On-Premises and Hosted Cloud Solutions for Healthcare and Financial Services

2 min read

Irwin Lazar | May 10, 2023

Metrigy’s Workplace Collaboration: 2023-24 global study of 440 organizations find substantial deployment of on-premises and hosted unified communications platforms within financial services and healthcare industry participants. Nearly a third (32.3%) of financial services firms are deployed on-premises compared to 37.5% of healthcare organizations. An additional 22.6% of financial services firms use single-tenant private hosted cloud solutions, as do 12.5% in the healthcare vertical.

Among these participants, we find that on-premises adoption is highest in the EU, particularly within France, Germany, and the UK, compared to the US and Canada. And just 9.1% of financial services and healthcare industry participants plan to move to multi-tenant Unified Communications-as-a-Service (UCaaS) in 2023.

Why Healthcare and Financial Services Stay On-Prem or Hosted

Healthcare and financial services participants cite the following reasons for staying with an on-prem or private hosted cloud.

Cost Savings with Private Hosted Cloud Platforms & On-Premises Platforms

Nearly 78% overall, including 83.3% for healthcare and 66.7% for financial services, say that lower operating costs for on-premises and private hosted platforms are a driver for staying with their current architecture. For these institutions and organizations, the cost of maintenance, support, and service contracts is less than that of moving to a UCaaS per-seat subscription model, especially when existing platforms are fully paid for and depreciated.

Platform Flexibility

Companies wishing to move to an opex cost model via subscription pricing may do so while retaining on-premises or private-hosted platforms. More importantly, they can continue to support existing hardware, including phones, analog devices, and gateway infrastructure, without the additional investment cost often required when moving to UCaaS.

Features, Customizations, and Integrations

Those with on-premises or private platforms often have enabled extensive customizations and integrations into other business applications. For example, a financial services firm may integrate its calling and conferencing platform with customer relationship management and trading apps. On the healthcare side, institutions and organizations may implement extensive integrations between patient management applications, physician scheduling, and even hospital room entertainment systems that are impossible or extremely difficult (and costly) to implement in a UCaaS environment.

Data Privacy and Residency Are Critical in the Healthcare and Financial Sectors

Financial services and healthcare organizations operate in highly regulated environments requiring strict data access controls to protect customer privacy and meet regulatory requirements worldwide. In Europe, this may require data to be stored and managed according to GDPR within the country of source. In contrast, in the US, regulations such as HIPAA in the healthcare space or FINRA in the financial services space govern data control and protection. Storing data in a public cloud environment without location control or end-to-end encryption is unacceptable.

On-Premise Platforms Offer Specialized Security Features

Financial services and healthcare organizations have unique security requirements. A data breach can lead to potential harm not just to the organization but to customers, patients, and partners in terms of exposure of financial information or healthcare histories. To ensure data security, especially in zero trust environments, financial services and healthcare organizations may wish to maintain control over their data rather than have it reside on a public cloud service platform.

Platform Reliability

Those operating their infrastructure, either on-premises or hosted in a private cloud environment within the healthcare and financial industries, can control various factors, including resiliency, available bandwidth, and server resources, to ensure that applications always have the network bandwidth and computing power required to avoid an outage. Those using public cloud UCaaS are only guaranteed the reliability that the provider authorizes, typically 99.99% (equating to 52.56 minutes of unscheduled downtime per year) or 99.999% (5.26 minutes). Financial services and healthcare providers may require zero downtime with low-latency information delivery, especially for those supporting trading or hospital management platforms.

In addition, operating in its infrastructure allows the customer to deploy survivability servers on-site to secure operability for financial services and healthcare providers to run their operation even if the internet or mobile infrastructure loses connection.

Healthcare and Financial Services Top Adoption Drivers

The following chart summarizes the primary adoption drivers for on-premises and private-hosted platforms for healthcare and financial services institutions and organizations.

Mitel May23 Blog image

For those operating in the financial services or healthcare industries, on-premises and private hosted unified communications platforms may offer significant advantages and the ability to meet regulatory requirements that UCaaS can’t match. Consider your operating environment and in-country regulations as you evaluate your go-forward strategy.

ABOUT METRIGY: Metrigy is an innovative research firm focusing on the rapidly changing areas of Unified Communications & Collaboration (UCC), digital workplace, digital transformation, and Customer Experience (CX)/contact center—along with several related technologies. Metrigy delivers strategic guidance and informative content, backed by primary research metrics and analysis, for technology providers and enterprise organizations.

Irwin LazarPresident and Principal Analyst, Metrigy

Irwin is a leader in research and consulting, focused on unified communications and collaboration, digital workplace, mobility, contact center, and customer engagement. He writes regularly for NoJitter.com and SearchUnifiedCommunications.TechTarget.com and is a frequent speaker at industry trade events. Follow Irwin on Twitter and LinkedIn.

Ready to talk to sales? Contact us.