Salesforce Plans To Carve Out $1 Billion In Healthcare Revenue
By Jof Enriquez,
Follow me on Twitter @jofenriq
Salesforce Inc. is reportedly planning another foray into the healthcare market by hiring talent and initiating investments to help the company succeed in an increasingly crowded health services industry.
Citing sources privy to Salesforce’s plans, Reuters reported that the CRM and cloud computing company is targeting $1 billion in revenues from new health contracts. According to the sources, Salesforce is willing to push this initiative amid tight competition and despite its own missteps in healthcare in the past.
Per Reuters, Salesforce has been talking to industry experts to help carry out its ambitious plan, and “a LinkedIn search shows it has recruited over a dozen people from the health and medical device sectors.”
Moreover, the company is ramping up investments in the sector, and is “already selling new software to the Department of Health and Human Services and insurers including Blue Shield of California,” according to Salesforce executives not named in the Reuters article.
The company also recently announced an alliance with Philips to connect medical devices and equipment to its cloud computing platform.
Reuters said that Salesforce is also launching a new app called CareWeb Messenger with the University of California at San Francisco (UCSF), which is “built on top of Salesforce's technology, through which doctors, nurses and patients talk online and on mobile devices.”
According to Business Insider, Salesforce could sell the application to other hospitals after the initial roll-out in UCSF’s Benioff Children’s Hospital, named after company CEO Marc Benioff who made a $200 million donation to the hospital. The company could also get into the electronic health record (EHR) business like rivals Microsoft and Oracle, and eventually into “Internet of Things” (IoT) applications, which involve devices embedded with sensors connected to the cloud, according to BI. Health data from patients could then be evaluated with analytics technology developed by Salesforce.
In the Reuters report, Salesforce’s own track record with healthcare business plans casts some doubt as to whether this new venture into healthcare will be successful. Salesforce projects that failed to get off the ground include a hospital information system company and an EHR service. Also, even if Salesforce could satisfy federal requirements for meaningful use and data privacy, such as HIPAA and HITECH, it could find it hard to convince established vendors such as Epic and Cerner to share data.
“It's fashionable to have a health initiative but it will [be] hard for them to do something,” Kevin Spain, an investor at Emergence Capital, which has invested in Salesforce and health startups, told Reuters. “You need to have a thriving ecosystem of applications.”
Salesforce has not commented on its healthcare strategy, but Reuters reported that Salesforce healthcare chief Todd Pierce, formerly chief information officer at biotech firm Genentech, said that Saleforce will announce more of its plans in November.
Image Credit: “Salesforce Logo,” 2009 CC BY-SA 3.0: http://creativecommons.org/licenses/by-sa/3.0/