by Vince Kuraitis
(Reprinted with permission from: http://e-caremanagement.com/platform-failure-and-success-lessons-from-outside-healthcare/)
Healthcare is just starting down the road of adopting platform technology and business models. What lessons can we learn from other industries?
A recent article by Andreas Constantinou in Vision Mobile blog provides guidance. The article lists a Dead Platform Graveyard from the past 10 years — you will probably recognize some of the names: Meego (Nokia/Intel), Palm 5/6, Symbian OS (Nokia) WebOS (HP), Windows Mobile (Microsoft). Blackberry RIM is a candidate to make next year’s list.
Software platforms have failed for a combination of reasons:
- Cost of ownership
- Conflicting revenue model
- Lack of network effects
- High adoption barriers
The author also provides great lessons and guidance as to what DOES work:
a company with resources, processes and values routed in the PC or Internet world where developers, not OEMs are the platform’s primary customer.
This is an important lesson that healthcare has yet to grok. In 2010 a number of health IT companies announced that they were opening up their EMR products with an API, but we haven’t heard much since then. Why? The healthcare HIT mindset has been much more “If we open it up, they will come”. That’s not enough. While opening up a product to outside developers is a necessary step, it is not sufficient.
This week Greenway announced that they are opening up their EHR to outside developers. Let’s watch to see if they get the lesson here.
due to the billions of dollars in investment needed to build a stable and advanced software foundation, while attracting developers to the platform.
How will this apply in healthcare? The companies listed in the article are national/international tech or telecom giants. Many healthcare platforms will be built around local, regional markets — so it won’t necessarily take billions of dollars. But…the general lesson of needing deep pockets still applies— building a platform won’t be cheap. If you think of an ACO as a platform, the AHA estimated $11–25 million in startup costs.
Think “ecosystem”, not just a product
But the secret sauce is neither in DNA or money; it’s hidden in Stephen Elop’s famous burning platform memo : ”Our competitors aren’t taking our market share with devices; they are taking our market share with an entire ecosystem”
The secret sauce behind the success of iOS and Android is how thanks to network effects (the closed loop driving users to developers and developers to users) platforms have managed to generate billions of external investment, both in the form of developer investments (time/effort) and operator investments (subsidies).
It’s network effects that have created near-insurmountable barriers to entry for Microsoft who despite boasting 75,000 WP7 developers achieved only one million sales of its flagship Lumia model from its strategic partner Nokia.
And whatever Bada, Tizen or any other alphabet-soup-chef tries to conjure up, they should never forget that you can’t buy developer love. You can only plant the seeds. That’s why Facebook Platform is following exactly the right strategy: take a vibrant developer community and offer it a new addressable market.
Healthcare has a VERY long way to go here. For example, “ecosystem” thinking is big shift from the product mindset, technical architecture, and business model of EMR software vendor Epic:
We CONTROL EVERYTHING from our bunker in Verona,Wisconsin. All the coders live here and the software is developed here. We never acquire outside companies because we would just have to rewrite the code from scratch. You want to connect to our proprietary “product” architecture? Good luck, we’re not going to make it easy for you. We control things so much that we have our own employees staffing the cafeteria, doing lawn maintenance, making travel arrangements. Next on the list of insourcing — we’re going to start manufacturing our own pencils (just kidding on this one).
Learn more about implications for healthcare at the inaugural eCollaboration Forum at HIMSS12!