|
TELECOMS AND SOFTWARE NEWS
|
|
|
IBM acquires Initiate Systems to strengthen healthcare solutions
Cornelia Wels-Maug
IBM acquires Initiate Systems to strengthen healthcare solutions
Last week, IBM announced the purchase of Initiate Systems, a leading US vendor in the master data management (MDM) space, for an undisclosed sum. The move was well-timed given that in the US alone the federal stimulus programme is about to boost the market for electronic health records, which will also drive demand for master patient index (MPI) solutions. This move underlines IBM's seriousness in the healthcare field and shows that it is prepared to go vertical in MDM. The purchase will also intensify the current wave of consolidation in the MDM market. An excellent strategic move - and timely The US government's Health Information Technology for Economic and Clinical Health Act (HITECH), with its $36 billion stimulus for the healthcare sector in general and the adoption of electronic health records and health information networks in particular, is too good an opportunity to be missed. IBM's acquisition of US-based Initiate Systems for an undisclosed sum was therefore timely. Initiate had revenues of approximately $100 million in 2009 and claims to be a leader in MPI technology. Its MDM software enables organisations to have accurate and complete realtime views of data spread across multiple systems or databases. At the core of the HITECH legislation lies “information exchange for care coordination”, an area that forms the heart of Initiate's solution. Hence, IBM's latest acquisition - which is its tenth in the MDM space since October 2003 - should catapult it into a position to secure a good chunk of this stimulus money and the burgeoning potential in other geographical markets. By creating a composite view of a patient or provider, this move has the potential to significantly improve the sharing of information across multiple agencies, increasing operational efficiency and improving patient outcomes due to better quality of care. Initiate brings strong assets into this marriage. It has a proven customer integration platform - it claims to have the largest number of productive, live customers, 100 of its estimated 200 customers. Furthermore, the vendor has a well-established presence in the healthcare and public sector. Initiate serves more than 2,400 healthcare sites and 40 health information exchanges (HIEs), although the company has also expanded into other verticals such as financial services, high-tech, manufacturing and retail. Good news for end users, but not without hazards
The acquisition is also good news for end users. Although the actual integration of Initiate's solution into IBM's product line will take more than a year, users can immediately harvest the emerging synergies with IBM's existing information management products, such as its knowledge base of industry models, governance, BI & performance management tools, and identity and management tools. However, in order to take advantage of those synergies, extensive systems integration work with IBM products is often required, which comes at a heavy price. It is unknown how willing the market will be to pay to integrate its core systems to IBM's InfoSphere products. With its strong global presence, IBM can also take Initiate's technology into new markets and provide services around it in as yet untapped markets. Being acquired by a large player such as IBM also raises the question of whether Initiate will be able to unfold its potential under the large IBM umbrella, or whether it will wither and sink into oblivion alongside the multitude of applications in IBM's broad portfolio. This will be a test of how well IBM integrates small but high-performing companies. Like most vendors, IBM has a mixed track record here, but our vote is for the positive. Acquisition is part of an ongoing consolidation trend in MDM
IBM's latest acquisition is the third in the MDM space this year, following Oracle's purchase of SilverCreek Systems and Informatica's acquisition of Siperian. This acquisition will put further pressure on IBM's competitors. Will this force Oracle to make a bigger move in the healthcare sector - after all, it only recently purchased Sun Microsystems, which also offers an MPI solution? It will also be insightful to see Microsoft's reaction - its Health Solutions Group is active in the HIE market with Amalga UIS. There are also still some independent MDM vendors out in the US market, including Datactics, Kalido, Talend, and Visionware. The question is, for how much longer?
About:
This article is an extract taken from Ovum's Straight Talk service. This daily email bulletin provides our expert's views and opinions on important news and events in global IT and telecoms. If you have a comment or question regarding this article then please submit your details here:
If you would like to find out more about Straight Talk please contact StraightTalk@ovum.com
If you would like to find out more about Ovum services then please click
here for details
|
|
|
|
|
|
|
|
Search
|
|
|
|
|
Contact Us
|
|
|
Expertise
|
|
|
|
|
