Microsoft Makes First Foray as Industry-Specific Provider

Microsoft traditionally has focused on building industry-generic productivity, communications and collaborative software.

Now, though, the company appears to be heading down a path well trodden — for better or worse — by such companies as Siebel, SAP and a host of best-of-breed vendors: the software verticals.

Doctor Designed

Microsoft recently announced it will acquire the health intelligence software company Azyxxi and will forge a strategic alliance with hospital service provider MedStar Health.

Azyxxi offers a collaborative tool that brings together all types of patient data — from EKGs, scanned documents, X-rays, CT scans, MRI scans and PET scans to dynamic angiograms and ultrasound images — and makes them available at the point of care.

Built on the Microsoft .Net Framework and used with Microsoft SQL Server database software, the Azyxxi application can answer clinician-specific questions very quickly and identify new patterns in the data.

Designed by Drs. Craig Feied, Mark Smith, and Fidrik Iskandar, Azyxxi was first deployed in 1996 in the emergency department of one of MedStar Health’s hospitals, Washington Hospital Center, in Washington, D.C.

“The reality is that most hospitals have islands of data that can’t easily be shared with other systems because of disparate data types,” Feied said. “We developed Azyxxi to address this challenge.”

Financial terms of the acquisition were not disclosed.

Under the agreement, Azyxxi’s creators will continue to support the development and expansion of the application. Feied and Iskandar, along with approximately 40 employees from the development team at Washington Hospital Center, will join Microsoft and continue to work on enhancements to the product. Smith will remain as chairman of the emergency medicine department at Washington Hospital Center and will also serve as chief clinical liaison to Microsoft.

A newly formed division led by Peter Neupert, corporate vice president of Microsoft ‘s health solutions group, will incorporate the new employees and manage product development and delivery.

Which Vertical? Which Partner?

Offering a vertical application has been the typical route for software vendors to take in order to build out market share. Usually it is a smart idea; occasionally, though, a vendor can take it to extremes — as Siebel did with its wealth of offerings — and drain resources from the firm.

Microsoft, clearly, does not have either of these problems. By selecting healthcare, the company made a smart choice in that it picked one of the few verticals not yet dominated by a strong vendor, Yankee Group analyst Sheryl Kingstone told CRM Buyer.

“Amdocs owns the telecom space; [Oracle’s] Siebel has a strong penetration in financial services,” she noted. “Healthcare is still very fragmented. There is a great opportunity for a company to provide leadership.”