IBM Inks $402 Million Deal to Upgrade Medical Centers IT Infrastructure
IBM and the University of Pittsburgh Medical Center have entered into an eight-year, $402 million partnership designed to overhaul the medical centers IT infrastructure and help it develop IT solutions that will be used both internally and sold commercially to other health care facilities.
About $352 million of that will be used to rebuild UPMCs IT infrastructure, which currently houses systems and technology from multiple vendors, including Hewlett-Packard Co., Sun Microsystems Inc. and EMC Corp., said Paul Sikora, director of production services at the medical center.
UPMC, which announced the partnership with IBM on Thursday, has grown rapidly over the past few years, in part through acquisitions, Sikora said. Included in those acquisitions were disparate IT platforms that were impossible to integrate into a more flexible, single system, he said. It also was expensive to maintain.
Over the next three years, UPMC will replace all that with IBM technology, from systemsa mixture of Power5-based pSeries servers, xSeries systems powered by Intel Corp. chips and BladeCenter blade serversto storage to middleware, Sikora said. The medical center also will take advantage of such technologies as virtualization to make the infrastructure more scalable and responsive. It also will save on hardware costs, he said.
The partnership will enable UPMC to institute a refresh cycle, turning over a third of its hardware every year. "Its a problem today keeping all the technology updated," Sikora said.
The result will be an integrated infrastructure in which information from all of UPMCs facilities will be accessible to its staff.
UPMC officials expect to save 15 to 20 percent a year in operating expenses, reduce the operating systems from nine to three and cut by more than half the number of servers in its data centers, from 786 to 305. In addition, UPMC will need only two storage arraysdown from 40 currentlyand the total hardware footprint will be cut by two-thirds.
"The bottom line is better utilization of the resources that you have," said Nancy Landman, director of business development and operations for UPMC.
The more flexible and scalable infrastructure also will help the medical center better handle its growth, Landman said. Over the past five years, the UPMC workforce has grown from 29,000 to 39,000. In addition, revenue has jumped 104 percent, admissions 27 percent and the number of hospitals 25 percent.
The second part of the IBM deal is a joint partnership to develop health care technologies and solutions that UPMC will be using internally and possibly sell commercially, Landman said. UPMC and IBM each have donated $25 million to kick off the initiative, and that could grow to $200 million over time, she said.
There are several projects under consideration. Once a governing body is in place, that group will choose which projects to fund, Landman said.
Included in the list of possible projects are a biosecurity information initiative to develop technology and tools to help hospitals better handle epidemics and bioterrorist attacks; leveraging current electronic health care records for better patient care and communication among hospital staff; and improving operational efficiency within hospitals. IBM also will donate hardware and technical help to UPMCs work as part of the National Cancer Institutes caBIG (cancer bioinformatics grid) project, which is designed to help in the distribution of cancer data and tools.
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