How Hospital Technology Maturity Shapes Cloud and On-Premises IT Infrastructure Investments
Hospital technology infrastructure is becoming increasingly complex as healthcare organizations adopt more digital applications, connected medical devices, data platforms and technology-driven clinical services. Hospitals now depend on a wide range of systems to support patient care, administrative operations, financial management, clinical documentation, diagnostics and communication. As these technology requirements continue to expand, healthcare IT leaders face important decisions about how to deploy, maintain and scale their infrastructure.
One of the most significant decisions involves choosing between cloud-based and on-premises technology environments. However, the decision is rarely a straightforward choice between one model and the other. Instead, hospitals must evaluate which infrastructure approach best supports their current operational requirements, financial resources, security responsibilities and long-term technology strategies.
Applications directly involved in patient care may have different infrastructure requirements from back-office systems. For example, a clinical application supporting real-time monitoring may require extremely low latency and continuous availability. An administrative application used for reporting or workforce management may be better suited to a cloud-based environment. Similarly, systems that store large volumes of medical imaging data may require a combination of local processing capabilities and scalable cloud storage.
Hospital IT teams must therefore consider several factors when making infrastructure investments. These include the clinical importance of individual workloads, availability and recovery requirements, network latency, total cost of ownership, cybersecurity exposure, regulatory compliance and the organization’s internal technical capabilities.
For many hospitals, the most practical solution is a hybrid infrastructure strategy. Under this approach, cloud platforms, on-premises servers and edge computing resources operate together, with each environment supporting the workloads for which it is best suited.
The findings of the 2026 Connected Hospital Report provide insight into how hospitals are approaching these decisions and how infrastructure investment patterns differ according to technological maturity.
Understanding the Relationship Between Hospital Technology Maturity and Infrastructure Investment
The 2026 Connected Hospital Report, developed by Baxter, evaluates the technological maturity of acute care facilities and organizes hospitals into four categories: early, developing, advancing and leading.
This maturity framework offers healthcare organizations a way to assess their current technology capabilities, understand their position relative to other hospitals and identify areas where additional investment may be necessary.
The research indicates that cloud infrastructure is becoming an increasingly important part of hospital technology strategies. Two out of three hospitals surveyed reported that they are increasing their investments in cloud servers compared with the previous year.
However, the level of investment varies considerably across the four maturity categories.
Among early-maturity hospitals, 41% reported increasing cloud-server investments. This figure rises to 67% among developing hospitals and 75% among advancing hospitals. Leading hospitals demonstrate the strongest adoption trend, with 93% reporting increased investment in cloud servers.
These findings suggest that cloud adoption becomes more prominent as hospitals develop stronger technology capabilities and expand their digital operations.
The results also demonstrate that infrastructure investment is not simply about replacing existing servers with cloud services. Hospitals at different stages of maturity have different priorities, and their investment decisions reflect their operational needs, financial resources and ability to manage more sophisticated technology environments.
Early-Maturity Hospitals: Strengthening Network Reliability and Cybersecurity
Early-maturity hospitals face a different set of infrastructure challenges from more technologically advanced healthcare organizations.
These facilities are still developing the foundational capabilities needed to support increasingly connected hospital operations. As a result, their infrastructure strategies often focus on network stability, cybersecurity, system reliability and the protection of existing technology investments.
The research found that early-maturity hospitals were nearly evenly divided in their investment plans for on-premises and cloud infrastructure. Approximately 49% of respondents reported increasing on-premises investments, while 41% said their organizations were increasing cloud-server investments.
This pattern indicates that early-maturity facilities are not necessarily rejecting cloud adoption. Instead, many are concentrating on ensuring that their existing technology environments can operate reliably before undertaking larger infrastructure transitions.
Financial limitations are an important part of this decision-making process. According to the report, 78% of early-maturity hospital participants identified budget constraints as the leading obstacle to achieving technology innovation.
Network reliability is another major concern. Approximately 90% of respondents in this maturity category rated network and bandwidth reliability as important factors influencing their overall technological maturity.
For hospitals operating with limited resources, infrastructure improvements must therefore address immediate operational risks while creating a foundation for future modernization.
Improving Network Stability and Redundancy
Reliable network connectivity is essential for hospitals that depend on electronic health records, clinical communication platforms, connected medical devices and other digital services.
A network interruption can affect access to important applications and disrupt communication between departments. Hospitals must therefore consider network resilience as a fundamental part of their technology investment strategy.
One recommended approach is to establish active-active dual internet service provider redundancy. This involves using two geographically diverse fiber entry points into the hospital facility, with traffic management supported by technologies such as Border Gateway Protocol or software-defined wide-area networking.
The objective is to reduce dependence on a single network connection and maintain connectivity when an individual carrier experiences an outage. Although no architecture can guarantee that every interruption will be eliminated, redundant connectivity can significantly improve network resilience.
Hospitals can also strengthen their core network architecture by deploying redundant core switches with high-availability configurations. Dual-controller switch stacks and high-availability firewall pairs can help reduce the risk of hardware-related service interruptions.
Another important consideration is traffic prioritization. Quality of Service policies can help hospitals prioritize clinically important network traffic, including voice communications, patient telemetry and electronic health record sessions.
Differentiated Services Code Point queueing policies can be used to assign appropriate priority levels to different types of traffic. Network segmentation through virtual local area networks can further separate clinical systems, corporate applications and guest access.
Together, these measures help hospitals build a more dependable network environment that can support future cloud adoption.
Establishing Stronger Cybersecurity and Data Protection
Cybersecurity is another major priority for early-maturity hospitals, particularly when limited financial and technical resources must be distributed across multiple infrastructure requirements.
Healthcare organizations manage sensitive patient information and operate systems that support essential clinical activities. Protecting these environments requires security controls that address unauthorized access, data exposure, ransomware and other technology-related threats.
Multi-factor authentication is an important starting point. Hospitals should establish MFA requirements, particularly for administrator accounts, privileged users and individuals accessing systems remotely. The U.S. Department of Health and Human Services and the Cybersecurity and Infrastructure Security Agency recommend MFA as an important safeguard for healthcare organizations.
Encryption is another essential component of data protection. Hospitals should apply strong encryption standards to information moving between systems and data stored on servers, databases and backup media. TLS 1.3 can be considered for supported data-transmission environments, while AES-256 encryption can protect stored information.
Identity governance and network access control also play an important role. Implementing 802.1X port-based Network Access Control can help organizations verify devices before allowing them to connect to hospital networks. Automated operating system patching schedules can further reduce exposure to known vulnerabilities.
Backup architecture is equally important. A 3-2-1 backup strategy involves maintaining three copies of important data, using two different types of storage media and keeping at least one copy offsite or in a separate cloud environment.
Hospitals can strengthen this approach through Write-Once-Read-Many storage immutability. Immutable backups help prevent attackers from modifying or deleting recovery data during ransomware incidents.
For early-maturity hospitals, these foundational investments can improve operational resilience while preparing the organization for more advanced infrastructure strategies.
Developing and Advancing Hospitals: Expanding Cloud Adoption and Modernizing IT
As hospitals move from early to developing and advancing levels of technological maturity, their infrastructure priorities begin to change.
The 2026 Connected Hospital Report found that 67% of developing hospitals and 75% of advancing hospitals reported increasing their cloud-server investments compared with 2025.
At the same time, investment in on-premises infrastructure follows a different direction. The percentage of developing hospitals reporting increased on-premises investment was 29%, declining to 15% among advancing hospitals.
Cloud infrastructure is also becoming an increasingly important part of the maturity framework. Approximately 85% of survey participants across these two maturity tiers reported that cloud-based servers were important to their technological maturity.
These findings indicate that developing and advancing hospitals are increasingly using cloud platforms to support modernization, improve application accessibility and expand their ability to manage healthcare information.
However, many hospitals in these categories continue to depend on older applications, databases and infrastructure components. Their modernization efforts therefore involve connecting established systems with newer cloud-hosted applications rather than replacing every legacy platform immediately.
Workflow automation is one example of this shift. The report found that 88% of developing hospitals and 95% of advancing hospitals identified workflow automation as a future innovation priority.
As organizations pursue automation, they must ensure that data can move reliably between electronic health records, clinical applications, administrative systems and other technology platforms.
This makes interoperability and enterprise integration particularly important.
Healthcare Middleware and Data Interoperability
Developing and advancing hospitals often operate hybrid environments in which cloud applications coexist with legacy on-premises servers.
Without appropriate integration capabilities, these environments can become fragmented. Applications may store information in different formats, use separate communication protocols or depend on complex interfaces that make information exchange difficult.
Healthcare middleware can help address these challenges by creating a structured connection between older infrastructure and modern digital applications.
One important requirement is support for established healthcare messaging and data standards. Hospitals should evaluate whether their interface engines and middleware platforms support HL7 version 2, HL7 version 3, Fast Healthcare Interoperability Resources and Digital Imaging and Communications in Medicine standards, as appropriate for their systems.
These standards support different types of healthcare information exchange. HL7 messaging is widely used in hospital system integration, FHIR supports modern healthcare data exchange through standardized resources and APIs, and DICOM is important for medical imaging information.
An API gateway or enterprise service bus can provide another layer of integration.
Hospitals can use centralized API gateways to connect older application databases with modern cloud-hosted services through RESTful interfaces. An enterprise service bus can help coordinate communication between different applications and support data transformation.
These integration layers can also provide traffic management, authentication and security enforcement. For example, hospitals can implement rate limiting and mutual Transport Layer Security to help protect communication between connected applications.
Event-driven data integration is another useful capability, particularly in hospitals that manage continuous information flows from connected medical devices.
Platforms such as Apache Kafka and RabbitMQ can support message buffering and event streaming. These technologies can help manage high-frequency telemetry and healthcare messaging traffic without placing unnecessary pressure on core electronic health record databases.
A well-designed integration architecture allows hospitals to modernize individual applications while maintaining access to important information stored in existing systems.
Strengthening Authentication Across Hospital Technology Environments
As developing and advancing hospitals expand their use of cloud platforms, connected devices and shared workstations, identity security becomes increasingly important.
Traditional password-based authentication may not provide sufficient protection against phishing and credential theft. Hospitals can consider phishing-resistant authentication methods such as FIDO2 and WebAuthn.
These technologies use public-key cryptography to help verify user identity without relying solely on conventional passwords.
However, the implementation strategy should reflect the hospital’s maturity and operational requirements.
For developing hospitals, a practical starting point is to pilot FIDO2 or WebAuthn for privileged administrators and other higher-risk users. Priority areas may include remote access, administrative portals and cloud management consoles.
Advancing hospitals can consider expanding these authentication methods to a broader group of employees. Patient care units may be suitable locations for carefully planned pilot programs using hardware security keys or biometric authentication.
Before a wider rollout, organizations should evaluate enrollment procedures, user recovery processes, lost authenticator procedures and the impact on clinical workflows.
Authentication systems must improve security without creating unnecessary barriers for healthcare professionals who need timely access to clinical applications.
Managing Legacy Healthcare Systems During Modernization
Legacy system modernization is one of the most complex parts of a hospital’s transition toward a more cloud-enabled infrastructure.
Older applications may support essential clinical or administrative activities and contain years of historical patient information. Replacing these platforms without understanding their dependencies can create operational disruption.
Developing and advancing hospitals should therefore establish a structured process for retiring legacy systems.
The first stage involves asset discovery and scope validation. IT teams should create a detailed inventory of the legacy platform, including its application components, servers, databases, interfaces and custom scripts.
Clinical and technical stakeholders should confirm which components are included in the modernization project.
The second stage involves dependency and impact analysis. Hospitals should identify every upstream and downstream connection associated with the system. This includes data flows, authentication services, network segments, reporting tools and third-party integrations.
Understanding these dependencies helps teams determine which applications and departments could be affected by a system change.
The third stage involves API encapsulation and read-only coexistence.
Instead of immediately removing an older database, hospitals can introduce middleware and API layers that allow modern applications to retrieve historical information. The legacy platform can then operate in a controlled, read-only state while data and workflows are transferred to newer systems.
This phased approach can help hospitals reduce technical debt while protecting access to information needed for patient care, reporting and operational continuity.
Leading-Maturity Hospitals: Accelerating Cloud Infrastructure and Advanced Digital Capabilities
Leading hospitals demonstrate the strongest commitment to expanding cloud infrastructure.
According to the 2026 Connected Hospital Report, 93% of survey participants in this category reported that their organizations were increasing investments in cloud servers.
The importance of cloud infrastructure is also widely recognized among these hospitals. Approximately 96% rated cloud-based servers as important to their technological maturity.
However, advanced hospitals are not focused exclusively on cloud adoption. The report also found that 89% of respondents in the leading category considered keeping legacy systems current important to their organizations.
This demonstrates that technology maturity involves more than adopting new platforms. It also requires maintaining existing systems, managing technical dependencies and ensuring that infrastructure remains reliable as new capabilities are introduced.
Leading hospitals also report stronger capabilities in data science, analytics, artificial intelligence infrastructure and AI applications.
While these capabilities were not established among low-maturity hospitals, between 85% and 93% of leading hospitals reported that they were well established in these areas.
These findings should not be interpreted as evidence that cloud adoption alone produces advanced AI or analytics capabilities. Rather, they indicate that leading hospitals often have the underlying resources, technical readiness and organizational capacity needed to pursue modernization across multiple areas.
Their infrastructure investments can therefore support a broader range of digital initiatives, including advanced analytics, intelligent automation and AI-enabled clinical applications.
Clinical Edge Computing and Intelligent Storage Strategies
As cloud infrastructure becomes an important part of hospital technology environments, leading organizations must also consider where specific workloads should be processed.
Not every clinical application is suitable for processing exclusively through a remote cloud platform. Some activities require extremely low latency, high-bandwidth connectivity or continued local operation when external network connections are interrupted.
Edge computing can help address these requirements by placing computing resources closer to the devices and applications generating the data.
For example, hospitals may use localized infrastructure to support surgical video routing, real-time intensive care unit alarm analytics and medical device telemetry.
One approach is to deploy high-reliability edge computing nodes in hospital telecommunications rooms or other suitable facility locations. Hyperconverged infrastructure can provide localized computing and storage resources for workloads that need rapid processing.
These systems can support certain clinical operations independently of public cloud connectivity, depending on their architecture and configuration.
Edge infrastructure can also help reduce unnecessary network traffic by processing selected information locally before transferring relevant data to central cloud platforms.
Optimizing Storage Through Automated Data Tiering
Hospitals generate substantial volumes of information, including patient records, diagnostic images, clinical documents and medical device data.
Keeping all information on the fastest and most expensive storage infrastructure can increase total cost of ownership. However, moving every dataset to lower-cost storage can affect access speed and operational requirements.
Automated storage lifecycle management allows hospitals to organize information according to how frequently it is accessed and how quickly it needs to be retrieved.
A three-tier model can provide a useful framework.
Hot storage is intended for information requiring immediate access and high input/output performance. Local NVMe or solid-state drives may be suitable for active patient records and current imaging studies, particularly those less than 30 days old.
Warm storage can support information that must remain readily accessible but does not require the same level of performance as active data. Cloud object storage may be appropriate for historical patient charts and previous imaging studies covering approximately 30 days to two years.
Cold storage is intended for long-term retention. Immutable cloud archives can provide a lower-cost option for information that must be retained for legal, regulatory or operational reasons beyond two years.
The appropriate retention periods and storage arrangements must be aligned with applicable legal requirements, organizational policies and clinical needs.
By assigning data to suitable storage tiers, hospitals can balance accessibility, performance, compliance and infrastructure costs.
Zero Trust Security and Continuous Threat Monitoring
As leading hospitals operate increasingly connected cloud, edge and on-premises environments, traditional perimeter-based security models may become less effective on their own.
A Zero Trust approach emphasizes continuous verification of user identity, device security and access context rather than automatically trusting users or devices because they are connected to an internal network.
The NIST Special Publication 800-207 framework provides guidance for Zero Trust Architecture.
Hospitals can apply these principles by requiring authentication and authorization before users access specific applications and resources. Access decisions can consider user identity, device posture, session information and the sensitivity of the requested application.
Microsegmentation can further limit unnecessary communication between systems and workloads. This is particularly relevant in hospitals where clinical applications, administrative platforms, medical devices and cloud services may operate across interconnected environments.
Using Behavioral Monitoring for Connected Medical Devices
The expansion of the Internet of Medical Things introduces additional security considerations.
Hospitals increasingly rely on connected equipment that communicates across clinical networks. These devices may include patient monitors, diagnostic systems, imaging equipment and other network-enabled medical technologies.
Monitoring normal device behavior can help security teams identify unusual activity.
AI-assisted behavioral profiling tools can be used to analyze device communication patterns and identify potential anomalies. When suspicious activity is detected, security systems may support investigation and appropriate isolation procedures.
However, any automated isolation process involving medical equipment must be carefully designed to avoid disrupting essential clinical operations.
Leading hospitals can also aggregate security information from cloud platforms, edge infrastructure and network systems into centralized Security Information and Event Management and Security Orchestration, Automation and Response environments.
These platforms can help security teams correlate alerts, investigate incidents and coordinate responses.
A Security Operations Center operating around the clock can provide continuous monitoring and support timely investigation of potential threats.
Hospitals should also consider routing privileged administrative access through controlled bastion hosts rather than allowing direct connections to internal systems. This creates an additional access-control point and can improve visibility into administrative activity.
Decommissioning Legacy Infrastructure and Reducing Technical Debt
Even technologically advanced hospitals may continue to operate older applications and physical servers. As cloud and edge capabilities expand, organizations must determine which legacy systems remain necessary and which can be safely retired.
Legacy infrastructure can increase maintenance requirements, consume data center resources and create additional cybersecurity exposure when systems are no longer adequately supported.
A structured decommissioning process helps hospitals reduce these risks without losing important historical information.
One important stage involves immutable cloud archiving and hardware retirement.
Before shutting down a legacy platform, IT teams should extract relevant database information into vendor-neutral, searchable formats. Depending on the type of information, this may include FHIR JSON for structured healthcare data and DICOM for medical imaging.
The extracted information can then be transferred to an appropriate cold cloud storage environment, subject to retention requirements, access controls and validation procedures.
Once the organization has confirmed that the archived data is complete and accessible, the physical server hardware can be powered down according to an approved retirement plan.
The final stage involves network and identity reclamation.
Hospitals should revoke user privileges associated with the retired system, decommission unused VLANs and subnets, update switch access-control lists and revise security monitoring rules.
These actions help eliminate unnecessary network pathways and inactive access permissions that could otherwise remain as potential security weaknesses.
Legacy system retirement should also include appropriate documentation, stakeholder approval and confirmation that dependent clinical and administrative workflows continue to function as intended.
Building an Infrastructure Strategy Around Hospital Readiness
The findings from the 2026 Connected Hospital Report illustrate how hospital infrastructure investments evolve as technological maturity increases.
Early-maturity hospitals are primarily focused on establishing reliable networks, strengthening cybersecurity and protecting existing systems. Developing and advancing hospitals are increasing cloud adoption while investing in interoperability, workflow automation and legacy modernization. Leading hospitals are expanding cloud infrastructure and combining it with edge computing, advanced analytics, AI capabilities and more sophisticated security operations.
These different investment patterns demonstrate why cloud and on-premises infrastructure should not be treated as competing choices.
The most appropriate deployment model depends on the workload, the hospital’s operational requirements and the organization’s ability to manage the associated technology.
Some applications may benefit from cloud scalability and centralized management. Others may require local processing, predictable performance or additional resilience. In many cases, a hybrid environment provides the flexibility to support both.
For healthcare IT leaders, the challenge is to build an infrastructure strategy that reflects the hospital’s current maturity while preparing for future technology requirements.
That strategy should include a clear understanding of application dependencies, clinical priorities, data protection responsibilities, network performance and long-term operating costs.
As hospitals continue to adopt connected technologies, artificial intelligence and automated workflows, infrastructure planning will remain a central part of digital healthcare transformation. Organizations that align technology investments with their operational readiness will be better positioned to modernize systems, strengthen resilience and support the evolving demands of connected hospital environments.
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