Big Blue Points SaaS ISVs at Healthcare Market

IBM Corp. (NYSE:IBM) is urging its SaaS developers to take advantage of a $19.2 billion provision in the American Recovery and Reinvestment Act of 2009—otherwise known as the federal government’s $780 billion stimulus package—specifically allocated for IT investment and development in the healthcare market.

The Act apportions some $17 billion to incent doctors and hospitals to digitize patient health records and promote the development and use of other healthcare technology, and allots another $2 billion for IT-related grants and loans.

“Even before the economic stimulus, we’ve seen a steady adoption of SaaS within the public sector, but the Act has been a great catalyst,” said Dave Mitchell, IBM director of strategy and emerging business, ISV and developer relations.

To accentuate the healthcare market’s prospects, IBM is pointing to a study conducted in 2008 by the Center for Disease Control that pegged the adoption of digital record keeping by physicians at less than 40 percent. Another survey conducted last year of 2,700 doctors by the American Academy of Family Physicians revealed only 4 percent used digital records in their practice.

Prompting its ISVs to build industry-specific cloud services is relatively new for IBM, but the vendor contends that its strategy is sparked by the maturation of SaaS development in vertical segments and an open market opportunity. While the majority of IBM’s SaaS partners construct solutions across multiple industries, some 20 percent currently aim their solutions at specific segments.

“The absence of ownership of IT systems is increasingly being reduced as an obstacle, and benefits such as speed of access, cost and deferment of capital investment are making customers more accepting of the model,” Mitchell said.

Mitchell, who heads the company’s 250-member ISV SaaS Specialty group, said that despite the trend toward market segmentation, IBM has no plans to divide the unit by vertical orientation. Instead, it offers partners tools and resources that assist with “defining solutions by industry.”

Specifically, to help open doors into certain industries, IBM supplies vertical-market SaaS developers with what it calls industry frameworks, or solution sets that combine IBM products and services with ISV applications geared to address clients’ business issues. The frameworks also are employed by IBM’s direct sales team to approach enterprise customers in healthcare, financial services, telecommunications and retail.

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