Editor’s note: This guest post was written by Dave Chase, the CEO of Avado.com, a patient portal & relationship management company that was a TechCrunch Disrupt finalist. Previously he was a management consultant for Accenture’s healthcare practice and founder of Microsoft’s Health platform business. You can follow him on Twitter @chasedave.

As healthcare goes through massive changes, health system CEOs would be well advised to study what newspaper industry leaders did (or perhaps more appropriately, didn’t do) when faced with a similar situation. In the late 90′s, the following dynamics were present:

Owning printing presses was a de facto barrier to entry allowing newspapers unfettered dominance. Newspaper companies bought up smaller newspaper chains and took on huge debt. Newspapers were comfortable as oligopoly or monopoly enterprises allowing for slow, plodding decisions. Their IT infrastructure mirrored this with expensive and rigid technology architectures. Newspaper leaders knew full well that dramatic change was coming and even made some nominal moves, but didn’t fundamentally rethink their model. Depending on one’s perspective, it was the best of times or the worst of times to be a leader of local media enterprise.

Before long, owning massive capital assets and crushing debt became unsustainable. The capital barrier to entry turned into a boat anchor while nimble entrants created a death-by-a-thousand-paper-cuts dynamic. Competitively, newspaper companies mistakenly worried about other media companies or even Microsoft, but their undoing was driven by a combination of craigslist, monster.com, cars.com, eBay, and countless other marketing substitutes for their advertisers and there were easier ways to get news than newspapers. Generally, the newspaper’s digital groups were either unbearably shackled or marginalized so that the frustrated digital leaders left to join nimble new competitors. The enabling technology to reinvent local media didn’t come from legacy IT vendors who’d previously sold to newspaper companies, but from “no name” technologies such as WordPress, Drupal and the like.

The parallels with health systems today are striking. Consider the present dynamics:

Until recently, complex medical procedures had to take place in an acute care hospital setting. Now they are being done more and more in specialty facilities that can do a high volume of particular procedures at a much lower cost. [See article graphic.] Health systems have been aggressively buying up other healthcare providers and frequently taking on debt in the process. At the same time, health systems often have capital project plans that equal their annual revenues even though no expert believes the answer to healthcare’s hyperinflation is building more buildings. Consider the duplicative $430 million being spent in San Diego to build two identical facilities just a few miles apart as Exhibit A of the problem. Looking at the history of other countries that shifted from a “sick care” to a “health care” system, more than half of the hospitals closed. They simply weren’t needed or weren’t appropriate. Just as newspapers were implementing multimillion dollar IT systems while nimble competitors were using low and no cost software to disrupt the local media landscape, health systems are similarly implementing complex systems to automate the complexity necessary in a multi-faceted system. Meanwhile, nimble competitors are implementing new models at a fraction of the cost and time. For example, it’s well-known that a healthy primary care system is the key to increasing the health of a population. Imagine if a fraction of the 100’s of millions being spent by mission-driven health systems on automating complexity was redirected towards the reinvigoration of primary care. The pace and scale of innovation at most health systems isn’t up to the enormity of the task. The vast majority of health system innovation teams are constrained by how they have to fit innovation into an existing infrastructure. That approach rarely leads to breakthroughs, as its true intent is to make tweaks to a current system rather than a rethink from the ground up.

Compared to newspapers, the scale and importance of the challenge is far greater for health systems so they must aggressively take action or risk their future viability.

Prescription for Healthcare From a Newspaper Industry Executive
In the midst of the newspaper industry carnage, there is one particular bright spot from an individual who has gone against the conventional wisdom that newspapers are doomed to fail. His name is John Paton and he’s reinventing local media. I’ll highlight some of what he’s done to turn a bankrupt (financially and creatively) enterprise into a profitable, dynamic and rapidly growing enterprise attracting the all-stars of the industry.

There has been an expression in traditional media that analog dollars are turning into digital dimes. Rather than lament that, here’s John Paton’s response:

“And it is true that print dollars are becoming digital dimes to which our response at Digital First Media has been – then start stacking the dimes. All of that requires a big culture change. A change that requires an adoption of the Fail Fast mentality and the willingness to let the outside in and partner. Partnering is vital to any media company’s growth whether it is an established media company or start-up. We are going to marry our considerable scale with start-up innovation to build success.”

It’s worth noting that those “digital dimes” are often more profitable than the “analog dollars” of the past because much less overhead is required.

The following is John Paton’s 3-point prescription for reinvention that led to a 5x revenue increase and halving of capital expenses. This resulted in his organization going from bankruptcy to $41 million in profit in two years.

Speed to market: One new product launched per week [See Related Article: The Rise of Nimble Medicine] Scaling opportunity: Sourced centrally, implemented locally. Ideas can come from all over. Identify the best ideas/people from all over Leverage partners – Feed the firehose of ideas from outside.

Unfortunately, before John Paton was able to affect this level of change, scores of newspaper employees lost their jobs while traditional newspaper executives dawdled. It is the rare leader that can create the sense of urgency necessary to affect this scale of change before the enterprise is a hair’s breath from extinction. As the old oil filter ad says, “you can pay now or pay later” – of course, the cost is much greater if change is put off. The only question is whether health system leaders will have the courage to make the change before the inevitable crisis hits with full force.

Applying Reinvention Lessons into Healthcare
The following are some ideas and examples of how this approach can be applied to tackle the enormous challenge facing health system leaders. [Disclosure: The company where I’m CEO, Avado, provides enabling technology for some of the organizations mentioned which is why I have a view into their projects.]

Fresh, Outside Perspective is Imperative
As John Paton brought in outside advisors such as Jeff Jarvis and Jay Rosen, health systems would be well-advised to do the same. They can go a step further and partner with innovators driving new models. They can be project managers or partners. Examples follow:

Mike Berkowitz has been a pioneer in telehealth including running his own business, Telehealthcare.com. Large and small healthcare providers are hiring him to develop and implement their telehealth programs. Dr. Samir Qamar founded MedLion as a mass-market version of primary care. MedLion works with healthcare providers to transition from a “do more, bill more” model to a patient-centric, accountable model that is affordable yet produces impressive outcomes and a dramatically better bottom-line than a standard practice. Ken Erickson is the CEO of Employer Direct Healthcare. He’s working with providers to deploy bundled case rates. That is, rather than getting scores of bills from various providers and the accompanying morass, they enable a single, transparent cost for procedures. This also enables healthcare providers to tap new distribution models for their services.

Communication is the Most Important Medical Instrument of the Future
John Paton has demonstrated an unprecedented level of communication in redefining the culture of his organization. This approach has set the tone for his organization. Imagine if that tone was set by healthcare leaders for their organizations. I have heard it said that between 80% and 93% of what a doctor says to a patient is forgotten. In a world where provider reimbursement is based on outcome, rather than activity, this is a recipe for reimbursement disaster. Communications is the antidote to that avoidable disaster.

Like local media executives in the late 90’s, healthcare leaders can view the present situation as either the best or worst time to be in their role. The health system leaders who believe it’s the best of times would do well to ask WWJD – What Would John Do? John Paton demonstrates how a strong leader can reinvigorate and reinvent a lumbering giant into a nimble organization.

Related articles
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Moneyball for Medicine – Business Models for Healthcare

Back in 2009, my colleague MG Siegler wrote a brilliant piece titled ‘Keep It Simple, Stupid,‘ which delved into how having a simple and easy to use product is a key formula for winning in the consumer tech space. A few days ago, Greylock Partner John Lilly echoed MG’s thoughts, explaining that simplicity is quite simply very hard to beat. While this doctrine has been applied to consumer technology products like Dropbox, Gmail, Twitter and most famously, Apple; reinforcing simplicity in the product thought process is becoming an ever-present part of enterprise technology as well.

Almost every pitch I receive for an enterprise product, whether it be in the business intelligence, big data, storage, or even virtualization space, includes the key phrase, “this product is extremely simple to use.” Part of this is the fact that many of these products are based in the cloud, which adds to the whole consumerization of the enterprise trend that is taking place.

But the enterprise is taking this a step further than just putting applications in the cloud when it comes to actual design and ease of use in the user experience. Take cloud storage giant Box.net, for example. The startup and its CEO Aaron Levie have been preaching simplicity in the enterprise for some time now. As Levie writes, complexity “serves as an easy – but ultimately blameless – scapegoat for failed deployments and lagging user adoption.”

Box’s drag and drop interface, which allows users to simply store and save files, avoids the complexity of many legacy options. The UI is clean, uncluttered and interestingly, Box hasn’t been in any rush to add bells and whistles to the product besides security and collaboration features. In fact much of the complexity exists behind the product, where the user doesn’t even interact.

Another area where simplicity is ruling is business intelligence. Splunk, which just filed its S-1 for an IPO, has been able to make a real business out of simplifying IT logs. Newcomer to the space, Domo, also promises a dead-simple interface for analyzing massive amounts of IT data.

Accel partner Ping Li agrees that the best enterprise applications in today’s world hide the complexity of the business processes running on the backend. He believes that while Apple has influenced  consumer technology in the design and product areas, the iPhone and iPad creator is also having a big impact on the enterprise. “Steve Jobs made phones and computers easy to use, and we’re seeing the Apple-effect bring simplicity into the enterprise,’ he explains. Li points out that the iPhone and iPad are complex products when it comes to the internal hardware components but on the exterior, are incredibly simple to use.

PandoDaily’s Sarah Lacy recently wrote, there’s a new guard of entrepreneurs who are starting enterprise companies. Sarah says the ‘consumer kids’ have started creating enterprise companies, and are part of the consumerization of the enterprise. And these entrepreneurs are approaching the product for a simpler, more user-friendly point of view.

But developing these basic UIs for complex problems in the enterprise is a huge challenge. As Lilly writes, “It’s devilishly tough to build complex systems like software that actually show as simple interactions.” It’s something that Apple has mastered, and a number of enterprise companies are starting to catch on. Startups like WibiData, GoodData, and Code 42 are providing simple ways for enterprises to perform a variety of important and in-depth functions on the back-end, such as analyzing user data for personalization efforts, or developing hybrid storage solutions.

We’re also going to see more and more startups that are tackling even more complex enterprise interactions like virtualization, and creating extremely simple ways to take care of these problems.

Enterprise software is by its nature complex, but the user interface doesn’t need to be. We are all consumers of information, whether at work or at home. Any designing software needs to think about how to make it a joy to use and get people to use it repeatedly. Keep it simple, and we’ll keep coming back.

Photo credit/Flickr/bjornmeansbear

Editor’s Note: This guest post is written by Nir Eyal (@nireyal), a founder of two startups and an advisor to several Bay Area incubators. Nir blogs about technology and behavior design at nirandfar.com.

Reading Leena Rao’s recent article on Techcrunch about the personalization revolution, you get the sense that the tech world is waiting for a bus that isn’t coming. Rao quotes well-known industry experts and luminaries describing what needs to happen for e-commerce to finally realize the promise of personalized shopping, a future where online retailers predict what you’ll want to buy before you know yourself.

Ironically, Rao and her pundits are missing the zooming racecar that’s speeding by them as they wait for the personalization bus to arrive. That racecar is Pinterest and the new breed of startups marking the beginning of what I call the “Curated Web.”

The promise of personalized e-commerce began over 10 years ago with technology pioneered at Amazon. It was then that the mental dye was cast for what eCommerce personalization would look like, an algorithmic solution for matching customer to products. Web watchers came to expect that someday all online retailers would have such algorithms on their sites and the dream of personalized
commerce would finally be realized.

For over a decade, startups took their best shot at making this apparition a reality. Companies like Hunch tackled the data collection piece of the equation, asking users endless survey questions to determine their tastes and preferences. Google’s Boutiques.com tried to crack the challenges of structuring the data associated with personalized shopping recommendations. Ultimately, these attempts failed.

In September, Google shut down Boutiques.com and the founders of Hunch sold their company to eBay, an outcome far short of their IPO hopes. Previous attempts at eCommerce personalization were unsuccessful because those involved failed to realize they were missing one key element, the interface. Curated Web companies are defined by their ability to use new interfaces to collect and structure data better then previous algorithmic solutions.

Users Want it All

While the tech world waits patiently, expecting the solution to e-commerce personalization to look like Amazon ported to other online retailers, “Curated Web” companies like Pinterest are changing the game by changing the interface. Pinterest will be the first company to nail eCommerce personalization because they understand the importance of having an interface, which matches what the user is there to do, discover stuff they like from across the web. Pinterest has cracked personalization right under everyone’s nose by doing the two things Rao says have yet-to-be invented, data collection and data structuring.

Collecting Data, One Pin at a Time.

Pinterest is becoming the web’s personalized mail-order catalog. Each user is presented with a one-of-a-kind visual interface based on their tastes. They are presented with any product, from any retailer, anywhere in the world. The items they see are curated through people and topics they’ve identified as interesting and what is shown to them improves the more they interact with it. Every time they pin, re-pin, like, or comment on an object, the relevancy of the products displayed on their magic catalog improves. This is what personalization looks like, effortless, simple, social and fun. It’s the interface, stupid.

“Big deal?” you say. “Facebook can do this!” No, they can’t. Social media is for selectively sharing information about you and Facebook is built for presenting yourself in the way you want to be seen by others. Facebook is, by design, about creating a network of relationships and sharing with them selectively. This brings up all kinds of privacy concerns, which reduce the flow of content creation and sharing to limited circles (Yes, I said “circles.” Don’t even try it, Google).

Pinterest has no such restrictions. Pins are inherently open and there is no expectation that anything shared is private. It’s a community built on individuals acting in their own self-interest to capture and collect things that interest them. Facebook and Google+ are just not the right interfaces for capturing and collecting products, and attempting to discover new products amid the newsfeed clutter is hopeless.

Making Sense of the Data

To some, the rise of the Facebook “like graph” foretold a personalized future, where retailers could utilize data collected from what users “like” to serve targeted recommendations. Here, Rao is spot on about why Facebook fails to provide useful data on users’ tastes; it lacks structure.

What does it mean if I “like” something on Facebook? Not much. “Liking” a brand or even a specific product, doesn’t provide useful information. If I “like” Babies’R’Us, does that mean I like the brand, a specific outlet, a product I found there, or am I just hoping to get a coupon? From a personalization perspective, it’s pretty low-value stuff. There is no structure to correlate my actual likes with my Facebook “likes”.

However, Pinterest solves the data structure problem brilliantly. You’d think they’d need some fancy photo recognition technology to tag a handbag by color, make, and model, but I doubt they have any such technology. Pinterest doesn’t even try to solve the data structure problem because they don’t have to.

Again, it’s the interface stupid. By presenting users with a dynamic catalog, and tasking users with the job of deciding whose tastes they’d like to follow, structuring image data becomes irrelevant. Pinterest simply has to make sure the magic catalog appears, tailored to each user’s stated preferences. It’s doesn’t matter if Pinterest knows a thing about what’s in each image on a pin board; what maters is that it’s curated by the user and the user likes what they see. If they like the products, they’ll buy them, and Pinterest laughs all the way to the bank.

So while the rest of the web is waiting for the personalization bus to arrive, Pinterest, and perhaps a few other fast-moving Curated Web companies, will be far ahead. It’s clear, given Pinterest’s astounding growth that e-commerce personalization is here to stay, even if it looks nothing like what you imagined.

Note: I have no affiliation or investment in any company mentioned in this post.

Excerpt image from ClickeCommerce.com

Editor’s note: Alan S. Cohen is Vice President of Marketing at Nicira. A 20-year IT veteran, Alan has held executive positions at Cisco, Airespace, Tahoe Networks, IBM, US WEST, Coopers & Lybrand, and the Department of Energy.

Change in the air. It’s palpable.

Those of us in the technology world are witnessing a transformation: A buyer-led revolution in how information technology is both produced and consumed. Smartphones and tablets are upsetting the PC order; social applications are impinging on traditional “workforce productivity” and communications applications.

And the infrastructure, the underlying electronic “institutions” that make all of this happen, are also undergoing a transformation that promises to reshape the boundary conditions of all the participations. The wave of disruption powered by virtualization, and now, cloud, is rapidly and dramatically reshaping how companies and organizations of all sizes purchase IT and who sells it to us.

Said simply, for the first time in a generation, information technology’s supply chain is in the state of serious disruption. It truly is an “Arab Spring” for the IT world and when it’s over, there will be a host of new companies driving enterprise technology. Don’t believe me? Let’s establish some historical context.

Most revolutions take time. There are always early revolutionaries who pave the way for the change in the system. Although we chart the Arab Spring to events in Tunisia just over a year ago, the underlying currents driving change in the Middle East are decades in the making. In our industry, the antecedents are also more than a decade old. VMware, the early power player in compute virtualization, was founded in 1998. Salesforce, the first big SaaS player, was founded in 1999. The iPod, the progenitor of the contemporary smartphone, was revealed publicly in 2001.

For those tuned in to IT’s golden oldies channel, there was a transformative revolution in the 1970s. It was called the PC.

At the center of these revolutions and disruptions, you will find end users who have a simple mantra: “We want what we want, when we want it, to get our jobs done.” Employers have to meet these goals. Yet their job can be doubly difficult: Companies and organizations are frequently locked into existing IT approaches and are now told to do more with less. Business leaders around the world are demanding that the current model of IT, one that has led to a multi-trillion dollar per year industry, become more responsive to their twin goals of business velocity and efficiency.

But today, at the beginning of what historians will someday call the “as-a-service” era of technology, there is a new mantra for Enterprise IT: Faster, cheaper, and pay only for what you use.

If IT providers do not supply what the end users want, the latter, like the brave individuals who took the streets of Cairo, Tunis, and Tripoli, will take matters into their own hands. Most often, the initial transformation happens as “shadow” IT. Bring your own device is shadow IT. Most SaaS applications start by bypassing IT and going directly to functional groups (managing sales through Salesforce or sharing through Box.net).

Think about it: Less than five years ago, people were questioning whether the iPhone was ready for the enterprise. In 2012, Apple is expected to sell $19 billion worth of iPhones and iPads to the enterprise, making iot the 25th largest IT vendor in the world. How’s that for a shadow IT movement?

Now it’s time for infrastructure. If IT does not provide the end user with the infrastructure they need, the latter can rent it, by the hour or month from companies like Rackspace or Amazon. All you need is a credit card and no approval from IT. What is powering this change? Software. Software will be the new hardware.

Like the Arab Spring, traditional powers in IT clearly know about the change that is underway. However, as with so many Middle Eastern heads of state, half-measures toward meeting end user requirements will not be enough. Adding a cool interface to onerous applications or a software stub to a piece of stubborn “iron” will not appease the end users.

In our world, it’s change or lose your franchise. Maybe that’s why Andy Grove knew only the paranoid survive.

Embracing rapid change is not the usual modus operandi for many IT superpowers. The need for top and bottom line growth, and the scrutiny of public markets, does not make changing your business model on-the-fly the easiest task. If you are a multi-billion dollar IT player, how do you explain to your installed base, “Guess what, everything is going to change?”

But if you are in IT, you have to ask yourself: What side of history will you wind up on?

Yammer grew like crazy last year. How crazy? Product VP Jim Patterson just tweeted out the Yammer 2011 Year in Review infographic below with the comment: “Pretty much everything tripled.”

Paid seats went from 300,000 to 800,000, total users went from 1.6 million to 4 million (2.5X growth), and employees went from 80 to 250. Also, all told, 200,000 companies are using Yammer, including 85 percent of the Fortune 500 (and TechCrunch). We just can’t quit you (although we’ve tried).

Some of these stats CEO David Sacks already shared with us earlier, and he also told us that sales tripled. But the 800,000 paid seats number is new.Yammer is in the process of raising a large $40 million round.

Editor’s note: This guest post was written by Dave Chase, the CEO of Avado.com, a patient portal & relationship management company that was a TechCrunch Disrupt finalist. Previously he was a management consultant for Accenture’s healthcare practice and founder of Microsoft’s Health platform business. You can follow him on Twitter @chasedave.

Image is courtesy of Wikimedia Commons.

I know of no industry where technology is as despised as it is in healthcare. It’s telling that it took government money to incentivize healthcare providers to finally do what virtually every other industry has done — apply information technology to streamline processes. “Established technology is being given a federally funded new lease on life,” athenahealth CEO Jonathan Bush said. “Traditional health software now is on Medicare, being kept alive like grandma.” Bush dubs this program as the “cash for clunkers” program for health IT leaving no doubt what his opinion is regarding the legacy vendors’ solutions.

While one might dismiss this coming from a company with a dog in the fight, the feeling is nearly universal amongst doctors who are the most important users (besides patients who are almost completely ignored). Perhaps the best evidence of how abysmal legacy healthIT is, is that even the market leader is having trouble getting medical practices to adopt their software despite huge subsidies from large health systems. In the course of discussions with large health systems, they often proudly shared the deployment of a mega EMR and how they were offering subsidies to affiliated physicians to adopt the same system. When pressed about how broadly it was being adopted by non-employee physicians (i.e., MDs who have a choice), the penetration was staggeringly low — 2/10 of one percent was the average of those who shared figures. This was despite the fact that they were subsidizing 85% of the cost (the maximum allowed by Stark Law).

When I’ve spoken with physicians who have rejected the entreaties from their affiliated health systems, it’s more than the expense (even after a massive subsidy, it’s still several thousand dollars plus monthly costs). Rather, the complexity and lack of user friendliness is the bigger driver.

HealthIT Vendors Reflect Flawed Reimbursement Model
All of this begs the question, “why is HealthIT so bad that massive government and health system subsidies are required to drive adoption?” And how can this possibly be good news? Let me address the issues and then I’ll conclude with the good news. While it may seem easy to bash legacy HealthIT vendors, my experience has been that vendors reflect their customers. I would take this a step further. In the case of healthcare, customers reflect the reimbursement model. It’s a reimbursement model that is so broken Americans pay nearly twice as much as other countries to get inferior outcomes.

The “do more, bill more” reimbursement model in the U.S. has been at the root of healthcare’s hyperinflation (fun fact: while what we spend on all other goods and services has increased 8x since the 60′s, healthcare costs have skyrocketed 274x). The byproduct is a focus on activity rather than value/outcome, the primary IT focus has been how you can get more bills out faster. Despite the fact that most physicians call the patient the most important member of the care team, in reality, the “patient” as architected into most HealthIT has been little more than a vessel to attach billing codes to.

More recently, there’s been a drive to add so-called Patient Portals to involve the patient. However, these have been more driven by marketing objectives than truly rethinking the care delivery model. Making the patients central in a system designed for optimizing billing is even less likely than Yahoo or Microsoft surpassing Facebook in social networking. Both require a different architecture from the ground up. As I wrote earlier, EMR portals are like driving a 747 to the grocery store — it can get you there but it’s going to be far more expensive and complex than necessary.

Convoluted Decisions Processes Have Killed Great Products
When I’m asked why I didn’t get back in to healthcare sooner, I share with them a story from my past. I was at a well recognized hospital implementing their patient accounting system and we needed to decide the unique patient identifier scheme. It’s an important decision, but they were in year seven of debating what the new scheme should be! It may seem like an absurd example, but it’s indicative of how interminable and almost crazy the decision processes can be in a health system. It virtually guarantees that the only companies that can survive those processes are incumbent vendors — breakthrough young companies die on the vine waiting those processes out. If you wonder why MUMPS is still widely used in healthcare, it’s because old vendors, and old technology persists in healthcare.

Separation of Consumptive User and Economic Buyer
The role of Chief Medical Informatics Officer (CMIO) is relatively new and long overdue. The idea is a senior level physician plays an integral role in IT decision processes. However, there are still many scenarios where the people who will actually use software are a great distance from those who pay for the software. In other industries, the rise of SaaS software has closed or eliminated this gap where you see individuals and departments not waiting around for IT to pick something that they don’t want to use. Rather, they can directly contract with the technology company. This has only just begun in healthcare.

There was a parallel scenario 10-15 years ago when multi-million dollar CRM implementations from companies like Siebel weren’t embraced the way Salesforce.com has been embraced today. A key driver of this is the user of Salesforce.com is often only a step removed from the purchaser.

One Item For Which HealthIT Vendors are Fully Responsible
Most of the items above put the root cause at the provider level. However, there persists one insidious practice. There are various ways to ensure customers stick around as long as possible — lock-in or loyalty. Successful SaaS businesses are built on the loyalty model. Rather than holding data hostage or locking customers into long agreements, they believe that the more freedom you give customers, the more loyal they become (assuming you deliver the goods). In contrast, there’s still the old model of lock-in used in many HealthIT vendors. For example, they make it expensive and/or difficult to get access to data in a system to keep any in-house or 3rd party built system from being integrated. These vendors pull it over on naive customers by telling them that it’s a ton of work when it’s only a ton of work if that vendor is incompetent. Like escaping an abusive relationship, healthcare providers must take action or else they reward that behavior.

The Good News

Tectonic shifts are underway. Smart healthcare providers are trying to avoid making the same mistakes newspaper companies made in the late 90′s. For those of us used to the convoluted, interminable decision processes of the past, it is breathtaking to see the decision processes of today. As I detailed in the Rise of Nimble Medicine, not only are entrepreneurial ventures popping up like weeds, healthcare providers are getting far more aggressive about trying new models without doing the equivalent of organizing the Roman Legions.

Naturally, when a project is hugely expensive and will take months to implement, it’s going to lead to a longer decision process. However, the principles we see in agile software development, are spreading to healthcare delivery. I’ve seen scenarios, such as in telehealth, where the time from initially seeing technology to moving into implementation takes less than a week. The startups that are adept at finding the nimble organizations will have great success. The reward for healthcare providers in rationalizing their decision processes is they will no longer have to settle for rigid software that is difficult to implement.

The best news for healthtech startups is that, by definition, legacy HealthIT is optimized around the flawed reimbursement model of the past. The disruptive innovators instinctually know that they will either have to build their own software (if there isn’t off-the-shelf software) or they can work with software companies that allow them to be nimble. There is universal agreement that anything less than a fundamental redesign of healthcare will fall short in solving the most important problem the U.S. and the world faces — spiraling healthcare costs.

Related story:
Money Ball for Medicine – Business Models for Healthcare

Numecent, a stealth startup building a patented “cloudpaging” technology, just raised $2 million in Series A funding from undisclosed corporate investors. The $2 million tranche is a part of a larger $10 million funding round, and is in addition to the $7.5 million in seed funding the company has already raised from private investors. Exact details as to what Numecent is developing are not known, beyond a general description of what “cloudpaging” means, as provided by the company.

The term “cloudpaging,” says Numecent, refers to a specific (and patented) “push-pull” paging technology which allows software instructions and data to be demand-paged from the cloud in real-time. The company claims that cloudpaging will allow any software, app or game to pull this data on-demand to any connected device in a secure, metered and virtualized fashion. The company is even positioning cloudpaging as the successor to streaming, and holds 10 patents for application streaming and virtualization through its subsidiary, Endeavours Technologies. It’s also worth mentioning that Endeavors Technologies was spun out of a think tank for a DARPA project.

Numecent is also now claiming to have high-profile testers who have begun to deploy its hybrid-cloud solution in mission-critical environments. The company plans to exit stealth in March, at which time the company will reveal more details about the cloudpaging technology itself and how it’s being used.

Alongside the funding news, Numecent also announced that Osman Kent, previously the co-founder of 3Dlabs, has joined the company as the new CEO.

Earlier this month, Numecent launched an “application jukebox” for Red Hat, which allows traditional Windows applications to be delivered to Red Hat Enterprise Virtualization-hosted desktops.

Sumo Logic, a startup focused on enterprise log management and analytics, has raised $15 million in Series B funding round led by Sutter Hill Ventures, with participation from previous investors Greylock Partners and angel investor Shlomo Kramer. The new funding brings the startup’s total venture capital backing to $20.5 million.

Today, Sumo Logic emerged from stealth to unveil its log management and analytics platform, aiming to help companies to uncover operational and security insights buried in enterprise log files. The startup was founded by ArcSight veterans Christian Beedgen and Kumar Saurabh in 2009, to provide a cloud based system for managing the massive amounts of enterprise log data.

similar to other cloud based data management offerings, Sumo Logic wants to eliminate the need for expensive on premise-based log management applications. Using algorithms, the service provides enterprises with operational and security insights from their log data in real time, at a massive scale. We’re told the service can analyze terabytes of log-data a day.

Sumo Logic’s architecture features an elastic petabyte scale platform that collects, manages and analyzes enterprise log data, reducing millions of log lines into valuable operational insights in real time. The cloud-based service is powered by Sumo Logic’s Elastic Log Processing, which is a scalable architecture that enables log analytics at a large scale; and LogReduce, which are a set of adaptive algorithms that reduce millions of logs into a small number of patterns.

The platform also features real-time interactive forensics and push analytics to provide proactive detection and notification of trends, changes and anomalies in data. Sumo Logic’s service also mines global trends and anomalies across customer organizations.

As Beedgen explains, there is a major opportunity behind providing a cloud-based alternative to log management because enterprises have real problems managing and analyzing log and machine data. He says existing products can suck in data but have poor analytics and data analyzation with too many false positives.

Sumo Logic has an innovative approach, he says, because it provides a scalable elastic architecture, applied machine learning for IT intelligence, and the horsepower to process massive amounts of IT data.

The new funding will be used towards expanding engineering and marketing. Sumo Logic faces competition from Splunk, which just filed for an IPO.

Online content, portal and front-end technology solution Synacor filed its amended S-1 today for an IPO looking to raise $75 million. The filing revealed that this month Synacor acquired Carbyn, an HTML5 operating system that lets users put their files, applications and more in the cloud and access them from any device’s browser. It paid $1.1 million in total for the company, with $600,000 paid up front with $500,000 to be delivered in April 2013, and it hired 7 Carbyn employees.

The companies are a great fit, a veritable match made in the cloud. Synacor helps telecom and cable service providers set up websites on its managed, hosted platform where their customers can access ”e-mail, security, online games, music and authentication of TV Everywhere”. That means Synacor already handles all your web-based, and TV services, but is missing what lives on your OS. Carbyn’s OS that can be accessed from anwhere will fill this gap and let Synacor’s clients provide their customers with an expansive set of services in a single-sign on package.

Major stockholders of Synacor who will each be selling about a quarter of their shares include Intel Corporation, Walden International, Crystal Internet Ventures, Advantage Capital Partners, and North Atlantic Capital. These companies all contributed to Synacor’s $17 million Series C round in 2006. Some additional facts from the filing include:

6,818,170 shares will be made available at between $10 and $12 a share, 5,454,545 shares from the company and 1,363,625 shares from stockholders 2011 revenue was roughly $91 million, up 37% from its $66.2 million revenue for 2010. 2011 income from operations is estimated to be between $3.8 million and $4.2 million, compared to a loss from operations of $3.3 million in 2010 Over the three months that ended December 31, 2011, Synacor-powered sites had an average of 18.7 million unique visitors per month, as measured by comScor

As mobile demand for access to television and OS-based content increases, Carbyn should become an increasingly valuable component of Synacor. The Ontario-based Carbyn started just a year ago, and the founders said it was looking for its first funding when it made waves in September at TechCrunch Disrupt. Seems like Synacor picked up Carbyn’s anywhere OS at just the right time.

See Carbyn’s technology in action below:

Solera Networks just announced that it has raised $20 million in Series D funding from Intel Capital (the chip-maker’s investment arm) and others.

The company says its DeepSee Platform can index and classify all network traffic, giving companies a comprehensive picture of their network security in real-time, either for spotting risks before a security breach or responding quickly once a breach has occurred. Both domestic and international sales supposedly grew more than 100 percent last year.

Previous investors Allegis Capital, Signal Peak Ventures, and Trident Capital also participated in the new round. Solera says it will use the money to expand global sales, marketing, and product development. It also notes that Intel’s expertise should help with future product improvements.

“With increasingly large amounts of data crossing corporate networks, organizations must balance advanced threat prevention with an aggressive and proactive response system to be fully prepared when an inevitable breach occurs,” said Intel Capital Investment Director Sean Cunningham in the funding press release. “We see companies continuing to realize that real-time, intelligent incident response is now an essential component of their security strategy. Solera Networks delivers a scalable, high-performance solution that addresses these challenges and is the only independent platform capable of broad integration.”