Healthcare IT Modernization Opens Door for AI and Hybrid Multicloud

Nutanix Enterprise Cloud Index study shows the healthcare industry taking a cloud-smart approach to IT, focusing on patient care, operational efficiency and new capabilities from artificial intelligence.

By Joanie Wexler

By Joanie Wexler April 30, 2024

From personalized health plans to precision robotic surgeries, technology advancements continue to reshape healthcare delivery around the world. The news is brimming with anecdotes, for example, of providers combining patient data with AI-driven processes and analytics to improve diagnostics, risk prediction, and overall patient care.

The recently published 2024 Enterprise Cloud Index (ECI) report revealed some specifics about how providers are harnessing the latest and greatest in tech to move the needle forward on healthcare outcomes. 

“Healthcare organizations have traditionally lagged in tech adoption, but this year we’re seeing a significant change,” said Leah Gabbert, director of marketing, Global Industry Solutions at Nutanix. 

“In fact, 80% of Healthcare ECI respondents stated they’re planning to invest in IT modernization. Healthcare organizations are clearly focusing on future-proofing IT infrastructure today to prepare for the needs of tomorrow, including AI, security and sustainability.”

IT pros in this sector reported, for example, that they’ve earmarked the lion’s share of their near-term budgets for modernization projects that should ease AI deployments and the adoption of other emerging technologies. Respondents also indicated that striking the right balance of hybrid IT operations is paramount to meeting their goals.

“I want to dip my toes in the water with emerging technologies, but I also have a responsibility to make sure that it’s fiscally responsible for my organization because I can’t have waste. Waste takes away from patient care. It takes away from staff retention. It takes away from the ability to grow,” said Isaiah Nathaniel, CIO of Delaware Valley Community Health, in a Tech Barometer podcast. 


The Spirit and Hybrid Multicloud Mindset of a Healthcare CIO

“Particularly in the non-profit space, I’m always asking ‘Where’s the business case?’ or ‘What’s the business need?’ Only then “Will I introduce a new application or add to one that already exists?” 

A mid-level IT team leader summarized the vast potential of AI in the healthcare field when he described his organization’s plans: “Virtual health assistants can provide patients with health advice, monitor patients' conditions, provide alerts to reduce health care costs…and improve the efficiency of treatment.”

The 2024 ECI report is based on a survey of 1,500 IT professionals worldwide, including 184 in private and public healthcare organizations. It was commissioned by Nutanix and conducted by U.K.-based Vanson Bourne in December 2023.

Putting Their Houses in Order

Healthcare organizations have been evolving their IT environments to allow AI and other workloads to run in the “best” available infrastructure, as measured against their priorities for performance, cost, security, and other variables. This “cloud-smart” approach involves embracing private on-premises and/or hosted data centers in combination with one or more public cloud platforms, with the ability to move workloads among them as business goals and market offerings fluctuate.


Report Shows Top Demands Driving Hybrid Multicloud Adoption

For example, some organizations run AI-driven workloads in the public cloud to meet the technology’s stringent requirements for massive, highly scalable computing power. Others, with deeper pockets and greater in-house expertise, opt to run those workloads in private infrastructure for security and privacy reasons. This mix-and-match, choice-centric approach requires simple, fast workload mobility and a way to ensure consistent operations across all environments. It’s not surprising, then, that application portability tied with support for AI as the most important IT purchase criteria among healthcare respondents, with 17% selecting each of these factors as their number one priority.

Reflecting this trend, containers, which virtualize software applications so they can run in any cloud environment, are increasingly making their way into IT budgets. For example, 58% of healthcare respondents said that they had containerized 50% or more of their applications, and only 1% said they hadn’t containerized any.


Containers Progress in a World of Data Center Virtualization

Another measure of cloud-smart progress was the notable jump in infrastructure interoperability during the past year. Last year, just 40% of healthcare respondents said their various IT environments were fully interoperable, while 57% said so this year. This improvement is likely a result of the ramp-up in containerization and greater availability and adoption of unified cloud management tools.

Mixed-Deployment Surge

The vast majority of healthcare organizations surveyed (93%) agreed that they had adopted the cloud-smart approach described, as evidenced by a surge in their use of mixed-cloud environments: nearly three-fourths (73%) reported using multiple IT infrastructures this year, up from 53% last year.

Moreover, the percentage specifically using the hybrid multicloud IT operating model – private infrastructure combined with two or more public cloud platforms – grew from just 6% last year to 16%. As such, healthcare slightly surpassed this year’s global cross-industry adoption average of 15%.


Why Businesses Deploy Hybrid Multicloud IT

The nine ECI industries surveyed varied significantly in their hybrid multicloud adoption levels, with healthcare landing in the middle. The industry with the greatest adoption was education, which reported 47% penetration. At the other end of the scale was the global public sector, with just 8% penetration.

Among 6th Annual ECI healthcare respondents, the use of hybrid multicloud is expected to more than quadruple in the next three years while adoption of the multicloud model (multiple public cloud platforms) will jump 2.5-fold. Growth in these areas will be offset by declines in on-premises private data centers, hybrid clouds (private infrastructure plus a single public cloud platform), and the use of a single public cloud platform (figure).

Healthcare IT Operating Models in Use and Planned

It’s important to note that while general use of the private data center/cloud model is expected to drop from 18% usage today to just 5% in three years’ time (figure), that decline can be specifically attributed to reductions in on-premises infrastructure. By contrast, private data center usage in the form of hosted/outsourced services is actually poised to nearly triple within three years, as indicated by the figure’s private infrastructure breakdown, shown in orange.

Putting AI to Work Amid Uncertainty

AI ranked consistently high in healthcare IT priorities, coming in second to modernization in terms of “significant” IT investment plans for the coming year. AI was also mentioned second most often as the top CIO/CTO/business leadership priority in respondent companies following the acceleration of application development. 

At the same time, nearly 85% agreed that AI-related privacy issues were a concern, and nearly half (48%) “strongly” agreed. Moreover, nearly a third (32%) described running AI applications as a “significant challenge.”


How AI Can Evolve Healthcare Services

The responses reflect how AI is rapidly grabbing mindshare for its ground-breaking potential and outstanding unknowns. Respondents expressed excitement for AI use cases in healthcare, which ranged from achieving automation-based cost reductions to improving treatment efficiencies.

A mid-level IT manager in a public healthcare organization said AI is “widely used in our organization not only to improve the accuracy of diagnoses but also to assist us in helping patients better manage chronic diseases… and improve our treatment efficiency.”

Another respondent, a board-level IT decision-maker in a private healthcare institution, said, “We can optimize resource allocation with AI-powered forecasting, which leads to more economical utilization of funds and resources.”


IT Leaders Get AI-Ready and Go

As in other industries, AI has game-changing customer service applications in healthcare. 

“AI-powered chatbots and virtual assistants provide…customer support, answer common questions, and handle routine inquiries, improving our customer service while reducing labor costs,” said a board-level IT decision-maker in a large private healthcare organization.

While most respondents noted that there are still security and privacy ramifications of AI to be identified and managed, they also said they anticipate using AI algorithms to help alleviate other cyber risks, particularly those related to ransomware and other malware.

 “We can [use AI to]…spot possible attacks in real time using security solutions, which improves consumer and organizational safety,” said an IT decision-maker at the board level in a private healthcare institution.

Healthcare IT pros most often mentioned improving their companies’ security posture and regulatory compliance as reasons for moving applications to a different infrastructure in the past year, and 98% of healthcare respondents reported having moved at least one application.

Top Trends

IT pros are taking a cloud-smart approach to IT infrastructure, which demands hybrid operations that transcend private and public cloud platforms. This is evident in healthcare respondents’ stated buying decision criteria and plans for IT investment in the coming year, which largely focus on IT modernization, AI deployment, and application portability.

The growing pervasiveness of mixed-IT models in general, and hybrid multicloud in particular, shows that applications and data will continue to favor diversity and movement. Accordingly, creating an IT modernization roadmap that addresses cross-cloud data visibility, flexible workload movement, and integrated management will be a key success factor for healthcare IT departments.

As noted, containerization aids in application migration and mobility, and deployments are well underway among healthcare ECI respondents. In addition, unified, cloud-agnostic management tools that operate consistently regardless of where data and applications run and AI-driven operational automation will ease the impact of workload movement while helping healthcare IT shops avoid risk, resource overprovisioning, and redundant operations.

Editor’s note: See the full 2024 ECI Report on Healthcare IT and learn how Nutanix software helps healthcare organizations modernize their IT operations. 

Joanie Wexler is a contributing writer and editor with more than 30 years of experience covering the business implications of IT and computer networking technologies.

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