EHR vendors will likely offer you one of two choices for implementing your EHR/PM solution... "ASP" or "On-Premises". Deciding on which model is best for your practice is an extremely important topic. Your choice may have a greater affect on your practice than almost any other issue surrounding EHR systems.
Vendors will more likely encourage you to choose their "ASP" aka "Application Service Provider" model. In fact, some EHR vendors do not offer an On-Premises version of their product. You should probably steer clear of any vendor that does not offer both options because it boxes you in to a single architecture that may not be well suited for your practice. There are reasons for this... which you must take into consideration and think about very carefully. The sales pitch promises that the ASP Model will reduce your operational costs and IT complexity. But, is that really true?...
The current trend in business computing is known as "Cloud Computing". Perhaps you've heard this term before and its related terms "SaaS" (Software as a Service), "ASP" (Application Service Provider), or "Hosted Model". Let's discuss what these concepts mean... especially in the context of running an EHR/PM system for your practice.
"A problem looking for a solution" - It's a given that most companies now use computers. Hardware and software must be installed, maintained, patched, and upgraded over time. In short, they need to be routinely "managed". For a small business, this isn't much of a problem depending on the available skills and needs (i.e. computer management is typically a manual process performed on an as-needed basis). Within larger companies however, the management and expense of maintaining the IT infrastructure is an everyday challenge due to the sheer size and complexity of it. To lessen the IT burden, these companies work with vendors, such as Microsoft, to implement "automated management" solutions that help take care of the Server and Client computers on the corporate network. However, software is still purchased and licensed on a per-workstation or a per-user basis. So, the cost for big companies to purchase, upgrade, and maintain software is still a big challenge.
One potential solution to this problem is a new idea called Cloud Computing. The concept is not really new. It actually refers to Client/Server computing... but implemented on a massive scale. Client/Server computing is a model we've all been using for a long time. It consists of a Server with a number of client workstations connected to it by a network. Each Server can perform many roles (file server, application server, authentication, security, web services, etc.). A Server consolidates resources such as - application programs, data storage, user accounts/profiles, network security, and management policies making it less costly to run the business as opposed to having all of those resources installed on each individual computer. In essence, the Server "actively manages" the network clients and provides services to them.
It is worth noting that a significant number of smaller companies do not have any "real" Servers at all. They use what are known as "Peer-to-Peer" networks where all client computers stand on their own but are connected in a network by switches and routers. Today, the advantages of having a real Client/Server network far outweigh the objections to not having one - as we shall see...