Updated with additional details from Microsoft.

In a surprise joint venture between two corporate giants, Microsoft and General Electric plan to form a new health-care technology company, based near Microsoft’s Redmond headquarters campus, the companies announced tonight.

The new venture between Microsoft and GE Healthcare requires regulatory approval. The company doesn’t yet have a name. It would be established next year with about 750 employees to start, a Microsoft spokesman confirmed tonight. Employees will be drawn from GE, Microsoft and elsewhere.

Michael J. Simpson, a GE executive, will be the chief executive of the new company, according to a New York Times report that broke the news of the joint venture.

The new joint venture between Microsoft and GE will be “aimed at improving healthcare quality and the patient experience,” writes Nate McLemore, general manager of the Microsoft Health Solutions Group, in a post tonight.

Peter Neupert

Peter Neupert, who heads Microsoft’s health initiatives, is retiring from the company. Neupert, the former drugstore.com CEO, returned to Microsoft in 2005 and has worked at the company for a total of 18 years.

“As a recent empty-nester, Peter is interested in rebalancing his work and personal time,” said Lou Gellos, a Microsoft spokesman. “Peter will remain a full-time Microsoft employee through January 2012 and will subsequently work as a consultant to assist with the transition.”

The new company will “combine Microsoft’s deep expertise in building platforms and ecosystems with GE Healthcare’s experience in clinical and administrative workflow solution,” Microsoft’s McLemore writes, adding that the joint venture will “will develop and market an open, interoperable technology platform and next-generation clinical applications that will help enable better population health management.”

According to Microsoft and GE, the products and services that will shift to the new company include:

  • Microsoft Amalga, an enterprise health intelligence platform
  • Microsoft Vergence, a single sign-on and context management solution
  • Microsoft expreSSO, an enterprise single sign-on solution
  • GE Healthcare eHealth, a Health Information Exchange (HIE)
  • GE Healthcare Qualibria, a clinical knowledge application environment

Microsoft’s HealthVault personal data repository will remain part of Microsoft, but the new company will make applications that connect to and use HealthVault, according to the companies.

GE and Microsoft are also connected through the msnbc.com joint venture involving Microsoft and NBC Universal. GE is minority owner of NBC Universal following its deal with Comcast.

Comments

  • Guest

    There’s 750 people who will probably be thrilled to get out of either aging dinosaur.

  • Guest

    Congratulations to Microsoft on this historic partnership! The next time some mongoloid tries to tell me that Microsoft produces nothing of value or interest, I’m telling xem all about health care software and services.

    • Ballmerslatestfail

      Congratulations to Microsoft! I’m sure this will prove every bit as effective as MSNBC has, and create just as much shareholder value too! Oh wait…never mind.

      • Guest

        MSNBC is the most-watched liberal news station in the world. I’d say Microsoft made out pretty well with that deal.

        • Ballmerslatestfail

          MS no longer has any ownership in MSNBC and only partial ownership of MSNBC.com. So what did MS get out of all that investment again?

          • Guest

            Ownership of one of the most widely-visited liberal news sites in the world, Barry. Do I have to spell it out for you?

          • Ballmerslatestfail

            Minority ownership of a website that has Alexa traffic rank of 4,960th worldwide and 935th in the US. Yes, I would appreciate you spelling out the value of that for me. I know MS management and their apologists are loathe to do so, but the rest of business world works on the concept of ROI, using actual, quantifiable numbers.

          • Guest

            Microsoft makes $90 million a year for owning two-fifths of a domain name. As a media owner they also get to pick the President of the U.S., which is pretty convenient. Sounds pretty cushy to me, Barry.

          • Ballmerslatestfail

            Net or gross? How much have they invested to date? How much are they still investing operationally? Reputable unbiased source for any of it?

            Still waiting patiently for you to “spell out” something approaching an ROI analysis.

  • Kicker

    You did not mention how many people from both companies were immediately “downsized”. I have already heard from a few people about the layoffs at MSFT.

    • Guest

      Would you kindly mention how many people were laid off? I’m not aware of any Microsoft layoffs and I’m a very well-informed man.

      • Guest

        Maybe you’re next?

        • Guest

          Microsoft usually doesn’t fire people who don’t work for them, so I think I’m safe.

  • Me

    Layoffs as MSFT?  Not in the business being spoken of in this article.
    Check your sources

    • Bobsvg75

      You may be right… All the good people are long gone anyway!

      • Guest

        Yes there were layoffs. All on the QT of course. Basically all the people who would challenge GE’s “vision” of how to manage the quality management side.

  • Me

    This is exactly what we need! We need some companies to step up and bring healthcare IT out of the dark ages to catch up with the rest of society and technology advances. This joint venture sounds like it has the right players to do it!!  I’m excited about this frankly.

  • https://plus.google.com/107120449807229719531/posts David Abraham

    This is excellent, kudos to both companies

  • Anonymous

    Always happy to hear about new businesses starting the area. Good news.

  • Suesticazsky

    Ballmer is gifted at picking failure pros such as Nuepert to fail at multibillion dollars opportunities. So sad…

    • Guest

      “A people hire other A people. B people hire C people”

      • Bobsvg75

        Didn’t Neupert report to Craig Mundie? In that case is more like B people hire C people and C people hire F people.

        • Guest

          Working hard at keeping the stock flat for another 15 years I guess.

          • Guest

            That would be the optimistic scenario now. The more realistic one is that it falls heavily over the next few years as growth ends and decline ensues.

  • Anonymous

    That Ballmer dude seems to be really full of himself lately does he not?
    http://www.Ultimate-PrivacydotNet

  • Anonymous

    Ballmer really does seem to be way full of himself lately.
    http://www.Total-Privacy [dot] US

  • Guest

    So MS paid a lot of money to acquire Azyxxi and Sentillion as part of a big strategic push into healthcare, which sort of made sense since it’s a large and potentially very lucrative vertical. Then they invested a lot more in both, which again could be justified against the opportunity. And now they’re spinning them out into a jv?

    Do Steve Ballmer and Charlie Songhurst really think ramping up FlightSim is strategically smart, while continuing to invest directly in healthcare is stupid?

    It’s really despicable how much money MS’s management has blown over the last decade on failed ventures of one flavor or another. No wonder the company’s star has faded, along with its growth and value, and every day more are calling its future “bleak”.

  • http://twitter.com/iC clive boulton

    Ties to Microsoft hiring Hadoop committers for Windows Azure. May the Kobayashi Maru be with you.

  • http://www.facebook.com/people/Tom-Menino/100002188575868 Tom Menino

    Microsoft is just riding Jeffrey Immelt’s coattails since he is one of Obama’s insiders who gets sweetheart deals.  Immelt is a major Obama campaign donor, he is the head of Obama’s highly touted Jobs Council, he got a bunch of sweet deals buried in the Healthcare Reform Act to benefit GE, and only GE, including reduced healthcare costs and special opt-out provisions for GE employee health costs.    Once Obamacare is repealed as unconsitutional, and GE’s special insider status with the current administration goes by the wayside, this deal will atrophy and die.   And besides, the word is out that Amalga is already proving to be a non-starter outside the U.S. and MS has begun pulling back from it;  maybe this is MS’s way of jettisoning a bucket of FAIL into GE’s lap.  

  • Bobsvg75

    This news is all about Microsoft divesting from healthcare. They already sold Amalga HIS to a competitor a couple of months ago.
    http://searchhealthit.techtarget.com/healthitexchange/healthitpulse/microsoft-sells-assets-previously-known-as-amalga-his-to-orion-health/HealthVault is probably next.
    Peter Neupert’s lack of leadership and poor execution was nothing short of a disaster. What do you expect from a guy that bombed on OS/2, killed Drugstore.com and miserably failed even as a healthcare consultant to President Bush?

    • Chz

      Wrong about Amalga. It was the RIS/PACS platform that got sold. And that was in the works for a while.

  • Debby Spaldling

    Healthcare IT is a challenging market…highly fragmented, resource limited, and bureaucratic. GE brings a proven distribution (sales) network and Microsoft the technology edge. Both companies are wonderful places to build a career and with this new JV based is Seattle the talent draw is strong.
    As consumers of Healthcare, it is in our best interest to support and demand new and innovative solutions that this JV will bring to the market.
    Good luck to all involved !

    • ttp

      Seriously?  You must be joking.  How can you possibly say that GE Healthcare IT is a “wonderful place to build a career”?  GE Healthcare IT has a miserable, soul crushing culture.  They fundamentally do not understand the software business.  Their corporate top down culture cannot execute in the dynamic software market.  Their competitors are eating their lunch.  I expect no actual draw on talent as GE Healthcare IT has been shedding bodies for years.

      As a consumer in Healthcare, I seriously question whether health IT should be a for profit business.

  • Bill

     i work here at msft and i heard a biggggg rumor that they gonna move to china…

  • Jeffry Cole

    If Microsoft wanted to get real  traction ($Billion+ in Rev) in Healthcare IT then would need to compete with ISVs that build healthcare solutions such as GE. Balmer was smart to see that this was not a good approach to a fickle and difficult market. Brilliant move to align with a giant in Healthcare IT such as GE yet still participate on the upside that a JV brings.
    Good move for Microsoft shareholders and really good for the consumer that has suffered too long in a healthcare system that is badly in need of information systems. It still shocks at how backward the healthcare system is in information technologies…almost criminal in the lives lost that otherwise would be spared through IT. 

    • Guest

      Sorry, your argument doesn’t hold water. If Ballmer was smart enough to see the potential conflict, why did he embark on an in-house direct approach in the first place? This is a divestiture following a lack of success. Like Dynamics that was meant to be a $10b business by now and is 1/10th of that, this never developed the anticipated critical mass.

      MS will agree in a couple of years to give GE their share, and everything invested will have been lost. Once again MS shareholders lose.

      • Debby Spaldling

        I think Jeffry has it right. Healthcare IT is a somewhat unproven / immature IT market. Balmer took risk in applying resources, a sign of a good CEO, to a potentially large market but one not yet on par to Financial, Retail, and Travel sectors for example. With the continued risk (allocation of limited resources) relative to the potential return (in a defined time frame) a JV a this time was probably a smart move by Ballmer.
        This is likely a good example of Shareholder’s best interest in play and a good reason why Ballmer know hows to manage and make decisions in a multi-billion corporation. 

        • ttp

          “Unproven / immature IT market” is just code to cover the failure of either company to execute in this space.  It’s possible to be quite successful in this space as GE’s Healthcare IT competitors can demonstrate.  GE and MS are just both bad at this business.  I fail to see how combining two faltering companies will result in innovation or growth. 

          • Terry Borsich

            It always amazes me how uninformed critics of Microsoft are regarding the subjects they find him at fault. Their knowledge on the subject at hand is inversely proportional to their level of loathing for Microsoft. The annual spend on IT Healthcare is only slightly more than the IT spend on Agriculture and Education. Pretty sad for an advanced industrial society, but the truth none-the-less. In 2010, Financial, Government, Communications, and Manufacturing spent over $2 Trillion on IT – compared to only $80 billion by Healthcare. Gartner 2010 Worldwide IT Spending Report.
            Healthcare IT is an unproven / immature IT market. And for the Microsoft critics – it consistantly appears that a hallmark of your insight is ignorance.

          • ttp

            Lack of sales at GE and MS may have more to do with bad products and servcie than lack of investment.  Seems to me the market is speaking and while companies like MS and GE are left behind, companies like Epic continue to prosper.  Companies that build compelling products and deliver value will find ways to grow in any market.  Companies that don’t, pass the trash to a jv and walk home with their tale between their legs.  For its trouble GE has a big empty sack that used to contain 1B of cash.

          • Guest

            Yeah it looks good for Epic and Cerner right now. When the new device laws come into force, they will be hung out to dry. They won’t be able to release ANY significant changes to their software until they have a functioning quality system, which takes about 3 years. In their cases that’s mainly because they will have to start tracking, analyzing and reporting complaints. Best of luck to them.

            The more-compliant competitors are not releasing SW upgrades as quickly (leading to lower customer sat.). Just watch for the game changers. Slow and steady wins the long race, in this case.

          • ttp

            Lack of sales at GE and MS may have more to do with bad products and servcie than lack of investment.  Seems to me the market is speaking and while companies like MS and GE are left behind, companies like Epic continue to prosper.  Companies that build compelling products and deliver value will find ways to grow in any market.  Companies that don’t, pass the trash to a jv and walk home with their tale between their legs.  For its trouble GE has a big empty sack that used to contain 1B of cash.

          • Guest

            $80 billion is still a good sized market, even for a company the size of MS. Cerner, for example, has carved out a nearly $2 billion/annual business in this segment. You can accuse everyone you happen to disagree with of being ignorant. That doesn’t alter the fact that MS decided to invest here and once again wasn’t able to make a success of it.

        • Guest

          Recklessly spending money on poorly analyzed and worse executed ventures that have consistently failed is the antithesis of a good CEO. Ballmer’s record in that regard is unmatched, and this is yet another example.

  • Anonymous

    What a  disaster  this is going to be for the people. Two of the biggest and powerful corporations and  influential corporate lobbyists. In addition to many other areas (military, and they did design the Japanese nuclear reactor that blew), GE is also one of the financial giants, a leach on society. One important interest they have in common, is a strong desire world domination in their areas. If US citizens want to sign their life away to these corporate giants, they will need luck. I hope the rest of the world doesn’t sign away their health to these two.

    • E B

      fits for $hitty heath care, i.e. sick care.

    • Guest

      Ah, the sadness of the misinformed…who also conveniently fails to mention that Microsoft and its people (past and present) contribute more to social justice, healthcare and philanthropy than just about any other lobby you can name. As far as the lobbying that Microsoft does…let’s see… (1) education, (2) anti-piracy/fair competition practices, and (3) social enablement through technology. Not sure where you’re coming from.  

  • http://twitter.com/Shahbazalibaig Shahbaz Alibaig

    GE Healthcare and Microsoft comes together to make a remarkable difference in healthcare.

  • Henry

    Great to have more health innovation in Seattle.  Local developers who want the challenge and fun of smaller companies also have lots of other great options:  Limeade, Array Health, Clarity Health, Worksite Wellness, Group Health, many more too…

    • Chspkbn

      Nobody mentioned SQL will be the motive not Oracle :-)

  • Sharon O’Hara

    “The new joint venture between Microsoft and GE will be “aimed at
    improving healthcare quality and the patient experience,” writes Nate
    McLemore, general manager of the Microsoft Health Solutions Group,”

    YES!  As a formally physically fit healthy person until 1997 – the one thing I’ve learned is the patient is usually ignorant of how best to help themselves AND few caregivers explain or discuss it with the patient.
    We are given an appointment card for the next doctor visit and prescriptions – not information.

    Dr. Raghu, Pulmonary Dept. UW Med.Center recently reminded me he remembers when I first went through the department I believed I was dying.  That was ten or so years ago.  The University of Washington Medical Center is a place of remarkable individuals tending even more remarkable minds of curious thought and wonder as they work to solve medical mysteries.  Their brains do not screech to a halt beyond the perimeters of their specialty, the lungs.

    Christopher Goss, MD – once Dr. Raghu’s Super Fellow – has and is still – working with me to solve the various medical conditions that began with Chronic Obstructive Pulmonary Disease COPD

    The patient ‘experience’ should be one of educating the patient.

    My hometown newspaper, the Kitsap Sun allows me to write a patient reader blog, COPD and Other Stuff and I thrill to the future patient education with this new enterprise – Good for you, Microsoft and GE!

  • Sharon O’Hara

    “The new joint venture between Microsoft and GE will be “aimed at
    improving healthcare quality and the patient experience,” writes Nate
    McLemore, general manager of the Microsoft Health Solutions Group,”

    YES!  As a formally physically fit healthy person until 1997 – the one thing I’ve learned is the patient is usually ignorant of how best to help themselves AND few caregivers explain or discuss it with the patient.
    We are given an appointment card for the next doctor visit and prescriptions – not information.

    Dr. Raghu, Pulmonary Dept. UW Med.Center recently reminded me he remembers when I first went through the department I believed I was dying.  That was ten or so years ago.  The University of Washington Medical Center is a place of remarkable individuals tending even more remarkable minds of curious thought and wonder as they work to solve medical mysteries.  Their brains do not screech to a halt beyond the perimeters of their specialty, the lungs.

    Christopher Goss, MD – once Dr. Raghu’s Super Fellow – has and is still – working with me to solve the various medical conditions that began with Chronic Obstructive Pulmonary Disease COPD

    The patient ‘experience’ should be one of educating the patient.

    My hometown newspaper, the Kitsap Sun allows me to write a patient reader blog, COPD and Other Stuff and I thrill to the future patient education with this new enterprise – Good for you, Microsoft and GE!

  • Trav

    It’s sad to see something that “Pre-Microsoft” was a great idea and helped streamline healthcare in multiple hospitals get turned into crap. When I worked for MedStar Health, the focus was about “helping people” and leaving the world a better place. However, “Post-Microsoft”, it was all about profitability. So much so, that all of the engineers were placed organizationally under the SALES department. Who does that? What a “demotivator” to have to sit in on weekly sales calls that discussed nothing but potential sales and potential profits and GREED! Previously, the message that motivated and energized the former 40 person “Azyxxi Team” was all about how we improved quality of life and were doing great things to change the world. After the acquisition, Peter Neupert was such a legend in his own mind that he didn’t bother listening to anyone who had a good idea. He was a freaking “know-it-all” who knew NOTHING, including how to inspire people. He was so arrogant and worried that Craig F. Feied knew more than he did, that he did everything in his power to undermine and usurp Craig’s authority. If Craig F. Feied, (who was one of the inspirations behind this awesome product) had been put in the VP role, the world would have been a much better place and Microsoft would have been able to claim success for helping change the world in a positive way, rather than having another dismal failure. The REAL problem with Microsoft is the everyone at the top is so busy kissing each other’s asses while drinking the Microsoft Koolaid, that they think they can TELL customer’s what they want, rather than LISTENING and developing things that customers want and need. This was not the last time I ran into this mentality. I was on another project where I couldn’t even stand to be NEAR the Microsoft employees and their subsidiary company employees who were trying to market a new product. They were rude and obnoxious towards their potential customers, couldn’t agree among themselves in meetings with the same potential customers (which really instills confidence), and they were all just arrogant and full of themselves. When we gathered for dinner, these supposedly successful people were all BRAGGING about how they mistreated, talked down to and walked all over other people. They were trying to top each other’s stories. THAT attitude, and a lack of any real innovation is the reason MSFT stock will continue to SUCK in the $20’s or maybe $30’s while AAPL breaks $700 a share with innovative products that people actually WANT!

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