GloStream Seeks to Make Software Easy for Doctors to Use, Built on What They Already Know—Microsoft Office

11/22/10

Troy, MI-based gloStream calls itself the Microsoft Office of medical practice software. Yet in addition to emulating the business strategy behind Microsoft’s dominant desktop applications franchise, gloStream has actually built its software for doctors’ offices on the Redmond, WA-based software giant’s (NASDAQ:MSFT) technology.

There are thousands of companies that embed Microsoft technology into their software—and many that do this for healthcare applications. Yet I’m having trouble finding an electronic medical records provider whose fortunes are as extensively tied to Redmond as gloStream’s. A doctor can only buy the firm’s software from Microsoft resellers and partners, Mike Sappington, the firm’s CEO, says. And built on Microsoft Office, the company’s EMR and practice management software actually have Microsoft Word embedded in them.

GloStream certainly isn’t the first tech firm to hitch itself to Microsoft. The software behemoth owes much of its success to a network of thousands of companies that build applications on Microsoft technology platforms or provide sales and IT support of Microsoft products. But gloStream’s part in this network is worth noting because the firm is providing a way for Microsoft partners to become involved in a major surge in technology adoption among U.S. physicians.

The vast majority of doctors in this country rely on paper-based records to store and manage patient data. The federal stimulus last year included $19 billion to help spur adoption of electronic health records systems among physicians and hospitals. While the stimulus subsidizes doctors’ purchases of the software, the money itself doesn’t solve some bugaboos that have caused doctors to balk at electronic health records in the past. For one, the software can pose challenges to staff members who need to learn how to use it, and it can interrupt an office’s workflow, Sappington says. And doctors themselves are obviously busy people, who didn’t go to medical school because they wanted to spend a lot of time learning how to use new software that isn’t intuitive.

At gloStream, he says, the firm wanted to build easy-to-use software based on Microsoft Office, with which millions of people are already quite familiar. And the five-year-old company decided early on that it would use the thousands of Microsoft partners around the country to sell and support its technology rather than trying to do these things on its own. The firm also believes its strategy allows it to benefit from the billions of dollars that Microsoft spends on Office-related research and development, Sappington says.

The firm says that it is the only provider of EMRs and practice management software that has built Microsoft Office into its applications. Yet there are other health software providers that have also found Microsoft to be a viable technology partner. Greenway Medical Technologies, for example, uses the Microsoft .NET platform to enable its customers to gain remote Internet access their patient records.

Still, gloStream’s use of Microsoft Word has helped make its software more familiar to doctors and their staff, overcoming the major hassles that plagued earlier electronic records systems. “Where they’ve been successful is that the doctors install it, they turn it on, and they say ‘Oh, this looks familiar,’ and they go,” says Bill Crounse, senior director of worldwide health at Microsoft.

In fact, Microsoft once did a survey in the 2002-2003 time frame and learned that thousands of doctors were using Microsoft Office applications such as Word as an electronic health record of sorts for their practices, Crounse says. While Microsoft doesn’t endorse this specific use of Office, he says, it told the company that the familiarity of the applications was a major factor in doctors’ decisions to use it for storing patients’ data.

GloStream has found significant support for its strategy. The firm has raised $15 million from investors such as Farmington Hills, MI-based investment firm Beringea, Sappington, and angel backers. (Beringea is one of the largest venture firms in Michigan.) GloStream has 135 employees both here in the U.S. and in India. The company does not publish any user numbers or performance figures because it is privately held, the CEO says, yet he did say that the business is growing.

Sappington has been around successful IT companies before. He was previously the chief of operations for Netrex Secure Solutions, which was sold to a firm that was eventually acquired by the Armonk, NY-based technology giant IBM (NYSE:IBM). The founders of gloStream are Yaw Kwakye, the firm’s chief software architect, and Milind Ghyar, its managing director in India. Ghyar previously formed a firm in India to train people on Microsoft technology, according to gloStream’s website.

Of course, there are risks associated with building your software on another company’s technology platform. For instance, the platform could become obsolete or get discontinued. (Yet Microsoft, which launched Office 2010 in May, has clearly invested in the future of the Office franchise.) Sappington sounds quite comfortable with those potential dangers. “We believe that the benefits of partnering with Microsoft far outweigh the risks,” he says.

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