BlackBerry’s investment: what’s in it for NantHealth

This week’s news of BlackBerry Ltd’s minority investment in the Dr. Patrick Soon-Shiong eight-company combine called NantHealth has generally focused on BlackBerry. Across the board, BlackBerry is depicted as the party badly needing a raison d’être. Down for the count in both retail and enterprise mobile phone markets it dominated for years, BB’s six-months-in-the-saddle CEO is now going back to those same enterprises singing the wonders of their QNX operating system and upcoming BBM Protected communication platform to highly regulated verticals which need max security: healthcare, finance, law enforcement, government. Although FierceCMO inaccurately reported that BlackBerry was acquiring NantHealth (Reuters/WSJ reports to contrary), it’s generated yawns from former tea-leaf readers such as ZDNet as yet another flail of the Berry as it sinks beneath the waves. Add to this the bewilderingly written CNBC ‘Commentary’ under BlackBerry CEO John Chen’s byline–who should fire the ghostwriter for inept generation of blue smoke and mirrors–and you wonder why the very smart Dr. Soon-Shiong even desires the association with a company most consider the equivalent of silent movies. It is certainly not for the investment money, which the doctor has more than most countries–an expenditure carefully considered at BlackBerry, undoubtedly. 

Cui bono? NantHealth first, BlackBerry second is your Editor’s contrarian bet. Consider these three factors:

1. Way down the column in most coverage is that BlackBerry and NantHealth are developing a healthcare smartphone. It will be optimized for 3D images and CT scans but fully usable as a normal smartphone. Release date: late 2014-early 2015 (Reuters).
2. NantHealth’s cloud-based Clinical Operating System (cOS), unveiled at HIMSS, appears to be designed as a complete connector for the medical network. MedCityNews‘ Neil Versel: “cOS relies on technology from iSirona, Net.Orange, Qi Imaging and Eviti – all companies Soon-Shiong has acquired in recent years – to pull in and process information from electronic health records, health information exchanges, billing claims and other data repositories, including genomic profiles.” Interestingly, cOS was unveiled without an imminent launch–ETA’s ‘a few months’. Meaning: it’ll be ready to go when the smartphone’s ready, but they couldn’t say that in February.
3. The through-the-roof nightmare of HIT security may demand a packaged solution of upgraded device + data network. HIT leaders believe–with all due reason–that security is out of control. There’s BYOD, cloud servers, proliferating data and medical records (EMR/EHRs) and mobile apps, transmitted via insecure PCs, mobile devices, consumer email platforms (Gmail), text and video (Skype), stored in low-security cloud services like Dropbox (not Box) or locally on devices/PCs which are easy to steal. Dispersed doctors, practice locations, payers, billing services, suppliers (pharmacy, medical equipment) and PHRs present additional opportunities for Happy Hacking. Moreover, their organizations are now subjected to Federal/HIPAA and state citations plus fines for non-compliance. (More in this vein in HealthcareITNews) There’s the charm of familiarity: BlackBerry established early and firmly in healthcare; among HIT-ers it remains a trusted platform they have not left or are reluctant to leave. Between QNX and BBM Protected, its security is now its leading feature. Thus an imposed all-in-one solution between a radically updated, dedicated to healthcare BlackBerry-NantHealth device + cOS could hold great appeal, especially if the price is right.

Though NantHealth has made much of its device agnosticism (better term out there, somewhere–Ed.) and its open application programming interface (API) for cOS, it remains a small player with 250 hospitals on the roster. Since there are over 5,700 US hospitals (AHA), it would be a tough slog to get it in the Medtronic or GE court where the Good Doctor would like to be playing ball, even with $1 billion backing. Entreé via a proven partner, BlackBerry–which paid to play!–is much more strategically appealing and saves time. If it works, it may save the day for BlackBerry, providing the template, cash and badly needed credibility to develop similar systems for other security-first sectors. And if it does not, Dr. Soon-Shiong may have enough money to pick up the Berry bits he wants.

Updated: A BlackBerry-focused analysis in Wired’s ‘BlackBerry just had its first good idea in years’–is the pivot in time, and will the niche be large enough to support their weight?