Is Microsoft Ripe to Purchase An Ambulatory EHR (Opinion and Discussion

Is Microsoft Ripe to Purchase An Ambulatory EHR (Opinion and Discussion – Guest Post)

Austin Merrit offers his opinions and reasons for speculation below and who he thinks are potential candidates. I guess only time will really tell the story. If you have read here often enough then you may have read some of my interviews with those in Healthcare at Microsoft and are familiar with HealthVault and Amalga.

Austin Merrit is from Software Advice, a web site that helps physicians choose electronic health records software offers his opinions and reasons for speculation below and who he thinks are potential candidates.

I have included most of his post but you can continue on at the link at the bottom to see the rest of what he has to say on the topic and who he believes could be potential companies as they exist today. BD

Microsoft Dynamics is largely present in just about every software market but medical. And they’re missing out big time. The United States healthcare IT market is growing at about 13% per year and is expected to reach $35 billion in 2011¹. The biggest opportunity for growth in the industry is among ambulatory care physician practices, partly due to the Stimulus Bill requiring the use of electronic health records (EHR) systems by 2015.

You would think Microsoft would be in such a promising industry, but you won’t find a Microsoft EHR available. The primary reason why is that EHRs are highly specialized, and Microsoft’s main products (Dynamics, CRM, and SharePoint) don’t come anywhere near the needs of physician practices. It would be very difficult for Microsoft to build an EHR from scratch and introduce it to the market. So what should Microsoft do to enter the industry? Acquire a current player.

Such an entry into the medical market would mimic the acquisition spree that Microsoft conducted between 2000 and 2002, when it acquired Great Plains, Navision, Damgaard, and several related vendors. These systems were re-branded and offered as Microsoft Dynamics. Before these acquisitions, Microsoft was not present in the enterprise resource planning (ERP) application market. Its only ERP presence was as an infrastructure vendor, licensing SQL Server databases and related platforms to support application rollouts. However, this lack of application presence gave competitors such as Oracle and SAP the opportunity to squeeze Microsoft out of the ERP infrastructure market by pushing Unix, Oracle databases and IBM DB2. By acquiring several applications, Microsoft was able to drive sales of its SQL Server and Windows Servers directly, in addition to the Dynamics applications themselves. This strategy proved effective in giving Microsoft a multi-billion dollar share of the lucrative ERP market.

Setting its sights on the medical market, Microsoft is starting to squeeze its way in with a few smaller acquisitions and developments of its own, mainly Amalga and HealthVault. However, these current medical offerings are on the periphery of the market and do not really target the sweet spot: electronic health records for physician practices. An intelligent acquisition of a large EHR player would provide a key piece of the puzzle for Microsoft’s entry into the medical market.

Microsoft Dynamics is largely present in just about every software market but medical. And they’re missing out big time. The United States healthcare IT market is growing at about 13% per year and is expected to reach $35 billion in 2011¹. The biggest opportunity for growth in the industry is among ambulatory care physician practices, partly due to the Stimulus Bill requiring the use of electronic health records (EHR) systems by 2015.

Acquired by Microsoft in 2006, the Amalga family of products (Hospital Information Systems, Life Sciences, and Unified Intelligence System) addresses hospital administration, data aggregation for biotechnology firms, and information connectivity to large enterprises. Microsoft may be planning to expand Almaga’s presence or may be looking to acquire another vendor to complement it. Regardless of Microsoft’s strategy, Amalga still would not address the physician practice EHR market.