Microsoft drops US HealthVault profit plans

Microsoft has abandoned efforts to make profits in the US out of its “HealthVault” cloud computing system designed to store personal medical data, because of the complexity of the country’s health system.

Peter Neupert, corporate vice-president for health, told the Financial Times the benefits to Microsoft in the US of HealthVault was simply to “increase the brand relationship” by raising its image with customers as “important, critical and trusted”.

HealthVault provides a way for individuals to store details of their medical consultations, prescriptions and results of home-based medical monitoring in the “cloud” so it can be easily read, transferred and analysed.

Mr Neupert said Microsoft would not make any charge to US users because of the fragmentation of the system, with information managed by different health insurers and providers.

The decision highlights the commercial difficulties for software providers moving into medical applications – even in the world’s largest healthcare market with a high number of users with online access. The company has decided not to charge users directly for HealthVault in the US. Mr Neupert said the company had also resolved not to pursue sales from advertising or other revenue sources via third parties within the country.

Microsoft took the unusual step three years ago of making its coding for HealthVault open to competing software developers so they could provide applications for the system.

But it has also decided to reject its rival Apple’s commercial model of taking a cut on applications developed by others and sold through its “app store”.

Mr Neupert would not disclose how many Americans use HealthVault, but when asked whether it was “tens of thousands”, he replied “far more than that”.

HealthVault is generating revenues in some other countries, with Microsoft receiving financial sponsorship in Germany, Canada and Wuxi province in China. It continues to look for funding in other countries and regions to generate income.

In the US, it has charged some large users such as Medicare/CMS for its “blue button project” to help make their medical data compatible with HealthVault, but that move only generated modest income.

Mr Neupert said Microsoft was instead concentrating its business efforts in its health division in the US on the commercialisation of a separate product called Amalga, which helps hospitals in real time integrate data from across their different existing systems.

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.