes.”

As for data security, Harvey notes that has long been a major stumbling block, but she also observes that organizations with several years' experience in the cloud are somewhat less likely to be concerned about security, compared with those who have less experience.

“Many cloud experts say the cloud is actually more secure than on-premise data centers. That's because the large cloud vendors have the money to pay for big teams of security personnel and the latest and greatest security tools.”

Compliance issues, systems management and scalability are some of the other metrics where organizations are finding advantages in the cloud, and there’s no doubt that the recent trend has been away from on-premise software and toward cloud-based applications. 

But while most experts believe that trend will continue, Harvey notes “those same experts are also generally quick to point out that it is unlikely that most organizations will ever move completely to cloud software.”

Inevitably, it’s a decision that IT managers will have to make on a case-by-case basis.