Partly Cloudy

According to a new CDW report, privacy concerns may be keeping healthcare organizations from adopting cloud computing initiatives. The poll also found that small businesses are generally unaware of the benefits from adopting cloud computing technologies. Finally, a survey from Newtek Business Services, Inc. reported that a vast majority of small businesses have never even heard of cloud computing.

Focal Points:

• CDW's new "Cloud Computing Tracking Poll," which interviewed 1,200 IT professionals in the education, government, and healthcare industries, found that healthcare organizations have been slow to adopt comprehensive cloud computing strategies. According to CDW, the primary reasons for this involve concerns about cloud management, data security, and privacy. Specifically, 53 percent of respondents said that their management does not trust data security in the cloud. Despite this, 84 percent of respondents reported that they are using various individual cloud applications. However, only 30 percent of these respondents identify themselves as cloud users, who are implementing or maintaining cloud computing. The cloud applications being used include collaboration, conferencing, e-mail, and online learning, said CDW. Of the respondents, 39 percent and 34 percent cite using Microsoft Corp.'s Office LiveMeeting and Cisco Systems, Inc.'s WebEx, respectively. Moreover, the poll found that 24 percent use Google, Inc.'s Gmail, and only 12 percent use Salesforce.com, Inc.'s sales and marketing applications. Healthcare organizations are also using cloud storage services and productivity suites, with 18 percent using Google Docs, CDW added.  Although healthcare organizations have been slow to adopt public clouds, CDW reports that they are using private clouds. The poll found that 21 percent of respondents have implemented, automated, and fully supported private cloud infrastructures.
• According to the same CDW poll, 28 percent of U.S. organizations across the education, government, and healthcare industries are using cloud computing today. Moreover, 73 percent said that their first step into the cloud was the implementation of a single cloud application, primarily commodity applications. Specifically, 50 percent of respondents report using e-mail, 39 percent file storage, 36 percent Web conferencing, 34 percent online learning, and 32 percent video conferencing, said CDW. Respondents also estimated that, on average, 42 percent of their current services and applications will be able to operate in the cloud. The CDW poll also found that cloud users expect to spend no more than one-third of their IT budget on cloud computing by 2016, while saving 31 percent of their IT budget by using cloud applications. Meanwhile, non-cloud users expect to spend slightly more than one-quarter of their IT budget on cloud computing by 2016, while saving 23 percent. Today, 84 percent of cloud users report that they have cut application costs by moving to the cloud. On average, they have saved 21 percent annually on those applications moved to the cloud, added CDW.
• A new survey from Newtek found that an astonishing 71 percent of small businesses have never heard of cloud computing, underlining a fundamental lack of knowledge about the technology. However, the concept of cloud computing has begun to disseminate into the marketplace, due primarily to large advertising programs by Microsoft and Cisco, said Newtek. The poll interviewed approximately 1,800 respondents, of which only 26 percent had heard of cloud computing and could describe what it was. According to the poll, about 25 percent of business owners said that they understood what cloud computing was. However, when drilled down deeper, 78 percent thought that their data is secure. Meanwhile, 71 percent of respondents acknowledged that they do not back up their critical data offsite, Newtek added.

Experton Group believes the benefits of cloud computing are being achieved in non-critical areas but until the concerns about management, privacy and security are resolved, the full value of cloud computing will be deferred. One key to healthcare cost containment is widespread electronic medical records (EMR) adoption; however, current estimates are that fully functional EMR systems are in use by about 10 percent of the physician offices. The slow adoption rate is due to the reasons cited above as well as the required investment in funding and time. Until people believe the benefits outweigh the costs and risks, the goal will not become a reality. Business and IT executives appear to be willing to move what are perceived to be non-critical applications to cloud environments, but continued highly-visible cloud failures – and the risk exposures they bring about – will dampen executive commitment to cloud computing. IT executives should be encouraged by the savings claimed to be achieved by moving applications to the cloud, although that number is strikingly similar to claimed outsourced savings, much of which failed to materialize. IT executives should move cautiously to the cloud, by ensuring the contracts provide all the needed data integrity and protection, privacy, security, and service level agreements. IT executives should also baseline the current costs for any application moving to the cloud so that an accurate benefit analysis can be performed.