Microsoft to transfer some healthcare products, people to new venture with GE

Microsoft is moving a number of its healthcare products and people to a new health-focused joint venture it is forming with GE.
Written by Mary Jo Foley, Senior Contributing Editor

Microsoft's sizable multi-year investment in the healthcare vertical market is morphing, as the Redmondians are moving a number of the people and assets they've acquired to a new health-focused joint venture formed with GE.

Microsoft has been buying up healthcare companies and technologies and hiring doctors and other healthcare professionals to work at Microsoft for the past several years. On December 8, Microsoft announced it will be transferring a number of those products, technologies and employees to the unnamed joint venture that will be located in Redmond, Wash.

Update: It sounds like everyone in the Health Services Group at Microsoft -- other than the HealthVault staff -- is going to the new joint venture. From a spokesperson: "Microsoft anticipates the majority of HSG employees will move to the new company, with the exception of the HealthVault team as they will remain at Microsoft. They are not sharing actual numbers."

Among the Microsoft technologies moving from the company's Health Solutions Group -- which Microsoft moved under the Microsoft Business Solutions unit in March 2011 -- are the Amalga data aggregation system for hospitals, and the Sentillion healthcare identity-management products. Microsoft is keeping its HealthVault personal health information cloud-service. The new Microsoft-GE joint venture will build applications that connect to HealthVault, company officials said. GE is contributing a couple of its healthcare software products to the new venture, as well.

Microsoft bought Sentillion in December 2010. Amalga is based on the Azyxxi assets Microsoft bought back in 2006.

Peter Neupert, Microsoft's Corporate Vice President of Health Solutions, is retiring as of January 2012, Microsoft officials told The New York Times, and won't be moving to the new venture, which will be running as of next year and staffed with 750 individuals from Microsoft, GE and elsewhere (pending regulatory approval).

Microsoft isn't completely exiting the healthcare vertical, company officials said. From the Official Microsoft Blog:

"Healthcare is one of our fastest-growing business segments – Microsoft has over 160,000 healthcare customers worldwide, and over 20,000 partners selling a broad portfolio of solutions on Microsoft technologies. We are more committed than ever to our healthcare customers and partners, and view this new joint venture as a great addition to our ongoing efforts."

But as noted in the update above, it sure seems like the Softies have decided to unload the bulk of its healthcare vertical, given it is moving the majority of the staff to the new joint venture.

Google decided to get out of the patient-record space earlier this year and announced plans to phase out Google Health.

Interestingly, GE has a similar joint venture in place with Intel, as my ZDNet colleague Larry Dignan noted.

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