Publisher’s Window: November/December 2015
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Mainstream players in the computer market, such as Intel and HP (and you can throw in Microsoft) are being forced to change their playbook. Microsoft has jumped on this cloud computing trend, where you pay as you go, rather than making a capital investment in servers and other hardware. Intel’s data center business is doing well. Amazon is also a player, and a big one at that, in cloud computing. And IBM is finding this a fast-growing area of its business. We are trending away from so-called enterprise systems to cloud computing services.
Cloud computing is really no different than the time-sharing systems that were the backbone of the early pharmacy computer applications. Connected through a dial-up modem to a remotely located minicomputer, prescriptions were processed and the prescription information stored on the mini. Pharmacy went from an electronic typewriter to what I am going to call a typewriter with circuit boards. Pharmacies paid a per-prescription charge for the prescriptions processed and stored — a similar business model.
There is still an element of this technology in use today, where network switches handle the transmission of insurance claims to the appropriate payer for adjudication. Thus, the pharmacy computer system doesn’t have to be programmed to interface with the myriad payers, only the switch through which the claims travel to their destination. An analogy of the network switch would be the role of drug wholesalers in getting drugs into retail pharmacies. They serve as an intermediary between the pharma companies manufacturing the drugs and the retail pharmacies that dispense them.
In a recent Barron’s Tech Trader column (Oct. 16) written by Tiernan Ray, it was reported that General Electric plans to shift 60% of its workloads (defined as total computing activity by a company) to Amazon over the next three years and reduce the number of its own data centers from 34 to four. GE’s strategy with its information technology is closely watched and generally followed by others. Will the major retail drug chains move to cloud computing? I mean, if a company like GE sees financial advantage and is comfortable with someone else in charge of protecting its data, why wouldn’t the drug chains?
But with pharmacy there are the HIPAA regulations dealing with the security of patient data to contend with. My take is that pharmacy is more comfortable in knowing the data is within the four walls of the pharmacy or a chain’s IT department. There are companies in the pharmacy space that offer a cloud-based alternative, but my feeling is this really has not taken off. Even so, we have to keep in mind that the cloud data centers are dealing with a lot of highly confidential information and have built in the necessary firewalls to supposedly defend against hacker attacks.
All told, cloud computing is certainly something worth keeping an eye on. CT
Bill Lockwood, chairman/publisher, can be reached at email@example.com.