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Microsoft Zeros in on Healthcare

November 1, 2006
by Kayt Sukel
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The software giant's acquisition of Azyxxi signals a shift in strategy.

Microsoft, Redmond, Wash., has long been engaged in the healthcare industry by providing operating systems and other infrastructure tools to more than 600 global partners. But its recent acquisition of Columbia, Md.-based MedStar Health Inc.'s Azyxxi, a clinical data repository system, signals a shift in strategy.

"We wanted to make a bigger investment," says Peter Neupert, corporate vice president of Microsoft's Health Solutions Group and one of the key players spearheading the initiative. "We want to make a series of changes that will create more value-add for people trying to solve problems in the healthcare area."

Azyxxi's allure

Azyxxi was created by a group of physicians and has been used successfully in MedStar's Washington Hospital Center in Washington, D.C.

A knowledge-driven healthcare initiative, Azyxxi is a central repository of patient information that allows clinicians to retrieve and view patient data from a variety of sources including legacy admission, laboratory and imaging systems.

"Azyxxi has an interesting approach in how they create health intelligence for enterprise users," says Neupert.

That approach is one that Microsoft would like to leverage in creating new healthcare-focused applications.

Neupert defines health intelligence in terms of systems or applications that make all aspects of the enterprise instantly available to end users: clinical intelligence in the form of electronic patient data, business intelligence with utilization and optimization data streams, and financial intelligence providing billing and claim information.

"Peter Neupert makes a pretty clear case that his charter is to get beyond the veneer into targeted products and services for healthcare."

Some analysts have suggested that this move may be problematic for Microsoft's current stable of healthcare partners. Microsoft, however, contends otherwise.

"The current approach basically goes that you buy it all from one vendor and you'll have what you need," says Steve Shihadeh, Microsoft Health Solutions Group's general manager for sales and marketing. "But you can have Azyxxi collect all the data from all these other systems, extending the life of those systems, while providing clinicians and administrators with the critical information that they need."

Opportunities abound

In any case, Microsoft isn't resting on its laurels. As part of the Azyxxi acquisition, two of the system's creators and about 40 members of its development team have moved to Neupert's new Healthcare Solutions group. The group is currently working on a suite of healthcare applications.

Regardless, industry analysts will be watching Microsoft's next steps closely.

"Peter Neupert makes a pretty clear case that his charter is to get beyond the veneer into targeted products and services for healthcare. And he has a sizeable war chest for doing so," says Wes Rishel, managing vice president for Gartner Research for Healthcare Providers, Stamford, Conn. "We have to think about what they're doing. This is just the opening round."

Much ado about nothing?

But Bill Crounse, M.D., Microsoft's global healthcare industry director and evangelist for new technologies in healthcare, says that far too much attention has been paid to this move.

"People have read more into the Azyxxi acquisition than they ought to," Crounse says. "What it does say for sure is that Microsoft is very serious about healthcare and making serious investments to take technology — whether leveraged through our partners or our own solutions — to help healthcare meet the consumer. And that's all goodness as far as I'm concerned."

Author Information:

Kayt Sukel is a freelance writer based in Germany.