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Report: IT-as-a-Service Models to Net $11B in Savings Over Next Three Years

June 25, 2013
by Rajiv Leventhal
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According to a new report, healthcare providers could reduce IT costs by 9 percent, which translates into $11 billion in IT savings over the next three years if they deploy IT-as-a-Service (ITaaS) models, where the IT organization of an enterprise is run much like business, acting and operating as an internal service provider.

The report, from MeriTalk, an Alexandria, Va.-based online community for government and healthcare IT issues, and EMC Corporation, a provider of IT storage hardware solutions, based in Hopkinton, Mass. was based on a survey of 109 College of Healthcare Information Management Executives (CHIME) members,

The report found that 90 percent of healthcare IT executives believe IT innovation is key to their organization’s success – and estimate that 47 percent of their current portfolio has the potential to be delivered via ITaaS – leveraging private, hybrid, and public clouds in the future.

While health IT executives are focused on innovation and efficiency, just 22 percent say their current IT infrastructure significantly enables their organization’s ability to innovate. To gain more efficiencies and help drive down IT costs, 99 percent of the healthcare providers surveyed are taking steps to transform their IT infrastructure. To help achieve these goals:

  • 87 percent are deploying virtualization
  • 73 percent are streamlining IT operations
  • 48 percent are centralizing IT management

To move towards organizational objectives, providers are considering new agile IT models to transform their IT and deliver new IT services. Overall, respondents report that 15 percent of their total IT portfolio is delivered via an ITaaS model today. Further, 94 percent of respondents report that they have purchased at least part of their IT portfolio “as a service.” Specifically:

  • 87 percent have purchased software or applications as a service, such as virtualization
  • 22 percent have purchased platforms or complete environments, which can help increase the use of private and hybrid clouds
  • 18 percent have purchased infrastructure-as-a-service
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