Health information-technology giant Cerner is making Amazon Web Services its preferred cloud provider, a huge victory for Amazon as it competes with Google Cloud and Microsoft to sign on healthcare providers.
Cerner provides software that’s critical to the operations of hospitals and is used for managing patients, billing and other services. It also plans to work with AWS on projects related to health IT using Amazon’s machine learning tools, the companies said in a release Tuesday.
Cerner is one of a handful of companies that dominate the market for the electronic health records software used by major hospital systems. According to a May report cited by Healthcare Dive, Cerner controls about 27% of the hospital EHR market.
When it came to picking a cloud partner, Cerner Chief Operating Officer Mike Nill said that the capabilities of top cloud providers like Amazon, Google, and Microsoft are getting closer to one another, making it less of a differentiation when looking for a cloud partner.
“For us, the larger influencer was the innovation angle that we saw with AWS and Amazon,” Nill told Business Insider.
In particular, Nill cited the ability to collaborate with Amazon in addition to AWS — using the company’s consumer and supply chain expertise — to build tools together that the two organizations could then sell to other healthcare companies. He also said AWS was willing to move Cerner onto the cloud faster.
From paper to digital to the cloud
Cerner has been moving more of its services to data centers that it operates and then to the cloud. Right now, about 80% of Cerner’s clients host their information out of Cerner data centers. As Cerner transitions to the cloud, that information will come along for the ride. Working with AWS, Nill said, will help make that migration go faster.
Moving to the cloud is a big change for the healthcare industry, which only recently transition from paper to digital and is notorious for its reliance on fax machines. The next phase of that, Nill said, will be to get it on the cloud, where it’s easier to use machine learning and artificial intelligence to analyze that data and ideally build new tools that make doctors’ jobs easier and keep patients healthier.
A brewing cloud wars
Cloud companies are in a fierce competition for the healthcare market. According to Business Insider Intelligence, healthcare companies are projected to spend $11.4 billion on cloud computing in 2019. Amazon as of 2017 had about 46% of the cloud infrastructure market, while Microsoft had about 11%.
This isn’t the first time Amazon has leveraged its own AI component in partnerships with healthcare companies. In 2018, Amazon announced it would be offering a new service called Amazon Comprehend Medical to hospitals, insurers, and pharmaceutical companies with the hope of helping them analyze their health-record data.
The service will comb through unstructured medical texts from records and pull out information like diagnoses, symptoms, and treatments. Organizations like the Fred Hutchinson Cancer Research Center in Seattle have been working with Amazon’s Comprehend Medical.
While Amazon may be winning on market share, companies like Microsoft have been inking big deals as well. As part of a January deal, Microsoft became Walgreens’ cloud partner. Prior to that, Microsoft struck up alliances with Walmart and Kroger, both of which operate pharmacies.
It’s also inked deals with a major health system, bringing on Providence St. Joseph Health, a West-Coast-based health system that operates 51 hospitals and made $24 billion in 2018.