What does a tech behemoth do when it becomes clear it can’t chase nimble innovators anymore?
Microsoft’s Office and Windows empire can only grow incrementally at this point, and may yet decline with the emergence of cloud-based alternatives. Having reluctantly purchased a Mac, I can now understand the quality difference is huge, and I doubt Microsoft could ever catch up. But the sheer scale of the healthcare IT market has roused the Beast from Redmond to action. When Andre the Giant walks toward your street, you’d better pay attention!
Keep in mind that the governmental-regulation intensive world of healthcare IT is qualitatively different from what economics textbooks refer to as the “free market”. As an apocryphal French bureaucrat supposedly said: “that may work in practice, but it will never work in theory.”
There is no level playing field here, and the historical principle of small, clever, innovative companies out-maneuvering the corpulent giants of yesterday is probably a fantasy for this domain. Mergers, acquisitions, and partnerships are the less risky path to market-share growth. Only the most powerful companies have the vast war-chest and legions of lawyers, analysts and lobbyists to compete for the insanely big bucks and shape the regulatory and competitive environment more to their liking. But what is the upshot of the Microsoft-Athena alliance for the rest of us? My contacts at www.softwareadvice.com have some timely analysis that bears examining:
What does this mean for ambulatory care EHR adopters? Not much for now, but it could pave the way to a much bigger collaboration between the two industry giants. Instead of acquiring EHR vendors as we discussed in April, Microsoft could be dipping its toe in the water by partnering instead. Partnering requires much less risk and is often the first step towards a larger move such as an acquisition.
From Athena’s standpoint, the partnership is a great opportunity to work its way into other organizations using Amalga. It’s a no-brainer and a win-win. For Microsoft though, the choice of Athena as a partner is surprising for a few reasons:
- We would still expect any Microsoft partner to possess the characteristics that we outlined in April of a lucrative acquisition target: large market share, scalable products, and .Net architecture.
- While Athena is a big brand and its system is scalable, it doesn’t have nearly the user base of bigger firms such as Allscripts or eClinicalWorks.
- The SaaS model provides zero synergy with SQL Server and Windows Server sales.
However, Athena’s commitment to cloud computing could prove to be attractive as Microsoft has been criticized for being late to the cloud party.