QuadraMed should go open source

QuadraMed, a company with little new sales in all of 2005, has great untapped potential. They’ve got a product that customers seem to like (good KLAS rating and happy customers) but they can’t seem to compete with the big boys (stability and size) or the little guys (price and agility). Their stock has been depressed and their market cap is less than $60 million as of today. Now, they’ve been busy with management and other structural changes but there’s no reason to believe that they’re on an immediate bounceback trajectory (it’s too early to tell what new changes will be made).

Instead of hiring some high-priced strategists, here is my free advice (I hope someone from QuadraMed is listening):

  1. Open source the suite and let customers get the software free of up-front licensing charges.
  2. Create an open development platform for developers to add functionality and build a community of practitioners.
  3. Retool the marketing staff and let the open source model help proliferate the software and let the marketing team build open systems credibility.
  4. Get rid of most of the sales staff or refocus them on selling services and not licensed software.
  5. Purchase a few small HIT consulting shops and build a services model around the new open source software.
  6. Make money on services, consulting, customization, and interoperability with other HIT vendors’ software.

What if QuadraMed doesn’t do the above? Perhaps a few VCs or managers could get together and purchase the company and do it by taking the company private. They’ve got some decent technology that should be able to find a home. And, if you can’t make money in a hot HIT environment like right now how will they make money when everybody realizes it’s not 1999 anymore?

In case anyone from QuadraMed is listening, I live only 25 minutes from your Reston office and would be happy to advise you on the move to open source and how it can make you some significant money. 🙂

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9 thoughts on “QuadraMed should go open source

  1. I hope QuadraMed is sending the limo to pick you up for those consulting sessions as I type this!
    I agree they are well positioned to lead the open source medicine movement, but recent products like Affinity Radiology shows they don’t get it – there is a rising tide of open source HIT, especially in radiology. One only needs to look at the program for the upcoming SCAR Conference to see the emphasis. Beaumont Hospital in Dublin illustrates the potential. Just waiting for the Red Hat version to start…

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  3. DK, no limo yet :-). But, even if QuadraMed doesn’t “get it” they may be able to build a community around their products that does get it. That’s the whole promise of open source: one company can’t do it all but a community can (see RedHat that has thousands of devoted followers).

    Meneame, innovation is the cornerstone of open source. Without innovation, nobody wants the products (even if they’re free). I would challenge you to find any successful open source project (like their commercial counterparts) that don’t have some innovation.

  4. I believe innovation in health care is driven by clinician-scientists and polished by industry – this has been the standard for biotech/pharma and now starting in HIT (CAD – R2, PACS – efilm, etc). This innovation community is delayed in HIT because IT backgrounds are much less common than the traditional biochem/life sciences training. Community is key and those HIT groups that can build them up early will benefit tremendously. Some groups are already beginning to build that community – we just had Apple visit and present to our group.

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  6. Lance, good points at your blog. Here are some of my comments:

    1) Where are the visionaries? For horizontal, infrastructure-based software the visionary model works. But for vertical, non-infrastructure open source it’s not really necessary. Think about Asterisk, the best open source project for PBX systems. While it’s a highly successful and very useful (and making money for many people) it doesn’t have a household name like Linus or Larry Wall behind it. What’s necessary in vertical markets is not the same as in horizontal markets.

    2) How do we surround them with a core community? The same way that the VA did with VISTA: make the software part of the enterprise, then make enough enterprises use it, that everyone commits for corporate sharing reasons. Sure, it’s not going to be by hobbyists but the community will, indeed come. This is true of most vertical open source communities: not hobbyist-run but run by professionals who need the product to run their shops.

    3) How do we maintain clinical safety? The same way we do for non-open-source: transparency, code reviews, good requirements traceability, solid testing and simulations, etc. I think we’re ready.

    If you’re familiar with VISTA (and to a lesser extent MedSphere) I think the model has been somewhat proven (20 years of labor in a community environment but with billions of dollars in capital through contractors).

    I agree with you that it will take the next 6 to 10 years for open source in HIT to hit the enterprises (just like it took that long for Linux and Perl, etc to hit enterprises.

  7. Pingback: The Healthcare IT Guy » Health-IT vendors must consider Open Source

  8. I used to work at Quadramed in VA, and they don’t get it. They released products with out proper testing, further more they hire people who have no knowledge of computers and systems or working process in Hospitals. This is my thought, not being to sure what the future of the company would bring I had to leave, But I will say that the product’s like Affinity could be a great product if they placed there focus on only that product and only that. For a Hospital to run smooth it starts with the registration process and carries on to the clinical system. If they would focus on only that and not try to compete with the bigger companies like McKesson and Siemens they would have better sales or just a sale. Bring in better management and focus not on employees who have been there 5 years and focus on the CSR that are good with the clients then they could have a well oiled machine. Like the big companies but they seem to lack focus in the core area’s of business and focus more on what new product they can get out the door!

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