Welcome to the Cloud Clan

I’m watching ads during the ballgame (I watched the kick-off and the ads—the rest, not so much) and who should be declaring itself a “cloud solution” but Microsoft?!

See the ads here and here, in case you don’t own a TV or computer or newspaper.

OK, I’ve gotta admit my gut reaction was: Microsoft in the cloud? Seriously? But my next thought was…YES! FINALLY! I’m watching evolution unfold before my very eyes, and it’s oh so comforting to see others walking upright on two feet, using modern tools, and cooking their food.

What am I talking about? Well, let me explain. Gather round kids for a quick tour of the museum of ancient computing history. There will be time for a bathroom break later.

Here in the lobby is a giant diorama like you see in other ancient history museums. (For a larger version, click here.)

In the lower left corner, on four legs and covered with hair, is the software product (Latin, Rebootus-maximus). The Latin root designates high up-front costs and a low relationship between the maker of software and the benefits received by the user. Also, since maker and user sit on different instances of the application and can’t see what the other is doing, the only way this species ever evolves is through primitive gatherings called “user groups.” Here cave drawings are put on flip charts by pained customers and users thump their chests in desperate efforts to get future generations of software to improve.

Then, draggin’ the occasional knuckle but proudly waving a stick that he has learned to use as a weapon, is the ASP (Latin, Rebootus-less, Payus morem). Here, the Latin indicates higher overlap between buyer and seller and lower up-front costs. This is because the seller BUYS the software and the hardware for the users and rents the whole finished thing as a package. Ongoing costs are much higher, and, as before, the maker of the software and the user can’t see what each other is doing and have no shared responsibility for business outcomes. The ancient user group antics and chest thumping continue in this era, with a little less body hair.

Moving up and to the right from there, proudly wearing a helmet and a (smallish) chainmail skirt…and looking surprisingly like Marc Benioff…is the SaaS company! This is the first true use of cloud-computing. Here, the maker of the software maintains a single instance of software on the web. It is fully hosted in a web-native setting, and there is no cost for it. Ongoing costs for the users decline compared to the Payus morem species, but, most importantly, innovation happens at a massively higher pace with Payus servicum. The reason for this is that software maker and ALL software users are on the same instance of the same application. The programmers watch users suffer through bad reporting models or clunky workflows. The web-logs from these weaker members of the species flow through to the hive and are killed off quickly. Also, the idea of an “interface” becomes effortless. Meanwhile, species of applications can intermingle and cross-mate in a new tribal ritual called the Appus storem. The resultant functionality and reporting still has the data integrity of the original species, and the pace of innovation spikes as many tribes are unconsciously moving along the same path in different ways. While one or another version may be unsuccessful, it is easy for it to die without harming the tribe.

Finally, in the upper right corner, wearing a stylish sweater and looking like a more dashing and fully upright version of, let’s say…Jeff Bezos…is the cloud-based service (Latin: Payus resultum). Here the idea of the shared application in the cloud gets taken to another level. Now, other terrestrial things enter the cloud, like knowledge and work. The ongoing cost of the software has receded almost completely from view. Here the vendor sells only outcomes. The software sits in the cloud as a common “store” that customers enter to get their goods. For athenahealth, these goods are electronic medical records, medical billing services, and a patient portal. We’re responsible for keeping the fires burning with cloud-based computing and security and we also take on the hunter-gatherer work of processing documents, posting claims, tracking down payments, etc. We continuously inject knowledge into the cloud, tracking and updating payer and clinical rules, formulary requirements, and P4P program incentives for everyone at once.

That’s my tour folks. So now, I hope, you know what athena means when we talk about this newfangled thing called “the cloud.” And that’s where health care is heading—or being dragged kicking, screaming, and knuckle-dragging.

Welcome to the clan, Microsoft!

Jonathan Bush co-founded athenahealth, a leading provider of internet-based business services to physicians since 1997. Prior to joining athenahealth, he served as an EMT for the City of New Orleans was trained as a medic in the U.S. Army, and worked as a management consultant with Booz Allen & Hamilton. He obtained a Bachelor of Arts in the College of Social Studies from Wesleyan University and an M.B.A. from Harvard Business School.

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