Managed Hoster Logicworks Surfing the Sea Change In Healthcare IT update from February 2014

Managed hosting provider Logicworks sees a massive opportunity in healthcare. The company was founded way back in 1993, but has been embracing cloud over the last seven or eight years as the technology hit the limelight. The bulk of its business is managing private clouds for customers running big, complex web-facing applications.

The company has a focus on security and regulatory compliance, so it tends to attract a lot of healthcare and legal customers. The healthcare vertical is its biggest market in terms of overall revenue. National initiatives focused on advancing healthcare technology have furthered boosted the opportunity.

“We’re really focused on the US healthcare market,” said Jason Deck, VP of Strategic Development at Logicworks, who cited several reasons the healthcare market is a great opportunity.

"Digitizing records is an easy thing to say but a complex thing to do," said Deck. "It’s a Sea Change kind of a problem, and a challenge across all levels of their organization and operations. This is coupled with the government releasing an awful lot of money to make this happen. How do you deal with compliance and regulatory shifts? Being able to hold those conversations separates us from larger competitors. If you’re rolling out an electronic records application, lets first understand the application and we will design and build the infrastructure around your specific needs."

Logicworks customers include 20 different US state Health Information Exchanges (HIE). “We manage the whole kit and caboodle,” said Deck. ”We manage the entire infrastructure, all mission critical up to the application. We don’t manage the software, but we do everything else."

There is a big push to digitize healthcare records and establish health information exchanges. The current administration has been aggressive in moving healthcare forward into the age of technology (Obamacare web page launches aside) and Logicworks is in a unique position to capitalize on these sizable needs.

While it sees the healthcare market heating up big time, the company also notes more customers are inquiring about managed Amazon Web Services. “Cloud is really just a tool we use to deliver value to our client,” said Deck. “We’re not a cloud provider, we deliver compliant infrastructure.”

Customers Growing Comfortable with Public Cloud

Most of Logicworks' customers are businesses focused on security and compliance focused businesses - the types you wouldn't expect to embrace public cloud. However, the company notes that more and more customers are inquiring about managed Amazon Web Services.

Logicworks  currently hosts infrastructure within data centers operated by Equinix (New York and Silicon Valley) and Digital Realty (Piscataway, N.J.). “We look at a provider that gives the ability for us to advance,” said Deck. “We look for people with critical mass around the world.  We look for network density, physical security, and the  attributes of tier III data center and up.”

While it will continue to grow within its existing data centers, a sizable chunk of Logicworks' new business is being sent over to AWS. Given its compliance focus, it suggests a larger trend of companies growing comfortable with public cloud.

“This is an emerging part of our business,” said Deck. “The underlying infrastructure itself and the ownership of it is less and less valuable. So we’re finding that, while the majority is still hosted private cloud, we’ve embraced AWS as a partner. If we can deliver via AWS, we will. A lot of service providers look at them as the arch nemesis, we see them as a partner.”

Deck uses an analogy to describe AWS. “They’ve built an F-16 fighter jet, but it isn’t assembled,” said Deck. “What we do isn’t running Exchange on AWS. We can, but people call about mission critical applications. We write our own code to automate on an application specific basis.”

So in this scenario, the curiosity about the cloud is helping Logicworks, a traditional managed hoster finding itself evolving with customer needs. It’s given birth to enterprise class managed AWS services.

"Customers are coming to us with an appetite to understand whether Amazon is a fit to them, but there’s a still a lot of figuring out," said Deck. "We do not have a preference. Our preference is to do what’s right for the application. We don’t stir one way or another. Sometimes it makes sense to do both."

The company predicts a very healthy mix of traditional, managed private cloud on dedicated infrastructure as well as growth of public cloud usage. “Our prediction and our forecast on the market is that there is today, and for the foreseeable future, a need for hosting private cloud infrastructure," said Deck. "The next round, which is a bit down the road, is around AWS Direct Connect."