12 Benefits of Cloud Computing in Healthcare

The global market for cloud computing in healthcare is expected to triple in size over the next decade, from approximately $70 billion in 2024 to more than $210 billion in 2033. Healthcare organizations are adopting cloud computing services to alleviate the cost and complexity of managing onsite technology infrastructure and to support their digital transformation efforts by migrating previously siloed data and applications to an integrated cloud environment.

Those are the big-picture benefits of cloud computing in healthcare, but there are many others. With cloud computing, healthcare organizations can more easily scale and secure their technology infrastructure. They can create reliable backups that ensure business continuity in the event of cyberattacks or natural disasters. Plus, using modern infrastructure makes it easier for them to adopt increasingly powerful technologies, such as advanced analytics and workflow automation.

What Is Cloud Computing?

In cloud computing, a business subscribes to computing services that are hosted by a technology vendor and delivered on demand over the internet. Companies usually pay a usage-based subscription fee for these services, which can range from data storage to data analysis to industry-specific operational software. Services can be deployed to a public cloud, which is accessible over the public internet; a private cloud, which is available only inside an organization’s private network; a hybrid cloud, which combines a private cloud with one or more public clouds; or a multicloud, which uses multiple public and private cloud resources.

What Is Cloud Computing in Healthcare?

Cloud computing in healthcare is the use of remote servers, networks, and internet-based services to store, manage, and process medical data while improving efficiency, scalability, security, and collaboration. In addition, cloud-native automated workflows bring better efficiency to a wide range of lines of business. Examples include automating the ordering of supplies, in ways that support lower inventories, and automating the submission of insurance claims once a patient has left the hospital. Streamlining these processes, which have been mainly manual, and therefore error-prone, until now, allows healthcare workers to focus on higher-order tasks more closely tied to patient care.

Between 70% and 80% of U.S. hospitals and health systems have adopted cloud computing services. Interest in cloud computing in healthcare has increased in recent years as organizations have sought to reduce the cost and complexity of managing onsite IT resources, to make data accessible across the enterprise, and to improve data security and compliance.

Key Takeaways

• Healthcare organizations are moving to the cloud to help cut the cost and complexity of managing on-premises infrastructure.
• The flexibility of cloud services enables organizations to scale resources as necessary and to respond more proactively to market demand.
• Cloud service providers take regulatory compliance seriously, so health systems can keep data secure and preserve business continuity.
• Creating a single, organization-wide data store in the cloud allows healthcare organizations to advance digital transformation and embrace advanced analytics.

12 Benefits of Healthcare Cloud Computing in 2025

Healthcare organizations adopt cloud computing for many reasons. Some simply seek to reduce the footprint of their on-premises technology infrastructure. Others want a cost-effective way to store and analyze ever-growing volumes of patient data, since hospitals generate data volumes measured in petabytes per year—and that annual output has been increasing by about one-third every year. Many also look to modern cloud infrastructure to help the organization leverage artificial intelligence (AI), embrace workflow automation, or improve application and data security.

Here are 12 important benefits of cloud computing for healthcare organizations embracing digital transformation in 2025 and beyond.

1. Cost-Effective Data Management

Keeping data in the on-premises legacy applications that generated it requires that a user or application be physically present in the facility to access or otherwise use that data. It also means organizations need to provide specialized training both to IT staff to maintain these systems and to end users to extract data from them. This significantly limits data’s usefulness—and helps explain why the vast majority of the data generated by a hospital goes unused.

One of cloud computing’s key advantages is offering healthcare organizations a single environment for storing data. That means any identity with a network connection and authenticated credentials (be it a human user, a medical device, or a software application) can access and use the data. This significantly reduces the cost of health data management and storage, as data is now in a single location and not spread throughout dozens of disparate applications. Additionally, cloud computing decreases the cost of sharing data, as the heavy lifting of extracting data from legacy systems is no longer necessary.

2. Increased Scalability and Agility

All too often, healthcare organizations pursuing a digital transformation strategy can go only so far with on-premises infrastructure. They may run out of physical space in their data center, staff to maintain and update servers, or capital budget to acquire more infrastructure. In other words, there are limitations to what hospitals and health systems can do with self-hosted data and applications.

On the other hand, the cloud’s subscription-based service models give organizations the option to scale their infrastructures up or down as needed, without having to buy new hardware. By setting up servers on demand, organizations can implement new technology quickly, whether it’s a modernized cloud-based electronic health records (EHR) system, a new predictive modeling application, or a pilot project for chronic care management. Scalability also lends itself to agility, as IT teams can set up these new applications in a matter of days. This lets IT respond quickly to unpredictable shifts in demand—such as when the need arose suddenly in the early days of the COVID-19 pandemic to set up virtual-visit or remote-monitoring technology.

3. Improved Data Access

As noted earlier, the cloud provides healthcare organizations with a single, integrated location for storing data. When data is no longer limited to on-premises silos, it is much more accessible to authenticated users, devices, and applications that have been granted privileges to use it.

There are several benefits to improved data access for healthcare organizations. One is that greater access to data can promote data-driven decision-making. Staff across a range of business lines have an enterprisewide view of financial or operational performance, while clinical staff can see a patient’s full medical record, including medical appointments that took place at other facilities. Access to a single data warehouse also enables greater business intelligence and predictive analytics; algorithms and other models can be trained on larger datasets, improving their accuracy and effectiveness.

4. Advanced Security Measures

Hospitals and health systems are especially prone to cyberattacks, as they possess protected health information (PHI), financial information, and intellectual property, such as medical research. Organizations face the threat of stiff financial penalties if patient records fall into the wrong hands. Additionally, ransomware attacks that leave EHR systems or medical devices inaccessible to clinical staff can jeopardize patient care and harm a health system’s reputation.

Transitioning to hosted cloud services positions organizations to improve healthcare data security. Cloud service providers (CSPs) typically offer a range of native security features out of the box, from physically securing infrastructure to patching and configuring software to implementing role-based access controls. CSPs also commonly offer automated threat monitoring and response, helping them (and their customers) stay ahead of attackers. Many of these features are above and beyond what a hospital or health system could provide on premises, owing to both the resources and expertise available from CSPs serving enterprise customers around the world.

5. Regulatory Compliance

Regulations, such as the U.S. Health Insurance Portability and Accountability Act (HIPAA) and the European Union’s General Data Protection Regulation (GDPR), exist in large part to ensure that individuals’ data remains protected when corporate entities store it. As a result, any CSPs that work with healthcare organizations are subject to strict requirements under the HIPAA Security Rule and Privacy Rule, as well as the GDPR.

As with security, CSPs can handle compliance in healthcare at greater scale and lower cost than individual hospitals or health systems. For example, they can provide inexpensive, secure, long-term storage for imaging data, which HIPAA requires organizations to retain for several years. CSPs also provide audit logs, a critical compliance feature for ensuring that only authorized users or machines are accessing PHI. Finally, features such as multifactor authentication and data encryption, though not explicitly required under HIPAA, are common best practices among CSPs because they help maintain regulatory compliance by restricting access to patient data.

6. Ownership of Patient Data

When medical records are stored in siloed, on-premises systems, it is very difficult for patients to access them. Some data may be made available through a patient portal, but most data is available only if patients manually request it. Even then, physical copies of records are all too commonplace, whether as actual paper documents or as read-only files saved to a CD. These types of records are difficult to read and interpret.

Migrating EHR systems and other clinical applications to the cloud makes it possible for hospitals and health systems to democratize patient data. Patients with appropriate privileges can access their records directly, without needing to visit the healthcare facility. What’s more, the cloud-based database includes a patient’s entire record, encompassing all clinical systems, not just an individual EHR or imaging system. Meanwhile, healthcare organizations can further empower patients to use their data by offering education, engagement, and condition management tools that leverage this unified dataset. This lets patients participate more actively in healthcare decision-making.

7. Reliable Data Backup and Recovery

HIPAA requires organizations to provide multiple backups of applications that generate and process patient data. Local copies can be costly to maintain, and offsite backups are essential in case local backups become unavailable due to natural disaster or cyberattack and cannot be restored. Backups are also helpful anytime an organization goes through a software update, as this ensures that EHRs and other critical systems will remain online.

When it comes to data backup and recovery, the value proposition for the cloud is clear. Backups can be spread across multiple cloud regions, allowing for recovery in near-real time, no matter the local time of day. Organizations can also run backups automatically, which cuts down on reliance on IT staff to perform manual tasks (often at odd hours). Backups running in the cloud also benefit from the same security protections as primary applications, such as access controls, data encryption, physical security, and endpoint protection.

8. Workflow Automation

Healthcare delivery is no stranger to complex workflows for handling care coordination, scheduling, staffing, billing, and budgeting, among other processes. Manual workflows are error-prone and time-consuming, but they are common when clinical and business applications remain in silos and data cannot be shared among them.

Aggregating and normalizing a single data store in the cloud can set the stage for healthcare workflow automation, as applications can now easily share data that previously had to be manually reentered from one system to another. Data sharing makes it possible to create workflows for multistep processes, such as submitting insurance claims, creating audit logs, or communicating with patients. Automation improves efficiency, minimizes errors, and lowers costs, all while enabling workers to shift their focus to more strategic tasks that lead to business improvement.

9. Increased Speed

Procuring, purchasing, and provisioning on-premises infrastructure can take hospitals and health systems many months. That makes it hard to deploy applications quickly in response to market needs, whether it’s a telehealth service or a clinical trial. On-premises architecture also lends itself to monolithic, standalone systems that are difficult to reuse in another part of the business. Cloud-based infrastructure, on the other hand, can be provisioned quickly, and resources can be replicated without as much need for custom development.

One of the other benefits of cloud computing in healthcare is computing speed. For example, transitioning workloads from legacy physical servers to state-of-the-art cloud infrastructure enabled one health system to reduce the time needed to run data queries from 15-20 minutes to 15-20 seconds. That has made it possible for clinicians to perform advanced analytics within the EHR, while a patient is being examined, and gain access to highly personalized recommendations for treatment plans.

10. Innovative Health Informatics and Analytics

Healthcare is a data-driven industry. As discussed above, the amount of data continues to grow as hospitals and health systems use more digital technology to monitor and manage patients. But this data is likely to be less useful if it sits in siloed systems or is stored in multiple formats.

In addition to providing inexpensive offsite storage for that data, CSPs typically offer services, such as extract, transform, and load (ETL), and data integration. ETL converts raw, heterogeneous data into a single, consistent format, while integration brings together data from multiple sources. This has significant implications for informatics and analytics. Applications that perform a range of clinical, financial, operational, and research analysis tasks have access to a single, unified data store. Add that to the increased computing power available from cloud services, and organizations can perform far more powerful analyses than were possible with on-premises infrastructure and siloed data sources. Organizations can predict the spread of infectious disease, closely monitor the cost and quality of care delivery, and provide highly personalized treatment recommendations to patients.

11. Support for Advanced Technologies

Cloud services generate cost savings for healthcare organizations while, at the same time, providing them with modern and scalable architecture. This powerful combination helps hospitals and health systems take advantage of advanced technologies that are difficult to support with on-premises infrastructure.

Artificial intelligence (AI) in healthcare is a key example. Organizations can leverage AI to solve business problems, such as how to reduce spending on preventable episodes of care, or make clinical discoveries, such as earlier detection of cancer or Alzheimer’s disease. Health systems can also expand their use of telehealth, both by supporting real-time remote consultations and by ingesting data from remote-monitoring devices. These types of initiatives can expand access to care, especially in rural or traditionally underserved areas. Cloud services can also accelerate vaccine development and other types of scientific research that have traditionally required the use of supercomputers.

12. Sustainable Practices

A recent survey of healthcare leaders found sustainability to be one of the top challenges facing their IT departments. Powering onsite data storage and analysis takes considerable energy, especially for resource-intensive file types, such as radiology images. To that end, in October 2022, the World Economic Forum recommended healthcare organizations shift to cloud-based services as part of a larger initiative to adopt “as a service” models and other digital technologies.

Research from Accenture has shown that organizations can improve energy efficiency more than threefold by transitioning computing workloads from onsite infrastructure to cloud resources. The scale of operating resources shared by many cloud customers is part of what makes this possible. Another factor is a CSP’s ability to monitor metrics, such as average carbon emissions in various cloud regions or average resource utilization for cloud-based workloads, and to identify and right-size resources that are idle or overprovisioned.

Explore Cloud Solutions for Cost Savings, Scalability, and More

While there are many benefits of cloud computing in healthcare, organizations must also be mindful of the salient challenges. Migrating data and applications and configuring cloud deployments can be serious undertakings, especially if hospitals and health systems opt to lift and shift workloads to the cloud directly from on-premises infrastructure. In addition, adopting cloud services in an ad hoc manner can lead to a lack of standardization, making it difficult to create best practices for data access, security, and integration.

Given these challenges, organizations are at an advantage when they work with a trusted partner experienced in managing the complexities of cloud deployments in healthcare. NetSuite’s healthcare-specific enterprise resource planning (ERP) system is a cloud-based business management suite that helps organizations gain visibility into data across the enterprise, and it adapts automated workflows to the industry’s unique business processes and regulatory requirements. NetSuite’s ERP can support a range of healthcare business functions, from financial and business management to customer relationship management, and has been independently audited and attested to comply with industry standards.

Hospitals and health systems benefit from transitioning data and applications to the cloud in a few important ways. They can reduce the cost of maintaining and powering on-premises infrastructure and gain the agility to scale computing resources when they need them. They can also advance their digital transformation efforts by applying the latest advances in AI and workflow automation to cloud-based, unified datasets. Finally, they can create reliable data backups that help ensure business continuity as well as regulatory compliance—and maintain the organization’s focus on providing high-quality patient care.

Benefits of Cloud Computing in Healthcare FAQs

How does cloud computing benefit the healthcare industry?

Cloud computing allows hospitals, health systems, and clinics to move software applications and data storage offsite. With less technology infrastructure onsite, organizations can cut expenses, reduce their carbon footprint, and shift IT resources to strategic priorities. Additionally, organizations can take advantage of cloud-native technology powered by artificial intelligence, such as predictive analytics and workflow automation.

How is cloud computing used in healthcare?

Hospitals and health systems use cloud services to aggregate and manage data and applications across the enterprise. This makes data more accessible to authorized users, medical devices, and applications, which in turn makes it easier for organizations to adopt a strategy of data-driven decision-making and to better leverage data for predictive analytics, financial forecasting, and long-term planning.

What are the four benefits of cloud computing?

The four main benefits of cloud computing in healthcare are the ability to scale resources on demand, reduce the cost and complexity of on-premises technology infrastructure, improve cybersecurity and compliance by benefiting from the expertise of a cloud service provider, and support artificial intelligence, workflow automation, and other advanced technologies.

What are the challenges of cloud computing in healthcare?

Some of the challenges of cloud computing in healthcare include migrating legacy applications onto state-of-the-art cloud infrastructure, configuring how cloud architecture is deployed, and ensuring that cloud services are adopted in a standardized manner. Finally, organizations may see the cost of cloud services rise significantly if the amount of data stored or computing workloads used increases without warning.