Microsoft Healthcare: Renewed Focus Offers Rewards and Risks

By Joshua Osborne

Director of Client Services, Microsoft, NPI

February 05, 2019

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In 2018, Microsoft reestablished and reengineered its focus on the healthcare industry. Sales teams have been restructured, leadership moved to create new alignments and reporting structures, and agreements and guidelines were re-messaged. As a result, we’re seeing a more systematic approach to the sales and pricing process.

This is all part of Microsoft’s strategy to push healthcare customers into the cloud more rapidly. Mid-year, Microsoft hired two industry veterans: Jim Weinstein as VP of Microsoft Healthcare (formerly CEO of the Dartmouth-Hitchcock Health System) and Joshua Mandel as new Healthcare Chief Architect (formerly head of health IT ecosystem work at Verily [Google Life Sciences]). In concert, Microsoft formally kicked off ‘Healthcare NExT’ (which stands for “new experiences and technologies”) – an effort designed to foster industry partnerships and bring Microsoft’s research, AI and cloud teams together to focus on healthcare initiatives.

Other tech companies such as IBM, Baidu, Google and Alibaba are all working on similar initiatives. Analysts predict that AI in healthcare is inevitable, however challenges on the road to get there are many. It is estimated that there will be huge savings across the US healthcare system once the technologies can be fully realized. Microsoft plans to share much more about Microsoft AI, IoT and cloud in 2019.

Microsoft’s healthcare customers can expect to feel a mixture of pros and cons as Microsoft doubles down on the healthcare industry. Changes in account teams and agreement structuring need to be carefully navigated. Microsoft is a huge organization, and big changes like this create confusion as new processes and knowledge filter through the organization – not just among customers, but also among Microsoft sales and account teams. There are pitfalls for customers, but also leverage opportunities – don’t miss them!

Also, it should be noted that Microsoft’s laser-like focus on moving more parts of the healthcare IT ecosystem to the cloud means healthcare customers are at a greater risk for audits. Software license audits have proved to be an effective way to “motivate” clients to move to the cloud more quickly, and vendors like Microsoft, Oracle, IBM and SAP are using this tactic in full force. Over the past year, NPI has seen an increasing number of our healthcare clients targeted by Microsoft with full-blown software license audits.

We advise customers to proactively clean house compliance-wise (do an internal “self-audit” to understand your license position and remediate any issues), and before the next EA renewal get expert assistance with defining the optimal licensing strategy.