Healthcare Data Center Solutions: On-Premises vs. Cloud


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On-premises and cloud data centers are two valuable options to consider when it comes to storing your vital healthcare data and hosting the applications you depend on to deliver quality care. Learn how these options compare and how you can make the right choice for your application.

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Priorities in Storing Healthcare Data

Healthcare data comes in all shapes and sizes, but there are a few key priorities that should define all effective healthcare data storage solutions: preservation, accessibility and privacy.

Data Preservation

Physical records are prone to issues like getting lost or damaged and are only accessible if you’re in a specific location where records are stored. It’s no wonder electronic health records (EHR) have become the new standard, but digital records present vulnerabilities of their own. Healthcare organizations need digital storage solutions that can house ever-growing volumes of data while maintaining its integrity.


Data must also be consistently accessible. EHR systems, for example, must be available at all times to ensure providers can deliver quality care based on an accurate understanding of a patient’s health history, current diagnoses, drug allergies and more. The wealth of data that internet-enabled medical devices record should also be available (ideally in real time), to provide valuable insights into a patient’s condition.

Data Privacy

Any data involving protected health information must be kept private and secure, per the Health Insurance Portability and Accountability Act (HIPAA). Your organization’s records involving staffing and finances are also sensitive and should be protected from unauthorized access. Data breaches can have severely negative consequences for healthcare organizations, impacting compliance, brand reputation and more. The average healthcare data breach in the U.S. costs companies $15 million!

What’s the difference between on-premises and cloud data storage?

Healthcare data centers can either be located on-premises or be located off-site and managed by a third-party provider. Let’s explore the differences that define these two options:

    • On-premises: On-premises data centers operate at or near your healthcare facility, allowing you to keep your data storage and computing completely private and fully managed by your organization.
    • Cloud: With cloud data centers, your data and applications are hosted off-site by a third-party provider that manages many of the logistics of your computing and data storage.

• Public cloud: Most people associate cloud storage with the public cloud, which uses centralized data center infrastructure and is accessed through the public internet.
• Private cloud: Private cloud is another option to consider. Like the public cloud, your computing is hosted by a third-party provider. But in this case, the cloud infrastructure is allocated for your company alone, keeping your data storage more private.

What data storage methods are healthcare organizations employing today?

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Supporting the Same Use Cases

Cloud adoption has been picking up considerably in the healthcare sector; According to Forrester’s 2023 State of Cloud in Healthcare report, 73 percent of surveyed organizations are using multiple public cloud vendors. 

However, a 2023 report from Skyhigh Security found that just 47 percent of healthcare organizations are willing to store sensitive data in the cloud—a notably lower percentage than other industries. That shouldn’t come as much of a surprise; keeping sensitive data private is a chief concern for healthcare organizations. On-premises data centers remain a staple of the healthcare industry, in part, because they allow for more control over sensitive data.

Many organizations employ a hybrid approach, leveraging both cloud and on-premises solutions to meet all their needs in the most efficient way possible.

Which option is preferable?

Both on-prem and cloud solutions offer their own distinct advantages, so there’s no out-and-out winner between the two. So, how can you choose the right computing solution for you? Determine which of these factors matters most to you, and see whether on-prem or cloud wins out:

  • Security and compliance: Assess how each option addresses security measures, encryption, access controls and compliance. Keeping your data on-premises allows you to implement all the safeguards you want, but you may also be able to find a cloud provider (especially a private cloud provider) that offers a level of security you’re comfortable with.
  • Control: Closely related to security is the level of control you want to maintain over your own IT infrastructure. On-premises solutions offer greater control and visibility over data handling and management, whereas cloud solutions may involve relinquishing some control to the cloud provider.
  • Reliable access: Evaluate the reliability and uptime guarantees of both on-prem and cloud solutions—cloud providers will call this a service-level agreement (SLA). Some organizations choose to keep data on-site and back it up to the cloud for redundancy, enhancing their disaster recovery capabilities and ensuring continuous access to their data if either data center experiences an outage.
  • Scalability: Determine whether the infrastructure can accommodate the evolving needs of your organization. Cloud platforms often offer scalability on demand, allowing for seamless expansion or contraction of resources based on demand fluctuations. You can achieve a similar level of scalability with modular on-premises solutions.
  • Cost: Conduct a comprehensive cost analysis that includes all the factors that could influence your total costs over time, such as capital expenditures, maintenance, upgrades, staffing and usage rates. Keep in mind that, even with the higher upfront cost of deploying a healthcare data center on-site, you could save in the long run by foregoing the ongoing fees associated with the cloud.
  • Performance and speed: Assess the performance and latency requirements of healthcare applications and smart medical devices that are transmitting data. Consider factors such as network connectivity, proximity to end-users and the computational power required for data processing. If you need to ensure real-time data transfer with minimal latency, an on-premises solution is generally preferable.
  • Physical space: If you have limited physical space for data storage on-site, cloud storage may be preferable. However, all-in-one modular data centers make it easy to install healthcare data centers on-site anywhere on your property without needing to take up space inside your facility.

Finding the Right Healthcare Data Center Solution

The choice between on-premises and cloud healthcare data center solutions (or combining the two in a hybrid approach) hinges on balancing priorities and finding the solution that best aligns with your goals and resources.

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