Cloud hospital software vs on-premise: cost, backups, security

Cloud hospital software runs on servers in a data centre and is used over the internet; on-premise software runs on a server inside the hospital. For most small and mid-size hospitals, cloud wins on cost, backups and security, and loses only where the internet connection is unreliable and cannot be backed up. This article compares the two on the four things that decide it: cost, backups, downtime and security.

The question comes up in almost every conversation with a hospital that is replacing an old system, usually because the old system lives on a computer under the reception desk and nobody knows when it was last backed up. The answer is not the same for every hospital, but the way to reach it is.

What does each option cost?

Add the rows together for five years, not one. On-premise looks cheaper in year one because the server is treated as a purchase and the staff time is not counted. By year three the sums usually reverse. Our own prices are published on the Healthixio page so that you can do this arithmetic without a sales call.

How do backups differ?

A backup exists only if it has been restored at least once. That is the test, and it is where on-premise systems usually fail: the drive is full, the routine stopped in 2023, or the backup sits next to the server that just failed.

• Cloud: backups are taken automatically, stored separately from the live server, and restore tests are the vendor's routine. Ask for the backup frequency, the retention period and the date of the last restore test, in writing.
• On-premise: you own the routine. A daily backup to a drive that leaves the building, a weekly check that the file opens, and a yearly restore onto a different machine. Most hospitals do the first and neither of the others.
• Either way, ask for a copy of your own data in an open format on request. It is your data, and the ability to take it away is the best test of a vendor's confidence.

What causes downtime in each?

Both options go down. They go down for different reasons.

• On-premise: the server's disk, power supply or operating system fails; a virus arrives on a pen drive; the person who knows the password has left. Recovery takes as long as it takes to find someone who can fix it.
• Cloud: the hospital's internet fails, or the vendor's data centre has an incident. The first is far more common and is cheap to prevent with a second connection from a different provider or a 4G or 5G router that takes over automatically.
• Ask a cloud vendor for its uptime history and how it tells customers about incidents. Ask an on-premise vendor who you call at 2 am.
• Whichever you choose, the front desk needs a paper fallback for an hour: a register for registrations and a receipt book, entered into the system afterwards.

Which is more secure?

Security is not about where the server is. It is about who can reach it, whether every action is logged, and whether anyone would notice a breach. On that measure a well-run cloud system is usually ahead of a server under a desk, because the vendor does the work once for every hospital. Two Indian requirements make this concrete.

• The CERT-In directions of 28 April 2022 require organisations to keep logs of their ICT systems for a rolling period of 180 days within India and to report cyber incidents to CERT-In within 6 hours of noticing them. The text is on the CERT-In site. A cloud vendor with central logging meets the first part for you; an on-premise server rarely does.
• The DPDP Act 2023 makes the hospital responsible for reasonable security safeguards and for notifying a breach. Role-based access, login logs and audit trails are how you show that you had the safeguards. We cover the rest in the DPDP compliance checklist for hospitals.

Ask any vendor, cloud or on-premise, for a VAPT report from a CERT-In empanelled auditor, a statement that patient data is stored in India, and a demonstration of the audit trail. Healthixio has all three, with data stored in India and a VAPT by a CERT-In empanelled auditor.

When is on-premise still the right choice?

• The hospital is somewhere with no reliable internet and no mobile coverage to fall back on.
• A regulator or a parent organisation requires it in writing.
• The hospital already has an IT team and a server room that meet the CERT-In and DPDP requirements above.

For everyone else, a cloud HMIS with a second internet connection is the cheaper and safer option, and the money saved on the server pays for the connection several times over.

Frequently asked questions

What happens to our data if the cloud vendor shuts down?

Get the answer in the contract before you sign: the export format, how quickly you get it, and for how long after termination. A vendor that stores data in an open, documented structure and gives you a full export on request has answered the question. A vendor that cannot describe the export has told you something too.

Is patient data in the cloud stored in India?

It should be, and you should ask for it in writing. Healthixio stores patient data in India. Beyond the legal questions, an Indian data centre keeps latency low for a hospital's constant small requests. Ask where the backups are kept as well, because a backup in a foreign region is data outside India.

Do we still need antivirus and passwords with a cloud system?

Yes. The server is the vendor's job; the computers at your desks are yours. Keep them updated, keep antivirus on, give every user their own login, and switch off accounts the day someone leaves. Role-based access and login logs in the HMIS are only useful if nobody shares a password, so make that a rule on day one.