Health Systems Eye Cloud Migration Amid Rising Virtualization Costs

Faced with escalating costs for virtualization technologies like VMware and Citrix, health system technology leaders⁣ are weighing the transition of core workloads to the cloud. Many are finding that legacy on-premises data centers are reaching the end of their lifecycles.

Tim Calahan, CTO at Michigan Medicine,‍ is among those spearheading cloud adoption. He said traditional data centers have been reliable for decades,but the technologies powering them are aging and licensing costs are rising. For many, the question is no longer if they ⁢move‍ to the cloud, but how.

Calahan noted that at a ⁢recent conference, CIOs and CTOs voiced concerns about rising expenses tied to⁣ virtualization tools.⁢ He said Citrix costs are doubling with every renewal, and now VMware is following suit, prompting organizations⁤ to seek alternatives.

For Michigan Medicine, moving to the cloud⁢ is more than a financial decision. Calahan said a total cost of‍ ownership (TCO) analysis found that transitioning ‍to the cloud was cost-equivalent to remaining on-premises. However, ⁢the cloud offers enhanced security, resilience, and⁤ access to next-generation tools.

Despite the perceived benefits, not all health systems are ready to make the leap. Calahan noted a lack of a prescribed path forward. As costs rise, organizations are reevaluating their strategies, with some considering reverting to physical servers or exploring open-source alternatives.

The reluctance to embrace the cloud stems largely from uncertainty. Calahan said organizations unfamiliar with cloud migration question whether performance will match what they’ve achieved in their own data centers.

Another key challenge is ‍expertise. While major consulting firms specialize in‍ either cloud computing⁢ or EHR ⁤deployment, fewer possess the⁤ combined knowledge needed to seamlessly migrate Epic environments to the cloud. To fill this gap, Calahan also serves as CEO of EHC Consulting, a firm assisting healthcare organizations with cloud transitions. He said they know how to move Epic to the public cloud.

Michigan Medicine has spent ⁣notable time ⁤preparing for its transition. Calahan said they dedicated a year to ⁢ensure their landing zones, wide-area networks, and security structures were properly configured. Without these foundations, a cloud migration can quickly become a challenge.

The Role of Hybrid Cloud Models and Cloud Selection Strategies

For many health systems, a full-scale cloud migration isn’t immediately feasible. Calahan ⁤said they plan to move about 85% of their 900 applications to the cloud, but some workloads—such as voice-over-IP telephony and radiation oncology systems—require‍ low-latency environments and will remain in a cloud-adjacent private data center.

Latency-sensitive workloads, such as call⁣ center applications and certain imaging systems, frequently enough require high-speed, real-time data exchange that may not be optimized in a cloud-based surroundings. Calahan said these applications need to function flawlessly, so they’re keeping them close, but vendors are adapting their solutions to be more cloud-amiable.

Other organizations are testing the waters by leveraging the cloud for disaster recovery. Calahan said this approach allows IT leaders to establish cloud environments while maintaining their primary operations on-premises, calling it a logical first step.

Determining the right cloud provider is an essential part of the process. Calahan noted that different cloud platforms have different strengths. Epic provides cloud specifications for both Microsoft Azure and AWS, but their imaging vendor recommended Azure, wich played a big role in their decision.

Michigan Medicine ultimately chose Microsoft’s ⁢cloud ecosystem based on a range of factors, including Epic’s ⁤ongoing development⁣ of analytics tools on Azure, AI capabilities, and licensing advantages⁣ for academic medical centers. Calahan said vendor recommendations matter, but so does ensuring interoperability across all critical applications.

Some organizations are opting for a multi-cloud approach. Calahan said ⁣they’ve established cloud environments across Azure, AWS, and Google Cloud, adding that having the versatility to shift workloads between clouds helps avoid lock-in.

Avoiding Vendor Lock-In and Overcoming Internal Resistance

the potential for cloud⁢ providers to increase‍ pricing in the future is a concern. Calahan said they spent ⁢significant time ensuring they ⁣received a fair deal from Microsoft, but they’re also maintaining the ability to shift workloads to AWS or Google Cloud if needed.

Calahan likened the situation to recent frustrations with VMware and Citrix. He said vendors who increase prices without adding value ultimately drive customers away, adding ⁤that the key is⁣ to maintain the ability ⁣to pivot.

To maintain control,Michigan Medicine is prioritizing the ability to move workloads between cloud providers if necessary. Calahan said‍ the key is keeping that⁣ muscle memory active—constantly refining ⁤processes so they can make a shift ⁣if needed.

Health systems considering cloud migration often face internal resistance. Calahan said the biggest pushback ‍comes from uncertainty and concerns about performance, adding that people are used to their current setup,‍ and⁣ change is challenging.

His advice for cios facing skepticism is to start with a structured assessment.He advised understanding your application inventory and conducting ‍a detailed financial analysis. At Michigan Medicine, he said they took 12 months to complete a TCO⁤ assessment, which gave them⁣ the confidence to make their case⁤ to leadership.

Key Considerations for Cloud Migration

• Assess TCO: Before committing to the cloud, conduct a detailed financial analysis.
• Start Small if⁢ Necessary: Disaster recovery in the cloud can serve ‍as a stepping stone.
• Evaluate Cloud Providers by Workload: Some applications⁣ perform best on specific platforms.
• Build Internal Expertise or Partner with Specialists: Moving Epic and⁢ other critical ⁣systems ⁤to the cloud requires specialized knowledge.
• Avoid Lock-In: Maintain flexibility by establishing‍ landing zones in multiple clouds.
• Prepare for Change Management: Educate stakeholders early and often to address ⁣concerns.
• Expect a⁣ Multi-Phase Journey: Cloud transitions frequently enough unfold over ⁣multiple years,requiring iterative adjustments.

Health systems navigating this transition must weigh cost, performance, and risk. Calahan said cloud is the next-generation platform and it’s time to embrace it, ⁣because staying on-prem isn’t sustainable.