Strategies for Large Tech Companies to Enter Into the Healthcare Market

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Strategies for Large Tech Companies to Enter Into the Healthcare Market

Below is an overview of four instances where a large technology company has partnered with a healthcare company to advance their business. Where applicable, investment numbers have been included, however, these were not publicly available for the IBM & Cisco partnership (and the subsequent purchase of their technology by Medicat), as well as Apple. Each section includes an overview of the partnership details, followed by goals and/or successes of the partnerships.


Microsoft and University of Pittsburgh-Medical Center (UPMC) partnered together in 2017 to create Healthcare NExT, which will be “one of the largest integrated healthcare delivery networks in the United States.” Healthcare NExT will focus on applying technology, as it relates to artificial intelligence (AI), cloud databases, and collaboration and business optimization tools. NExT will integrate “greenfield research and health technology product development”, and ultimately create a new standard for health industry partnerships at Microsoft.

The first implementation of NExT will take place at UPMC, and will work to improve “healthcare delivery through a series of projects, beginning with a focus on transforming clinician empowerment and productivity.” Steven D. Shapiro, M.D. and Chief Medical and Scientific Officer at UPMC spoke about the partnership, stating that NExT will allow doctors to focus on their patient relationships and provide better healthcare, while Microsoft will handle the behind-the-scenes technology and electronic paperwork.

Goals and objectives of the partnership include designing three “digitally-based specialty hospitals” that will utilize innovative technology treatments for “cancer, heart diseases, transplantation, diseases of aging, vision restoration, and rehabilitation.” UPMC wants to incorporate the AI and cloud services offered by Microsoft and integrate them into their healthcare system to increase efficiency throughout the hospitals, while also integrating devices and technologies. UPMC is investing $2 billion in the NExT project, “in addition to $1 billion (they already) set aside” for the project.
Microsoft will handle designing the IT infrastructure, and is hoping this partnership will expand their business into “new opportunities in digital health.” Digital health is a fast-growing avenue of healthcare and was projected to receive funding of over $7 billion by the end of 2017 (no concrete numbers are yet available for 2017 performance).

Further goals of NExT partnerships include applying the following tactics to better the healthcare system:

HealthVault Insights: a research-based project that allows partners to create new discoveries in patient health, while “encouraging patient engagement…by (utilizing) scientific advances in machine learning.” Other partners contributing to HealthVault Insights include Tribridge, and System C & Graphnet Care Alliance.
Microsoft Genomics: Focuses on streamlining the sample-to-answer process in healthcare through a genome analysis pipeline, which is powered by Azure. Partners include BC Platforms and DNAnexus.
Health Chatbot Technology: Microsoft is utilizing AI to build conversational health tools, and is developing technology that will allow patients access to self-triage inquires before they speak with a doctor via video. The largest partner in the Northwest United States (Premera Blue Cross) is planning to use chatbot technology to allow their members to research their health benefits.

InnerEye: InnerEye is an AI-powered software, research-based radiotherapy planning tool. “The goal of the project is to allow dosimetrists and radiation oncologists to achieve 3D contouring of patients’ planning scans in minutes rather than hours.”
Further, Microsoft is utilizing cloud database technology (Microsoft Office 365 Virtual Health Templates) to connect patients to their providers through “voice, video, and messaging in any interface or application”, all of which is powered by Skype for Business. Partners already utilizing Microsoft 365 include RingMD, Careflow, Cambio, and GE Healthcare. Microsoft is also utilizing the cloud to allow healthcare partners streamline their business practices as it relates to billing and health claims. CGI ProperPay is a predictive analytics tool that can reduce “healthcare claims fraud…(which) is a $450 billion problem around the globe.”


Apple is partnering with twelve hospitals across the United States to beta test a new healthcare feature in their operating systems. Hospitals involved in the program include Rush University Medical Center in Chicago, Johns Hopkins Medicine in Baltimore, and Cedars-Senai Medical Center in Los Angeles.
Apple is utilizing innovative technology in health IT that will aggregate health data, and allow patients “access to their medical records and test results” on their iPhones or iPads. Apple not only wants to align themselves with the $3 trillion healthcare sector but also increase bulk sales iPads and iPhones for hospitals. Shaun Miller, a doctor at Cedars-Senai, said they already have hundreds of iPads on hand for patients to use, and as they expand the technology to more wards throughout the hospital, they expect to have thousands on hand.

To ensure their success in the healthcare market, Apple is looking “at themselves as a platform.” Instead of developing their own Apple-branded apps for hospitals, Apple is working alongside developers who “are already building apps for health”, and taking feedback from developers and hospital executives. Apple has since presented three software options in the healthcare market (CareKit, ResearchKit, and HealthKit), which are designed to make the process of compiling health information (i.e. steps taken, sleep patterns, heart rate) easier for mobile developers.

HealthKit: Makes it easier for “developers to gather health data” (with user consent).
ResearchKit: Allows researchers to find and recruit participants for their medical studies, and is already in place at Mount Sinai, Stanford Children’s Hospital, and Harvard University.

CareKit: Designed for patient use, so they can share their data and experiences with their team of doctors (meant for patients with chronic conditions).
These have allowed Apple to establish a presence in “hospital care, at-home care, and medical research.” Garry James, a patient at Cedars-Senai, utilized Apple’s CareKit technology while waiting for a heart transplant. He is able to use the hospital-provided iPad to “message his nurses, order magazines, make notes, browse medication side effects, reserve lodging for his family when they visit from Las Vegas and review his medical record.” Garry said the software makes him feel more in control of his care and allows him to have “an intelligent conversation with (his) doctor.”
Apple is succeeding within the healthcare industry as they’ve approached it as a partnership opportunity, working with multiple technology developing companies (in contrast to Alphabet that launched Google Health and failed, due to trying to push their own app, rather than develop technologies in conjunction with other companies).
Since 2016, sales of Apple’s recent healthcare technologies has grown from 30 hospitals to 85 (in the United States). Apple is able to sell their technology via phone operating systems (iOS) by incorporating security and privacy features in their software, as well as including features that encrypt health data.


To grow their Watson Health unit, IBM purchased Truven Health Analytics in 2017 for $2.6 billion. Utilizing algorithms, Truven is capable of tracking claims, costs, and other healthcare data, and is the company responsible for the annual “100 Top Hospitals” survey, “which crunches public data to rank the performance of United States hospitals”, as it relates to current performance, and how quickly they can improve.

IBM has been growing their health unit for some time, having purchased Explorys, Merge Healthcare, and Phytel, prior to acquiring Truven, and has spent over $4 billion on “health-related technology and data providers” in 2017. Truven will provide IBM with a holistic set of healthcare technologies, including consulting, research, insights services, and data scientists.
IBM wants to use Truven’s technology to deliver “insights as a service”, as they want to acquire numerous sources of data. Further, utilizing Truven will increase IBM’s access to diverse types of healthcare industries, including hospitals, life sciences companies, and insurance providers. Among Truven’s 8,500 customers includes “25 of the top 25 pharmaceutical companies.”

Cisco & IBM

Cisco and IBM partnered to create a software called VersaStack, which helps IT organizations increase the efficiency of infrastructure and applications deployment. The technology utilizes the best assets of each company (network, storage, software technologies) to create a state-of-the-art technology. The partnership of Cisco and IBM is beneficial to both companies, as they’ve created a product that is stronger than others on the market, while also providing reassurance with proven success track records within both companies.

Medicat, which is the “leading provider of healthcare information technology (HIT) to colleges and universities” selected VersaStack as the technology that will control their SaaS solutions (utilizing the IBM Premier Business Partner Dynamic Group). Utilizing VersaStack will allow for faster data compression and automation capabilities for Medicat, and will free up time for their team to focus on client support, rather than back-end technology.


Microsoft has advanced its technology offerings in the healthcare industry by utilizing AI and cloud services and incorporating them into the UPMC care network, with its program NExT. Additionally, it is furthering its technology capabilities in healthcare with innovations such as HealthVault Insights and Health Chatbot Technology. Apple is making strides by strategically creating healthcare software in conjunction with technology developers, rather than creating an Apple-specific healthcare app, and IBM acquired Truven Health Analytics to grow Watson Health, as it provides further access to data analytics and compilation abilities. Cisco and IBM worked together to create the IT software VersaStack, which is being utilized by Medicat, the largest HIT provider to colleges and universities.