My favorite State Fair treat is Lemonade Shake Up. I have memories of drinking it at various county and state…
The Red Hat folks e-mailed right before HIMSS, saying they are big HIStalk fans and asking to run a "Mr. HIStalk Shoe Shine Booth" from their booth. Darned if they didn’t, too, with real professionals buffing and polishing the shoes of attendees who sat high up in an old-fashioned chair right there in their booth. I didn’t know much about the company, so an interview seemed like a good idea. I talked to VP Dave Nesvisky, who’s been in healthcare IT for many years.
Tell me a little bit about you and what you do.
I’m fairly recent with Red Hat. I was brought on in September of ’07. The intent was to have my past experiences brought to bear Red Hat to lead a vertical team. To be able to go deeper into lines of businesses is to actually have people that understand those businesses. I’ve been in healthcare IT, sales, and sales management for about the past eleven years. Prior to that, I was working in the public sector sales and sales management for fifteen years.
I’m an old dog. I’ve been around 25 years in technology. I always joke with the young bucks in inside sales about selling 200 meg disk drives for $10,000 and mini-computers with a meg of RAM the size of a washer-dryer. They look at me like I’m talking about propeller aircraft and buggies and stuff like that.
Now I’m in infrastructure. I’ve been in databases and middleware applications. So I’ve seen quite a few things; had some good experiences and some good relationships. I thought I could help out Red Hat and they obviously thought the same thing.
Summarize the offerings are that are available for healthcare.
Most people, when they think of Red Hat, they think of Linux. Actually, we have a tremendous range of offerings for healthcare.
Our MetaMatrix technology can extract data from clinical systems to provide a single, real-time view of patient data. This is a horizontal product designed to federate disparate data models. Whether the data is stored in flat files, relational models, other types of data stores, the data models can be pulled to this central point in MetaMatrix and you can create new data models using the existing data models. You can synthesize data and repurpose it for new applications.
We think the opportunity in healthcare in unbelievable when you think about all these disparate applications, all these ancillary systems and so forth; and the opportunity to pull these things together to give more complete and comprehensive information at the point of care. It has tremendous opportunity affecting patient safety and accuracy. What’s interesting about it is it is not a data warehouse, so it’s not storing the information in the second place. You don’t have the synchronization of data issues between the source system and the second source. It really literally creates a virtual database and presents it to an application, but you can cache the information. If one of your source systems drops out for some reason, you have a contingency plan to get to it.
MetaMatrix is the crown jewel in our SOA platform, which also includes all the JBoss components, pieces of middleware, rules, web servers, portal development, and things like that. Dropping down below that is Red Hat Enterprise Linux, which has a lot of capabilities: virtualization, I-O management, and clustering, and also IPA, which is security to help with control and auditing for who has access to what systems and so forth. We’ve also added a high performance messaging component that was co-developed with a lot of partners called AMQP, which is a high performance messaging standard which can be easily adapted to handle HL7 messages. It’s a big stack.
So how do you go about selling this to a hospital?
Obviously the dynamic of healthcare is most of the applications that are run by IDNs and hospitals are purchased ISV applications. There are hundreds and hundreds of vendors that provide the technology to healthcare, so a lot of our focus is around working with ISV partners. You’ve probably read about the things we’ve been doing with McKesson, GE, CPSI, and Sentillion. There are literally dozens of companies that are adopting our technology to their work.
When you start talking about MetaMatrix, it gets interesting. It represents a tremendous opportunity for ISVs to take advantage of the technology and pre-integrate some of their products and repurpose some of their existing applications to offer their customers this new, synthesized clinical view. It’s also an opportunity for health systems themselves to take MetaMatrix and, if they have a robust enough IT staff, to take advantage of this technology on their own.
Most of what I’ve heard about Red Hat in healthcare has been because of McKesson. What’s the scope of that relationship and how interested is the McKesson client base in using Red Hat products?
McKesson has adopted what we’re referring to as the Red Hat Enterprise Healthcare platform, which is Red Hat Enterprise, Linux, the JBoss SOA middleware, and the Red Hat Network Management. So it’s the complete stack of Red Hat open source infrastructure. It’s now the standard platform for McKesson Horizon Clinicals solution suite and certified for all scales of their delivery. So, it’s not just for small hospitals — it’s certified for use up and down the line for them.
What are the benefits to McKesson customers?
They probably used some proprietary Unix boxes by the vendors that you typically see. There’s a tremendous cost advantage moving to Red Hat Enterprise, Linux, and JBoss in a suite like this. If you think about it, all these capabilities that we’ve packed in — it’s all open source software. There isn’t a license fee associated with any of the software.
We charge an annual subscription that covers maintenance and updates, much like other software vendors charge annual support. The difference is proprietary vendors charge an upfront license fee, so it’s a big capital expense.
Our software is designed to run on commodity X86 and AMD hardware, so you can shop for the most bang for the buck from a hardware perspective. Because all of our various components are integrated, like the virtualization and the clustering and so forth, we can offer a one-stop shop for training to get administrators and other users trained on the system at one place, at one time, whereas they would have to have hopefully one person, sometimes multiple people, being sent to different training classes by different vendors for all these different components.
On top of that, because of the possibilities in virtualization, they can cut down on their server count tremendously. The cost of the servers goes down because you use fewer of them. People are thinking green these days. It decreases power consumption; it decreases cooling requirements; it decreases requirements around floor space.
You’re getting a tremendous capital expense advantage moving to Red Hat because you’re not having to spend as much on the hardware and the infrastructure software. You’re gaining even more over time in operating expense savings because of training and because of all the power, cooling, and space requirements that you’ve reduced.
The beauty of it is that people aren’t sacrificing anything in the way of reliability and security. In fact, most of the articles that have come out, and most of the studies that have been done, have shown that, from the security perspective, open source software is usually more secure than proprietary software The reason is everybody can see the code bugs; they’re detected early; they’re fixed early; the ramp time between a problem and vulnerability being detected and being closed out in open source is dramatically faster than a proprietary system. And from a reliability perspective, people are consistently impressed with the uptime they are getting with the systems.
There was a study done by Florida Hospital. You can see they’ve had tremendous experience with the reliability of Linux. They are drawn in by the cost savings, but gained high reliability and availability.
What about relationships with other vendors?
We have a number of Epic shared clients. We have a very good relationship with InterSystems. We frequently do information sharing and joint engineering work with InterSystems to optimize Cache’ on a Red Hat platform. We have a number of clients that are running Epic in their shops on top of a Red Hat platform very successfully.
We talked about McKesson, but GE PACS has actually been on Red Hat even longer. In fact, if you look at a survey of the PACS vendors out there, most of them run or at least offer the ability to run Red Hat Enterprise Linux.
Has anyone run the numbers to know how much money clients are saving?
Some of the numbers are staggering. I’m almost reticent to talk about them because they almost seem ridiculous, but I think we can very comfortably say people will have life-cycle savings in the order of anywhere from 35-40% upwards of 50% on infrastructure by going to a Red Hat platform over a proprietary platform. I think that’s a very comfortable number.
I see 40% time and time again. That’s a lot of money. The beauty of it is that it’s good for everybody. Obviously it’s good for Red Hat because they are using our technology, but it’s great for the client because if they’ve budgeted 40% more, lets say, that 40% can certainly be applied to other projects. It returns an investment pool of the client that they can then use on projects that they want to use it on.
It’s great for the ISV, Independent Software Vendor, because a lot of times they are trying to fit into a budget. By offering an infrastructure that costs that much less, rather than them having to discount their software aggressively to meet the budget of the client, they can roll in with an infrastructure that’s every bit as secure and reliable as what they had before. They can discount, not their product that they make their money on, but something that’s basically just a cost item for them. You know, the hardware and infrastructure. And if in fact it’s returning an investment pool to the client, that vendor actually has a better opportunity to sell them maybe an additional application or two with their investment. So it works out to everybody’s advantage.
Hospitals have always been capital-constrained, so if you can move costs into the operational bucket, that should be popular.
That’s the big thing. It’s an operating expensive because it’s an annual subscription for support of the software.
Is the retirement of the DEC/HP Alpha, which was big in healthcare, going to provide opportunities?
Yes. That’s a great opportunity for us. Those were tried and true, very reliable hardware, but it’s cycling out. That’s where our opportunity come up. They lease their hardware and when their leases are up, they look at, "OK, what’s the latest and greatest? What’s faster and cheaper?" And where they are making that look, we have a great at opportunity to introduce them to what we’re doing and save them shocking amounts of money.
It is sometimes a chicken-and-egg sort of thing with a lot of the vendors because the client isn’t looking for Red Hat because their vendor doesn’t support it yet. On the flip side, the vendor isn’t interested in adding another platform because their customers aren’t asking for it. So we’re working on bringing both sides together.
A lot of our job right now is in education and explaining to people. Because they’ve come out of a very reliable environment with the Alphas and the HPs and so forth, they can’t afford to sacrifice reliability and security, so a lot of our job is explaining about open source and about Red Hat and giving them some proof points about reliability to get everybody comfortable with it.
How much technical training is needed?
It’s a very straightforward transition from Unix to Linux for the ISV applications. They make their migration in a very straightforward way.
Red Hat was #1 in value among CIOs in a recent survey, even beating Google. How do you use that to get people’s attention?
That’s exactly one of the points. Folks in healthcare want to know that it’s been done before. You talk about mission-critical applications; healthcare is the most mission-critical app. Hospitals don’t close. Things happen around the clock. They can’t afford to take a risk and I absolutely respect that. Demonstrating value and reliability that’s proven in other industries and within healthcare is really important. Having that CIO survey show that, four years running, we’re the most valued technology company, that says a lot. That resonates with them. They respect that.
Beth Israel Deaconess has gone with Red Hat. What’s their experience been?
Things are going every well for them. Dr. Halamka is a pretty vocal advocate of Red Hat Enterprise Linux. He’s got a great quote about finding an operating system without the virus of the month, without patches, without downtime created because of so much feature creep, and so forth. He was able to find that answer in Red Hat Enterprise Linux. He comes right out and says he’s getting the security, reliability, and cost reduction that he’s looking for. He’s going to be a speaker at an upcoming user conference that we’re having June 18-20 in Boston.
If a reader is interested in learning more about Red Hat, would the conference be appropriate, or is it geared to existing users?
I think it’s definitely a place for folks who are just starting to dip their toes into using open source in their environment. It’s definitely the place where you want to start. It’s where you can get all the information you need to have that happen and to really get some basic information abut open source, showing the reliability, showing that it’s a proven technology and not as risky as you might think.
It’s a good fit for both the business representative of a healthcare system as well as a technical person. Clearly a technical person would love it because they get exposure to some cutting edge technologies. We always trot out some new things there for people to look at. From the business side, it gives people the opportunity to ask the hard questions about, "How are you really using this?"
I always get a lot of questions about what’s going on in financial services because they have such high throughput and large-scale systems. We always have people representing these other industries that you can talk and share thoughts with.
What’s you sense about open source healthcare applications?
People are running open source and don’t even realize it, like Apache or Tomcat. They’re in everything. People are using open source all the time never thinking about it. It’s very reliable. Then when we raise the visibility of it up and say, "OK, these systems are going to run on Red Hat Linux" and they run them for awhile and they run great. All of a sudden, that opens the door to say, "We’ve had challenges with interoperability and other things. What else is out there?"
They’re willing to take a look at projects like WorldVistA. Open Health Tools is doing some great stuff. I would like to think that Red Hat has a position of thought leadership in open source; that our opinion is valued in the community. When we go out and tell folks, "It’s ready for prime time," we can help guide people and take advantage of their open source applications.
You mentioned the SOA in healthcare. Everybody talks about it. Do you think that’s going to make a significant difference?
Yes. If you asked ten people, "What is SOA?" you’d get ten definitions, anything from web services all the way up to full-blown architecture.
Every system in healthcare has some common elements that repeat from system to system. Whether it’s the core clinicals or what have you, there are always some components of it that repeat. The ability to take those repeating components or services and build new systems using them makes common sense.
The software we use is not a new concept. Its been around a long time. The difference now is, when you can take advantage of open source tools and look at the source code, you’ve got much better visibility into what you’ve actually built and the ability to share it. Before, people would build software, but it would be proprietary and enclosed. To be able to reuse that package, you had to guess what was in there.
With open source, you can look at it and understand exactly what it is, how you can repurpose it, and what pieces you need to change to take advantage of it. It gets you a huge head start on building new applications. It’s a terrific opportunity. Open source and open standards make the timing right for SOA to be a legitimate strategy for healthcare IT.
Most open source organizations don’t have the resources that Red Hat has to get that message out. Do you feel that Red Hat should advocate for them?
We do, because we believe in the open source model. There’s opportunities for the typical core ISVs that you see out there to take advantage of bits and pieces and embed it in their own applications. Just in the same way that McKesson is taking advantage of our technologies to build their applications.
I can foresee where some of these open source projects will move up the stack and take advantage of some of those components as they build the next generation of their product. I’m not speaking from absolute knowledge about McKesson’s strategy is, but in general, I see ISVs certainly taking a look at what’s out there. If it can accelerate their development cycle and allow them to deliver more software more economically, of course they’re going to do it.
The whole idea about open source is you’ve got lots and lots of contributors. You’ve got more people pouring their work into code than any individual company could possibly hire. You could big the biggest software company in the world and they don’t have as many developers as the open source world does. The whole idea is for large communities to come together and take advantage of what’s been built.
How would you say the culture is different at Red Hat from the healthcare vendors you’ve worked for?
One thing that’s pretty funny. We have an internal e-mail address called Memo List. Basically it’s just freeform. In any other company, there’s such a tight control around sending e-mails, their legal this and that. This memo list — people are asking questions about recipes and where to travel. It’s like a freeform forum inside the company that goes on.
There’s a tremendous amount of commitment and passion around open source. This place — you eat it, breathe it, sleep it. That’s everything here — the community involvement. Open source -– very, very passionate about it. In fact, we run all open source products internally. Stupid me, I had a Mobile 5 phone. I came in here and I said, "Can I get push e-mail for this?" They looked at it like it was some kind of Satan or something. They wouldn’t support that Microsoft phone. They were going to perform an exorcism on it, I think.
There’s just this unbelievable, single-minded purpose around advocating open source. So when you get back to your question about other open source projects and open source products out there, I’m just speaking from my perception of the company, we feel this obligation to help anybody that believes in open source to help them be successful. Red Hat has got 80% of the paid Linux market. With that kind of market share and brand visibility, we think we can help these companies become influential.
How many employees does Red Hat have?
I think we have about 2,500.
As far as healthcare then, what’s your structure going to look like to operationalize this vertical market strategy?
I’m working hard to hand select sales reps that have been in healthcare. That’s always the first question when you go into sell something in healthcare: "How long have you been in healthcare?" and "What do you know about healthcare?" Customers play stump-the-band with you to make sure you’re legit, because I guess they’ve seen companies come in and out of healthcare before. They want to make sure you’re serious.
I’ve selected some people for the team that have deep roots in selling in healthcare. They’ve been in the business north of 20 years in healthcare IT. They know what they’re doing.
On the product management side, we’ve got a mix of folks. Some folks that have deep healthcare subject matter expertise and other folks that obviously have deep Linux and middleware and product-specific expertise. We’re cross-training each other. We’re trying to build both strength and knowledge in healthcare inside the company, and at the same time, cross-training these healthcare veterans with a depth of understanding of open source and the Red Hat product line so we can hopefully present the best of both worlds to our clients.
Our solution architects, which are our technical folks, are typically doing the deep dives on technology with the clients. Explaining it, demonstrating it, and so forth. They all understand the technology very well. We’ve been spending a lot of time working with them; talking to them about healthcare and the unique requirements in healthcare IT; getting them in front of a lot of prospects and customers; letting them do a lot of listening to be able to a more relevant technology recommendation to them. The more they understand about healthcare, the better off they’re going to be and the better off everybody’s going to be.
Is there anything else that we should talk about or that you would like to mention?
I gave you the shout out that we’re HIStalk fans over here.
I appreciate that.
Hopefully you got a shoe shine at HIMSS?
I just had to walk by and talk it all in. It was kind of strange to see even my phony name up on a shoe shine stand.
Our Fake Inga was equally popular. People liked taking that five-minute break and getting a shine. It was great.
We’re delighted by the enthusiasm we’re receiving in healthcare. Frankly, the reason that pulled me into Red Hat is it just seemed like an absolute perfect fit. Here you’ve got this very reliable and secure and scalable environment that you can offer to an industry that’s always so cost-constrained at such a much more reasonable cost than what they’ve been used to paying. It just seemed like natural fit. And now, as we work with these ISVs, there’s obviously advantages to the as well.
The other thing that we didn’t really talk about, but that we’re very involved in, is working with standard bodies and groups that are working towards things. We are lending a point of view to that and encouraging those projects as well.