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The Next Round Of Microsoft Vs. Linux: Health Care

Both camps are making waves in the industry, which is poised for dramatic IT growth

An industry that has long resisted IT automation got a double dose of medicine last week. Both Microsoft and backers of key open source initiatives laid out plans to push IT further into health care--plans that also put the Windows and Linux camps on another collision course.

Red Hat, the largest business Linux distributor, is teaming up with the health care sector's largest company, McKesson, an $88 billion-a-year pharmaceutical and IT supplier. Red Hat will provide a core of Linux and JBoss software geared to run McKesson's clinical applications.


A healthy revenue opportunity

A healthy revenue opportunity
McKesson's blessing of Linux isn't symbolic. Its health care IT group had $1.6 billion in revenue last year, and about 60% of U.S. hospital networks are customers. The company's relationships and sales force across the fragmented U.S. health care industry could fuel Linux adoption. Red Hat's deal isn't exclusive, and McKesson has partnerships with Microsoft as well. But it's sounding like a convert. "McKesson firmly believes that in today's health care, proprietary standards are over," says Michael Simpson, CTO of McKesson Provider Technologies.

Microsoft has some market clout of its own, and last week it introduced a lineup of health care-focused software. CEO Steve Ballmer predicted health care, despite its laggard reputation, will quickly embrace the tech-driven improvements that banking, retail, and travel have made the last few years. Health care "is one of the greatest opportunities our company has seen in basically our 30-plus years of existence," Ballmer told 24,000 health care professionals at the Healthcare Information and Management Systems conference in New Orleans last week.

Microsoft introduced its Connected Health Framework, an IT architecture blueprint that promises to let health care application providers build interoperable systems using a service-oriented architecture. Last week, it also announced it's acquiring a medical information search company, Medstory.

There are a lot of reasons to watch how health care puts IT to use, including how Microsoft vs. open source plays out. Foremost is that companies and consumers would benefit by IT-driven cost cuts and care improvements. But last week brought another wrinkle: The focus of open source products on a particular vertical market could foretell how the approach might be applied to other industries, and how Microsoft will react.

OPEN SOURCE ENTRANCE

Red Hat rarely takes an industry-specific approach like it is in health care; telecom is the only other industry it has tackled with similar focus. Beyond Linux, McKesson will help Red Hat's JBoss application server arm develop an enterprise service bus, which would make it easier to manage data exchanges among health care applications.

McKesson's own applications, designed to run different departments in a hospital, remain proprietary, but the foundation on which they run could become an infrastructure of open source code common to many hospitals. For the past 15 months, McKesson has been moving away from running its clinical apps on Unix and proprietary hardware from Hewlett-Packard, IBM, and Sun, and instead using AMD/Intel-based servers and Linux.

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