CRM Focuses on Healthcare

Healthcare provides a good business opportunity to information technology companies, a fact reinforced by Salesforce.com (CRM - Analyst Report). The company is investing in Practice Fusion, which is involved in the business of electronic health records, health policy, health information technology and consumer medical data topics. Salesforce.com will invest around $10.0 million for a marginal stake in the company, which will generate around $1.0 million of revenue a year for the company.
 
The cloud computing model introduced by Salesforce.com, uses online software solutions created by it. We believe that the advantages of the model are particularly applicable to the company’s clientele. In addition to the user-friendly interface, cloud computing typically lowers IT staff requirements. So medical practitioners and other professionals who prefer to manage the system on their own will find it particularly useful.
 
Under the new agreement, Practice Fusion’s EMR (electronic medical records product line) will be combined with Salesforce.com’s cloud computing system to enhance value for customers. We think the deal comes at an opportune moment because the federal government passed a bill earlier this year, including around $30.0 billion in incentives to medical practitioners and hospitals for buying and using electronic record keeping software. We believe this is likely to generate additional business for companies such as Salesforce.com, as most doctors currently use hard copies of medical records.
 
Wal-Mart (WMT - Analyst Report) is also trying to enter this segment, through collaboration with Dell Inc. (DELL - Analyst Report). Other big companies such as Google Inc. (GOOG - Analyst Report) and Microsoft Corporation (MSFT - Analyst Report) have launched personal health records storage systems, which are helping patients to store their own health data. We believe electronic health records provide significant business opportunities, as healthcare professionals are increasingly adopting the concept of a paperless office and recognizing the benefits. We believe that growth in this segment is inevitable, as electronic records becoming accessible from anywhere and at any time makes life easy for both doctors and patients.

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