Microsoft and GE Announce Healthcare Joint Venture

Posted on December 12, 2011 I Written By

Priya Ramachandran is a Maryland based freelance writer. In a former life, she wrote software code and managed Sarbanes Oxley related audits for IT departments. She now enjoys writing about healthcare, science and technology.

I got suckered into article-hopping on TechCrunch reading Dave Chase’s opinion piece on Microsoft’s recent joint venture with GE Healthcare, only Chase’s headline reads “Microsoft Ends Another Vertical Market Dalliance—This Time In Healthcare”. Two hours later, here I am with the post I should have written right away.

Regarding the joint venture, here’s what the Microsoft spin machine put out, and here’s the original New York Times blogpost that first broke the news.

To summarize: Microsoft and GE will be joining forces in a healthcare joint venture, if and when the deal gets regulatory approval. Some of Microsoft’s healthcare projects like Amalga, Vergence, and expreSSO will now form part of the joint venture. The new company has not been named, but there are plans to hire 750 people, sourced from Microsoft, GE and elsewhere.

– HealthVault still remains with Microsoft.

I’m not a Microsoft fan by any standards but I’m not so sure it’s a bad idea for Microsoft to want to join forces with GE, and keep HealthVault inhouse. And I’m also not sure I’d term the process an end to Microsoft’s healthcare plans. It seems more of a shift in gears. However, Chase, who worked with Microsoft for 12 years, believes it is a sign of an exit given Microsoft’s old exit patterns. (Chase’s list of all the verticals Microsoft has exited from makes for interesting reading. Did you know Expedia used to be a Microsoft company? Me neither.) Posting in the discussion following the Tech Crunch article, Chase also insinuates that there have been layoffs among Amalga employees, though he doesn’t give any numbers.

The NYT post states that the aim for the new company is to provide a Windows like platform which developers can then use to create healthcare related apps and services on. It also rightly points out that EMR vendors like Epic and Cerner are not going to be falling head over heels building products for the new platform.

One of the most trenchant comments (to me at least) on the NYT post comes from a commenter called Manuel Albarracin:

“Also, beyond Epic or Cerner, there will be others who will resist change along these lines, for this resistance comes not only from (legitimately) wanting to protect market positions and commercial interests; it also comes from a subtle but entrenched (and not so legitimate) mentality to reinvent the wheel at every healthcare organization, to ‘control things our way’, thus creating ‘walled-gardens’ in each of them.”

Which is probably what Microsoft has in mind – to provide the framework that the apps are built on. If the Windows experience is anything to go by, we should be in for an interesting ride.