Health IT vendors should learn from Oracle, Microsoft, IBM, and MySQL

As most of us who follow the database world know, MySQL is the “little database that could”. For years it has been running millions of transactions across hundreds of thousands of websites supporting millions of online customers. MySQL AB, a tiny Swedish company with only about $20 million in revenue last year, now has so many customers and users that the Big 3 players have had to respond by releasing free editions of their software just to make sure they are still relevant for new or small projects. MySQL and other open source databases are often used in pilot or prototype projects at no cost but once the systems are developed people stay on them. Even the U.S. Federal Government’s GSA is standardizing on MySQL due to cost savings.

IBM, Oracle and Microsoft each generate billions per year in revenues from their database offerings but need to find a way to respond in a market redefined by open source competitors (which includes Postgres). So, how have they responded? Microsoft, IBM, and Oracle are all now offering “starter”, “lite”, or “express” versions of their databases for free. Of course, they are not being altruistic — they want to lock in developers of new (small) applications for low or no cost and when you build or purchase applications whose needs grow beyond their original expectations you’ll get slammed with some pretty big bills. The free embedded database model is great for Oracle/IBM/Microsoft, great for developers, but potentially a problem for customers due to lock-in. But, I digress. The Big 3 need to do this to remain relevant and they’ll do whatever is necessary to compete against open source competitors or each other.

What’s the lesson here? This month I’ve published several articles on how smaller players in health IT (or even larger players that want to enter the field entreached with competitors) can use the open source model to get access to markets that have been dominated by mega-firms. If a small company like MySQL can make Microsoft, Oracle, and IBM shake, rattle, and roll then the lessons can be applied to health IT by firms who do the same thing. Want to compete against Cerner, McKesson, Misys, and others? Try open source — it works for horizontal and infrastructure software, it will work for verticals as well. The lessons are clear from other parts of the computer industry; companies that ignore what’s going on will miss out on some great opportunities.

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5 thoughts on “Health IT vendors should learn from Oracle, Microsoft, IBM, and MySQL

  1. What are your thoughts on using open source in some of the more added value health IT? Open source seems like a great concept for infrastructure, where you can bill for support, security, etc. But do you think it is a reasonable strategy for other IT companies, like De-ID from a previous post or clinical trial software as an exmaple?

  2. If you look at MedSphere and ClearHealth there is a clear ability for vendors to supply open source clinical IT and administrative software. There’s nothing special about infrastructure versus vertical software from an OSS perspective. In fact, it’s much much easier to make customization, maintenance, and support money in vertical software because it’s not as commoditized and organizations are different enough.

    Take a look at the current revenues for most established firms and you’ll note that most of their money comes from support fees. Large up front license fees are required to keep a large sales force; take away the sales force and marketing money and now companies can afford to open source.

    For a fairly comphrehensive list of medical OSS, check out

  3. Your lock-in comment is right on. The reason Windows-based central station products are not available in high availability configurations is that the low cost embedded SQL Server license is superseded by a different license ($$$) when deployed in a high availability configuration.

    The result is a good example of the subjective nature of risk analysis that drives poor regulatory strategies. In this case medical device vendor’s risk analysis “forces” them to design and manufacture their own PCs but not offer high availability in a situation where server failure can leave critically ill patients unmonitored.

  4. Open source vendors should also learn to drop the all or nothing replacement to a windows client-server model. You can’t expect providers to simply drop a 30 year status quo to open source. There needs to be a stepped adaptability approach. For example, the inclusion of a LAMP stack (Linux, Apache, MySQL,Perl/PHP) on the same windows network to handle utilities that run alongside M$ SQL server is a start. One such solution is VMWare which has been out with it’s free VMPlayer which allows an open-source LAMP package to be installed on the same MS windows server/desktop. Its software virtualization has matured throughout the years. The only compromise is a slight speed decrease (ie. a real Linux P4 box would run in virtual mode as a Celeron) but everything else works including networking and printing.
    I bring this up because it would be nice for projects like freeMED or OpenEMR to build downloadable VMPlayer images for providers to get a real taste WITHIN their existing M$ environments.

  5. Faisal, this is a great idea. I’ll bring it up with my talks with OSS vendors and see how they respond. I think everything you said makes sense and now that VMWare is free (as well as the player) it should be pretty easy.

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