Microsoft’s Health Solutions Group (HSG), which has straddled the fence with consumer-facing (HealthVault) and corporate-facing (Amalga), is increasingly moving to the corporate side of the fence. Not that surprising considering that the consumer market continues to struggle (Google Health is in virtual mothball state, consumer adoption of HealthVault is nothing to write home about) and that HSG has now moved out of R&D and is now under the business solutions group, Dynamics. At the end of the day, HSG head Peter Neupert has to show that he can deliver the goods and Amalga is the horse he’s betting on (Note: Sentillion is there as well, but think of Sentillion as the gate-keeper to accessing Amalga).
Yet Amalga has gone through its share of birthing pains with some in the industry beginning to question its value.
Amalga has suffered from two significant problems, both inter-related. The first is that Amalga is an extremely powerful set of data aggregation and analytical tools, but it is more of a toolset then a product and this leads to long implementation time-frames and subsequently an inability to extract value quickly (ROI for Amalga is measured in years). For example, in 2009 Golden Living signed on to adopt Amalga and HealthVault. At last week’s Connected Health Conference, (CHC) Golden Living presented some remarkable results of how they are transforming long-term care through the use of Amalga. But in their presentation, Golden Living also stated that they knew full well when signing on to Amalga that this was going to be a multi-year effort and their implementation team has been given 5 years to put Amalga in place. Five years to fully implement a software solution is a very long-time and similar to the installs of the largest EHR systems. Unfortunately, many early Amalga customers did not have the foresight of Golden Living. In recent conversations with Microsoft, Chilmark has been told that significant resources are now being dedicated to improving time to value for Amalga. We’ll have to wait and see as the CHC sessions we attended on Amalga and HealthVault Community Connect, did not make this readily apparent.
Secondly, the flexibility of Amalga led Microsoft to pursue a number of different strategies and markets. One apparently aborted strategy was for Amalga to become a Platform as a Service (PaaS) when it announced at the 2010 HIMSS its partnership with Eclipsys wherein specific Eclipsys modules would run on top of the Amalga platform. Well a platform is not a platform if it does not support an ecosystem of third party applications. To date, Microsoft has announced no additional partnerships similar to that of Eclipsys for Amalga so this strategy has stalled.
This was also looking to be the case for Microsoft’s HIE strategy. In the profile we did of Microsoft for the HIE Market Report we questioned whether or not Microsoft would stick with this market as they had not had a significant HIE win in nearly a year. In a conversation with a CIO of a large academic medical center at CHC, he also brought up the question of whether or not Microsoft was committed to supporting HIE functionality within Amalga, so clearly we were not alone in our opinion. Those fears were put to rest last week when Microsoft announced the Chicago HIE contract win, which is a monster representing some 70% of the healthcare facilities and a population of 9.5 million in the Chicago metro area. The Chicago HIE is a very visible win for Microsoft and a clear signal that they intend to be a major player in the HIE market.
It was also clear at CHC that Microsoft HSG is very focused on Amalga. The majority of sessions were dedicated to various aspects of leveraging Amalga (clinical decision support, care transitions support, comparative effectiveness, etc.). Virtually all users we spoke to at CHC were there to learn more about Amalga. And maybe the most telling sign was the list of exhibitors. Unlike CHCs of the past, there was not one EHR company, very few third party software vendors (~14%), and only a couple of exhibitors with clear connections to HealthVault. Consulting and service firms, however, were there in force representing over 50% of exhibitors.
While the Chicago HIE win is a strong vote of confidence in Amalga sending a clear signal to the broader HIT market, Amalga is not out of the woods yet. Broader adoption of Amalga will be highly dependent on Microsoft’s ability to further “productize” Amalga to insure faster installs and accelerate time to value. In today’s market, where senior IT executives of healthcare organizations are literally swamped in various initiatives (e.g., 5010, ICD-10, EHR/meaningful use), the last thing most want to adopt is an Amalga toolset. Developing Amalga to address specific use cases will go a long way towards seeing broader adoption of this potentially powerful solution.
Amalga is a strange but potentially very valuable product in the HIT market, but Microsoft needs to improve the way it positions the value statement to CIOs/CMIOs; and reduce the Total Cost of Ownership.
Its origin in the ER as a tool for summarizing existing data in the healthcare enterprise is very evident in the current architecture and functionality. In that regard, Amalga functions very well as a read-only tool for existing transactions in systems such as LIS, RIS, and billing. Interestingly, Amalga also provide a very solid data analysis platform, somewhat similar in intent to a data warehouse. As a consequence, Amalga is equal parts transaction processing and analytic processing– which is potentially very powerful, especially to smaller healthcare organizations or later adopters of EHRs who want to leverage existing data and transaction systems at the point of care, without necessarily buying into the current crop of semi-adequate EHRs. If I were CIO for a small rural facility (or collaborative facilities) with limited budget, I would look strongly at Amalga as a first-step towards computerization of patient care. But, the first big drawback to this strategy is Amalga’s split personality for data collection at the point of care– orders, problems, medications, and progress notes are orphaned. Achieving Meaningful Use with Amalga is going to be very difficult if not impossible…but… maybe that implies a flaw in MU rather than Amalga. The other big drawback, of course, is the cost, which is historically outrageous.
As a professional, I see in Amalga the potential for a new and better class of HIT tools which displace the traditional and often painfully complex and costly diad of EHR and Data Warehouse. In Microsoft, I see an unfortunate ability to position, price, and roadmap Amalga to unleash the potential and change the industry. In all sincerity, I’m cheering for them to adjust their course because I believe they are holding a game changing product.
Cayman Islands National Health System
[…] Article John Moore, Chilmark Research, 3 May 2011 […]
I think what’s interesting is how the quite broad ambitions and portfolio of Microsoft Health Solutions Group have narrowed so much to be almost exclusively about one product Amalga UIS.
Despite a string of acquisitions (MedStory, Azyxxi, Global Care, Sentillion) and development (HealthVault), Peter Neupert seems to have narrowed the target to just the one product Amalga, which really is just a clinical data repository and so just another me-too product in an already crowded marketplace.
MedStory was abandoned because they couldn’t make revenue from search over health records. Global Care was abandoned because after two years they had made no sales. HealthVault is not a revenue maker so only gets enough development resources to sustain itself. And Sentillion – well, that’s an odd one because it seems to compete head on with another of Microsoft’s products called Forefront, so that maybe why it’s not getting any airplay.
These acquisitions must have been expensive – the only information point I could find was an old article that suggested Peter Neupert had spent $1bn on acquisitions, not including Sentillion. (http://healthspottr.com/fh100/585-peter-neupert)
If that’s correct, then that’s a lot of cash spent with not much to show for it.
Plus it’s equally interesting that there’s nothing really new from Microsoft HSG in almost two years and no significant signings of new customers (granted Chicago is intriguing but that’s only HIE #2 for Microsoft, and somewhat hyped up in their press-releases).
Apparently, there’s some significant product redevelopment going on, with a project to redesign the way Amalga UIS works at the front end (because many potential customers are turned off by the Excel-like user experience) and to redesign how data is standardised within the data repository (because right now it isn’t). At least that’s how it was described to me at HIMSS.
But if that really is the case and they’re dumping most of the technology acquired and embarking on what might be seen as starting from scratch at the drawing board, then it’s probably more worrying than hopeful. Even Microsoft must at some stage realise that there aren’t rivers of gold in health IT – it’s hard, low-margin slog even for some of the most successful companies. And at more than a billion dollars to get to this stage, is Microsoft really going to stick with it?
Microsoft has always had deep pockets to spend (and spend without any return) , along with an enviable marketing machine to maintain an illusion of success. But, I think realistically we’re seeing the endgame here of a familiar pattern. Many big IT companies have been lured to health IT believing there must be rivers of gold, that it all can’t possibly be that hard, and that they have the smartest technology. Then they stumble on the technology, stumble on sales, then ultimately realise that health IT is a long, long game. Amalga UIS may be their last and only product now, but you can’t build a business on just one product.
[…] as Medicity with its iNexx platform, Covisint with its AppCloud or even Microsoft’s somewhat aborted attempt with Amalga. Yet, despite these efforts, we do not see any one HIE company really grasping the […]
[…] another way (to quote John Moore at Chilmark Research), Amalga is “more a toolset than a product.” McLemore acknowledged that […]
[…] another way (to quote John Moore at Chilmark Research), Amalga is "more a toolset than a product." McLemore acknowledged that provider […]