Cloud computing is changing enterprise across all industries, and the recent success of Veeva’s IPO is further evidence that the life science industry is no exception.
Ten years ago, pharmaceutical companies and medical device makers were not comfortable putting their data in the cloud. There was an (unfounded) fear that cloud companies were not as secure as onsite deployments. Cloud EDC vendors like Medidata were just forming and paving the way to convince sponsors that actually data was safer in the cloud.
Fast forward to today, and the industry is completely different. Medidata is a $3.1 billion company, publicly trading on Nasdaq since 2009. Veeva, now public since October 16, is hovering around $4.5 billion. I founded Comprehend to provide cloud analytics and collaboration across different data collection systems, but there are also dozens of other cloud technology vendors, like Medrio, that’s created a simple yet powerful EDC - and we will continue to see more.
Veeva’s successful IPO is proof that cloud options are serious alternatives to onsite deployments that were most popular two decades ago. Here are the primary reasons every life sciences company should consider cloud, if they haven’t already:
- Lower ongoing cost – Cloud vendors have several cost advantages over an in-house deployment. Cloud vendors can take advantage of massive economies of scale, meaning that they can pool certain resources across all of their customers in ways that individual sponsors cannot. For example, a cloud vendor can hire a single system administrator that can maintain a dozen or more individual systems, whereas a sponsor would only be able to use that system administrator for themselves. The cloud vendor can spread the cost across several of their customers, ultimately offering a cheaper option overall.
- No capital expense – When a sponsor buys an onsite system, they need to provision hardware and internal resources to setup and maintain the computing infrastructure, not to mention that onsite software typically costs a lot of money upfront. With cloud technology, there often is no capital expense up front, so sponsors can simply start subscribing and pay a monthly or quarterly operational expense.
- Pay only for what you use – Not only is cloud much cheaper to start with, but it’s more capital efficient. Sponsors pay only for what they use. If they start using more, they pay more. If they start using less, they pay less.
- More secure – Cloud vendors have much more experience with computing infrastructure than sponsors due to the nature of the number of different sponsors that they serve. Similar to efficient pricing plans, vendors can take advantage of economies of scale in regards to security as well. Because cloud vendors work with more systems and data, they can afford (and become) security experts much more easily than sponsors.
- Focus – It’s important for every company to focus on their core competency, which is why more and more sponsors are outsourcing trial implementation to CROs. The same can be said about technology. Let vendors focus on running, maintaining and securing technology infrastructure so life sciences companies can focus on their core competencies.
- Scalable – Cloud vendors are used to executing much larger deployments, and several simultaneously. They already have the infrastructure in place to scale as necessary, so it’s much easier for them to do than the sponsor internally.
- Quick deployment – Cloud systems can be up and running much quicker than onsite deployments due to less of a need for elaborate provisioning, planning, training, etc. Cloud vendors have brought their systems online many times before, whereas when a sponsor implements an onsite deployment, it’s usually their first time and takes months or years. Cloud deployments can often be up in running in days or weeks.
These are some high level benefits of cloud for life science companies. The most important point is that it’s happening, as Medidata and Veeva are proving. We are still in the very early days of cloud adoption in life sciences, with the biggest value savings still ahead of us.
If they haven’t already, every life sciences executive managing clinical operations should consider fully embracing the cloud.