ClearData Raises $7 Million For Cloud Service Designed For Health Care Providers

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ClearData Networks has raised $7 million from Norwest Venture Partners and Excel Venture Management in Series B funding for its cloud service that caters to the health care market.

The end-to-end service is designed to move medical applications and data onto ClearData’s platform allowing health care organizations to access the data over a private Internet connection.

The data is stored in one of the company’s three data center locations on the U.S. West Coast, Midwest or East Coast. It uses what it calls “chain of custody,” software and procedures to know where the data resides for full auditing as required by HIPAA, the health-care privacy law.

ClearData is a different kind of cloud service than Amazon Web Services (AWS), Rackspace or Windows Azure. The data on the ClearData infrastructure is stored in high-end storage equipment that has been custom designed for healthcare data and images. By contrast, AWS runs all its data across commodity servers in clusters according to a shared, multi-tenant model.

Customers are small to large health care providers such as doctor practices or large clinics and hospitals. ClearData also serves health care software companies – both client-server and SaaS-based providers.

AWS, Rackspace and Windows Azure are natural competitors to ClearData. The leading cloud service from Amazon serves as a general-purpose cloud that is also specialized to some extent with its growing offerings that span from storage services to data analytics.

CEO Darin Brannan said in an email that AWS and Rackspace are not HIPAA-compliant and push a “shared responsibility model.” Compliance is up to the customer, requiring them to build out a cloud that meets the standards of the law.

Like a lot of companies in verticals outside the technology market, health-care providers lack resources and are looking for ways to fix their problems. That’s the target customer that ClearData is looking for. Companies that need help designing, deploying and managing their applications and data on infrastructure that they rent, not own.

No one cloud service fits the entire commercial spectrum. ClearData plays in the $35 billion health care market, which is being disrupted, as companies prepare for the effects of new health care legislation. That provides an open space for ClearData, but it also leaves room for a new generation of competitors with more specialized or simpler-to-use offerings.