Microsoft announced it will acquire Global Care Solutions Thailand, Ltd (GCS) for an undisclosed sum. GCS is a small company that has developed a diverse range of healthcare IT (HIT) software modules, all based on the Microsoft stack. Currently, GCS claims to have seven hospitals, all in Southeast Asia, that are live on its HIT suite.
With this acquisition, Microsoft is sending a clear signal to the market that it is not content with just providing the underlying infrastructure for HIT, as was the case with the Azyxxi acquisition last year, but is intent on moving up into the application stack. This will move Microsoft from being a partner with many existing HIT independent software vendors (ISVs) to being a direct competitor.
What Microsoft Bought
What GCS offers today is a very broad range of clinical and back-office applications, a total of 50 modules in all, that range from patient management and scheduling, to such ERP-centric applications as financials, asset management and HR, to clinical applications such as radiology (RIS/PACS), lab, pharma, pathology, etc. The GCS application suite appears to be highly scalable with its largest deployment being that at the Bangkok-based hospital, Bumrungrad Hospital PLC, which serves some 1.2M patients per year (many of them “medical tourists“) from 190 countries.
With only seven deployments in seven years, GCS introduced first product in 2000, it is not like GCS is taking the market by storm. Microsoft will provide resources and brand to leverage but impact will not extend significantly beyond the Asian market for the following reasons:
- Microsoft will not want to alienate existing ISV partners, such as Allscripts, especially when they are currently working with these companies on building out the HealthVault platform.
- GCS is focusing on the accelerating growth in medical tourism taking place in Asia. This acquisition provides Microsoft an entry point into this fast growing market and it is unlikely that they will aggressively distribute this product in more developed regions such as Western Europe, Japan and North America. But with Microsoft’s support, GCS will be able to rapidly expand their sales and distribution network in these emerging markets with other HIT ISVs suffering as a result.
- Several years ago Microsoft made a similar move in the business application market when it acquired Great Plains and then Navision. Many thought that with these acquisitions, Microsoft would rapidly consolidate the lower tiers of the market. Many years later, this has not occurred. The same will hold true here; Microsoft will gain new customers that have not already chosen a solution, but will not make significant in-roads against entrenched competition.
- Despite Microsoft’s best efforts to assuage the fears of HIT ISV partners, there will be some fall-out and many will begin distancing themselves from a strict MS-platform development stance. IBM could be a beneficiary of such actions, although they will be nominal due to the vast presence Microsoft currently has on the desktop.
So, do not expect to see your friendly Microsoft value added reseller (VAR) pushing the GCS product anytime soon in North America or Western Europe. What you may see instead is companies who once loudly trumpeted their solutions all being built on the Microsoft stack to not be quite so enthusiastic and vocal. These ISVs will also begin thinking twice before becoming too embedded in the Microsoft platform in the future and will start hedging their bets by seeking out other partnerships.