Cloud Computing: Why it’s a better option

March 21st, 2016 / By AJ Dandrea

Computer and technology hosting in the last ten years can be categorized into three distinct relationships: Co-locations, managed services and the Cloud. It is a bit confusing to understand, but there is value in understanding these distinctions when it comes to how your business operates, how your partners operate and how these different hosting relationships can influence your goals.

The first, referred to as a “co-location” because one would locate their equipment on the site of a hosting provider in order to have physical security and highly available, robust capabilities in the form of air conditioning, power and bandwidth. A co-location allows a company to continue to own their servers and maintain control over their infrastructure. However, a co-location is expensive to maintain and commonly requires capital investments to refresh its hardware every two to three years. Co-locations were the primary hosting relationship ten years ago and more, but in healthcare IT, technology solutions have become more complex. “Our” (including my peers in Information Technology Operations) ability to estimate the right amount of “stuff” is rarely accurate, often resulting in either under- or over-utilized equipment.

A co-location also requires a robust IT team to manage support for both the hardware and the software. This can be a particular challenge to companies with very busy IT teams. In IT operations, technologists will often “stretch the rubber band” of a long work day in our roles (we are in IT after all!), but stretch that rubber band too often and it will break. Co-locations are great if things are stable, but when things go wrong they can have a negative impact and quickly lead to burn out of talented teams. Ultimately, co-location efforts often produce either undersubscribed or oversubscribed investment in technology that’s rarely accurate. As an industry, we were wrong two out of three times when sizing for a co-location. Lastly, it also takes a while to order and install equipment for co-locations.

How many times have your short-term goals been challenged by a directive, “We will have to place an order for equipment – with a six-month lead time”?

Over time, co-locations evolved into managed services hosting. A managed services hosting provider not only offered the benefits of secure, stable infrastructure, but also supported it after hours. This allowed for a more intimate partnership with the managed service provider, making it possible to build a relationship in support of your hosted technology or service, while partnering for accountability in providing availability. However, managed services come at a premium cost. Not only do you pay for the hardware and the software, but often a large markup for the services (e.g. backups, database operations, etc.). My industry observation is that there are great benefits in managed services that many companies can take advantage of – however, you have to put the effort into the partnership for it to reach its full potential.

An example of this would be transitioning support to a managed services provider, or granting access to equipment and services in order to build a knowledge base and support call centers. It requires a bit of business vulnerability, but it can be balanced by selecting the right partner. In managed services hosting, maintaining protected health information may be a challenge due to the Health Information Portability and Accountability Act (HIPAA) and the “minimum necessary” principles. Managed services hosting has become more popular than co-locations; however, due to further commoditization in industry cost transparency, more businesses are selecting Cloud computing.

What makes Cloud the better option?

The simple answer is that it provides solutions for the problems and workflows related to both co-locations and managed services hosting. A business can be online in hours and working towards hosting their technologies instead of working with vendors to size the right order. The Cloud can offer measurable savings and less upfront investment than both co-locations and managed services hosting. Due to the popularity of the Cloud, a business can partner for the services (backups, 24×7 support, etc.) that “stretch” their teams, providing a better fit for the operational gaps.

Ultimately, the Cloud has what neither co-locations nor managed services hosting have in terms of platform. The more popular Cloud offerings have hundreds, and for some, thousands, of dedicated programmers looking to improve the platform of services offered with the Cloud. The reality is that most companies cannot compete with the sheer volume of effort into platform that good Cloud providers offer.

Have you thought about a workflow going to the Cloud?

If you are like me and had concerns, do a bit of research and you may find other companies with similar workflows have already made the move. No worries if you are late, there is plenty of Cloud out there. 

AJ Dandrea is operations manager of the cloud hosting organization at 3M Health Information Systems