An ASP With Healthy Vitals

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Event Summary

InfoCure Corporation (Nasdaq:INCX) announced that Healtheon/WebMD (Nasdaq:HLTH) has agreed to invest up to $100 million in InfoCure's newly formed subsidiary Healtheon/WebMD will immediately purchase $10 million in cash convertible preferred stock with an additional $90 million ($40 million in cash and $50 million of Healtheon/WebMD common stock) invested at the completion of's impending IPO. The investment is still subject to regulatory approval and approval of both companies board of directors.

InfoCure will utilize Healtheon/WebMD's transaction processing platforms and also incorporate the "WebMD Practice" into VitalWorks ASP technology. In addition, InfoCure and Healtheon/WebMD have entered into a joint research and development venture to develop an ASP practice management application which will integrate with Healtheon/WebMD's Microsoft based Internet transaction platform.

Market Impact

On December 22, 1999, Hewlett-Packard, Qwest Communications, and InfoCure announced they were working together to enable InfoCure's VitalWorks practice management software as an Application Service Provider (ASP) for physicians and healthcare practices.

Recently, Frederick L. Fine, CEO of VitalWorks stated "The investment of $100 million by Healtheon/WebMD into VitalWorks and formation of a strategic partnership provides validation of our ASP delivery strategy for our 70,000 physicians that already utilize our practice workflow applications."

Healtheon/WebMD's partnership is representative of a burgeoning market. The combination of hardware, hosting and application companies are forming alliances to support a market which DataQuest estimates will hit 22.7 billion by 2003. Healthcare is not the only vertical serviced by ASP's. Messaging, financials and Enterprise Resource Planning are only a few of the solutions available in this growing market.

User Recommendations

For physicians and health care providers considering a workflow application:

Consider your alternatives. Determine if an ASP model is appropriate. Investigate VitalWorks feature set to determine if the application suits your needs. If the solution fits, consider using InfoCure's partnership with HP to competitively price an "HP centric" hardware solution. Take it a step further and inquire about package pricing for the hardware, application, and hosting fees combined.


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