Rethinking Healthcare

Microsoft expanding bid in health IT space

Microsoft expanding bid in health IT space

Posting in Government

Microsoft is serious about serving hospitals, that it is committed to the fight. And if hospitals choose Microsoft's promises over what Cerner and McKesson actually deliver, it could work.

Microsoft continues to demonstrate it has the patience to take a long view in health IT, and the financial muscle to get things done now.

Microsoft entered the hospital software market last year with a product called Amalga which has had difficulty gaining traction in the hospital software space.

Rather than backing away, Microsoft is doubling-down.

An example of its long term view is on display today, with the company buying assets from a piece of a unit of Merck. Rosetta Biosciences works in the area of genetic software, very important for hospital labs.

Microsoft will use those assets to make Amalga more of a force in the specialty hospital software space  of lab software, which is now dominated by specialty firms like Cerner and McKesson.

While Microsoft wants to be patient, there is a sense of urgency here given the nearly $20 billion in the Obama stimulus, called the HITECH Act.

The money provides incentives for doctors and hospitals to buy gear and software. HITECH also includes penalties the government can employ later against those who reject the incentives and don't automate.

The money is available for about five years, and given the long lead times for installing and training people on complex software in this space customer decisions are already being made.

So the Rosetta deal is a marker. It shows Microsoft is serious about serving hospitals, that it is committed to the fight. And if hospitals choose Microsoft's promises over what Cerner and McKesson actually deliver, it could work.

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Dana Blankenhorn

Contributing Editor

Contributing Editor Dana Blankenhorn has written for the Chicago Tribune, Advertising Age's "NetMarketing" supplement and founded the Interactive Age Daily for CMP Media. He holds degrees from Rice and Northwestern universities. He is based in Atlanta. Follow him on Twitter. Disclosure