Healthcare technology leaders may have noticed a troubling trend in their news feeds recently. Along with updates on macroeconomics, cybersecurity and recent M&A, there were a bunch of headlines suggesting that cloud computing is not a sound investment and doesn’t bring returns.
It’s a patently false narrative fueled by clickbait headlines like “CIOs still waiting for cloud investments to pay off” or “Companies still waiting for their cloud ROI: Everyone jumped to cloud computing to save money, but got the opposite” or even the slightly less melodramatic “The return on investment in cloud spending is not yet tangible”.
The truth is the exact opposite of what teases each of these headlines.
But the damage is already done for anyone who doesn’t dive into the details. They may be left to assume that using the cloud equates to increased costs with no return — which is pure nonsense!
This misperception is particularly insidious when it comes to healthcare IT, where cloud deployments bring enormous benefits—measurable improvements in security, cost control, operational efficiency, reliability, flexibility, and capabilities—as well as the only viable and sustainable means of adapting of technology infrastructure to meet the critical and rapidly changing needs of the sector.
So I think it’s worth correcting the record.
The origin of a myth
The pig fights have begun The Wall Street Journal with opposite acceptance of recent KPMG Technology Report. The WSJ hinted that KPMG survey results show rampant cloud ROI failures and groups of CIOs facing shocking cost overruns. You have to roll and hedge hard to make this fantasy fly – I read the same report. It found that in 2022, “88% of organizations across industries globally are advanced in cloud adoption” and 80% of respondents are “satisfied with the returns their cloud transformation programs have attracted to date.” Here’s the breakdown:
- 32% are “Very satisfied: targets fully met or exceeded; realized benefits and significant return on investment’
- 48% are “Satisfied: achieved most objectives and realized some benefits, with a moderate return on investment”
- 17% are “Neutral: Neither satisfied nor dissatisfied, with some ROI”
- 4% are “Dissatisfied: Achieved few goals or realized few benefits, with limited ROI”
The WSJ you took these results to paint a strange picture of the world suggesting the opposite – that the investment in the cloud is largely not paying off. This subtext permeates their story even when they quote experts explaining that cases of delayed cloud ROI or budget overruns are usually symptomatic of poor implementation or flawed IT strategy. One expert, in fact – John Rose, Global Chief Technology Officer of Dell Technologies he was quoted as saying: “Usually the reason it’s expensive is because they processed the data in a suboptimal way, in the wrong place with the wrong tools and the wrong economic model.”
But of course, some other popular IT publications have caught on WSJnoisy slant of in his own comments with similarly shady titles – although the lyrics of these articles also reiterate that if you’re not getting a good ROI from the cloud, you’re probably doing it wrong.
I guess “Most People Happy With Cloud Transition, Some Make Mistakes” just isn’t a snappy headline.
The truth is out there
The most alarming aspect of these headlines is the implication that there is an equally powerful but cheaper alternative to cloud adoption and that provided by public cloud hyperscalers such as AWS or Azure. It simply doesn’t exist – even if the dream of lavish budgets, abundant and expert staff and data centers full of state-of-the-art hardware could be continuously fulfilled on-site and in-house by any company – much less any organization in the IT industry. healthcare.
Dollar for dollar, nothing else even comes close to the cybersecurity, resiliency, flexibility, and scalability provided by public cloud infrastructure. The KPMG Technology Report 2022 actually countries that “cloud adoption is no longer the mark of a digital leader, but simply the logical evolution of IT.”
Don’t just take it away from me; you can search for others Healthcare CIOs and IT leaders, consultantsand researchers. Read it regarding 8 healthcare organizations are experiencing “reduced costs and shorter project timelines, with many reporting improved care coordination while using Microsoft Cloud technologies.” Or consult analysis of 28 AWS “customer-specific business cases from healthcare providers around the world… ranging from local providers with 300 beds to national organizations with more than 5 million patients” that project a combined cost savings of $208 million. “The payback period for healthcare providers in the analysis was 15 months on average.”
Are some cloud transitions done in stages? Sure. Are some of these migrations very complex? Absolutely. Do some fail to capture the full cost optimization? Also yes. Do you know someone who is abandoning the cloud and going back to their old IT infrastructure? Well, right?
The cloud operates in a fundamentally different paradigm than the IT infrastructure of the past, and adopting big changes is rarely free or easy. But the benefits of development are obvious and too great to ignore. The power of the cloud is what’s driving the rapid digital innovation we see in almost every other industry – and enabling healthcare organizations to solve increasingly complex problems more affordably, quickly and reliably.
That’s the simple truth.
Photo: shylendrahoode, Getty Images