Microsoft (MSFT - Free Report) recently partnered with Providence St. Joseph Health to migrate the latter’s health records from numerous data centers to the cloud. This apart, the company will develop new technologies and provide computing infrastructure and artificial intelligence (AI) tools to initiate the migration process.
Reportedly, both companies will start developing a tool to analyse clinical notes in cancer patients’ records. Moreover, the five-year partnership will allow clinicians and doctors to work in sync remotely and have equal access to patient information. This is expected to lead to better decision-making in patient care.
Notably, backed by strength in AI, machine learning and data analytics capabilities, Microsoft is leaving no stone unturned to penetrate into the healthcare market. As noted by Peter Lee, corporate vice president, Microsoft Healthcare, about 15 years ago, only less than 15% of health records was digital.
Moreover, per a TransparencyMarketResearch report, the global digital healthcare market is expected to witness a CAGR of 13.4% between 2017 and 2025.
The company believes that aggregation and consolidation of wellness-related data including health records, genomics and the likes will boost its business as health care organizations shift to the cloud.
Enterprise Healthcare Strategy Likely to Pay Off
Microsoft’s strategy to create a strong presence in the healthcare industry is different from other tech companies like Amazon (AMZN - Free Report) . The company does not yet intend to have its own end-to-end healthcare service business. Rather, unlike Amazon, which will soon launch Haven — its healthcare start-up — Microsoft is banking on strategic alliances to boost its foothold in the industry.
Notably, in April this year, Microsoft announced that it plans to shut down its personal health record system, HealthVault, in the coming November. Due to feeble customer engagement, little success could be achieved from the company’s consumer-focused healthcare strategy, forcing the company to take a different route for staying relevant in the healthcare space.
While Amazon and Alphabet (GOOGL - Free Report) are also raising the bar in the enterprise health market, Microsoft has been teaming up with healthcare firms for years, effectively warding off competitive pressures.
In January 2019, the company entered into an agreement with Walgreens Boots Alliance (WBA - Free Report) in a bid to offer innovative and cost-effective health care delivery solutions. The deal is expected to aid the company in delving deeper into the global healthcare supply chain management market, which per a Research and Markets report, is projected to see an 8% CAGR between 2018 and 2023.
Microsoft’s collaboration strategy has helped it establish a solid base among the U.S. health firms. Moreover, per Morgan Stanley as reported by Business Insider, more than 25,000 health organizations in the United States currently employ Microsoft Cloud. This puts the company in a position to upsell current clients and secure new relationships.
Microsoft currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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