Myriad Factors Making On-Prem Less Sustainable; Cloud the Clear Path, but Execution Requires Preparation and Expertise

Health system technology leaders are increasingly confronting a stark reality: legacy on-premises data centers, long considered reliable pillars of IT infrastructure, are reaching the end of their lifecycle. As the costs of virtualization technologies such as VMware and Citrix climb, many CIOs and CTOs are weighing the benefits of transitioning core workloads to the cloud.

Tim Calahan, CTO at Michigan Medicine, is among those leading the charge toward cloud adoption. “Traditional data centers have been trusted companions for 20 to 30 years, but the technologies fueling them are aging, and licensing costs are escalating,” Calahan said. “The question is no longer if we move to the cloud, but how.”

Calahan noted that at a recent conference he attended, CIOs and CTOs voiced concerns over rising expenses associated with virtualization tools. “Citrix costs are doubling with every renewal, and now VMware is following suit,” Calahan said. “Organizations are searching for viable alternatives.”

For Michigan Medicine, moving to the cloud is more than a financial decision. “When we conducted a total cost of ownership (TCO) analysis, we found that transitioning to the cloud was cost-equivalent to remaining on-premises,” he said. “But the cloud offers advantages beyond cost—enhanced security, resilience, and access to next-generation tools.”

Despite the perceived benefits, not all health systems are ready to make the leap. “There’s a lack of a prescribed path forward,” Calahan noted. “Healthcare IT has long relied on standardized infrastructure, but as costs rise, organizations are being forced to reevaluate their strategies. Some are even considering reverting to physical servers or exploring open-source alternatives.”



The reluctance to embrace the cloud stems largely from uncertainty. “For organizations unfamiliar with cloud migration, there’s a natural trepidation,” Calahan said. “They question whether performance will match what they’ve achieved in their own data centers.”

Another key challenge is expertise. While major consulting firms specialize in either cloud computing or EHR deployment, a smaller number possess the combined knowledge needed to seamlessly migrate Epic environments to the cloud. To fill this gap, Calahan also serves as CEO of EHC Consulting, a firm offering services around assisting healthcare organizations with cloud transitions. “We’ve been doing this for a decade,” Calahan said. “We know how to move Epic to the public cloud.”

Michigan Medicine itself has spent significant time preparing for its transition. “We dedicated a year to ensure our landing zones, wide-area networks, and security structures were properly configured,” Calahan said. “Without these foundations in place, a cloud migration can quickly become a challenge.”

The Role of Hybrid Cloud Models and Cloud Selection Strategies

For many health systems, a full-scale cloud migration isn’t immediately feasible. “We plan to move about 85% of our 900 applications to the cloud, but some workloads—such as voice-over-IP telephony and radiation oncology systems—require low-latency environments,” Calahan explained. “These will remain in a cloud-adjacent private data center.”

Latency-sensitive workloads, such as call center applications and certain imaging systems, often require high-speed, real-time data exchange that may not be optimized in a cloud-based environment. “These applications need to function flawlessly, so we’re keeping them close,” he said. “But over time, vendors are adapting their solutions to be more cloud-friendly.”

Other organizations are testing the waters by leveraging the cloud for disaster recovery. “This approach allows IT leaders to establish clo...