IBM Snares Healthy On-Demand Deal

A major Pittsburgh medical center has agreed to pay IBM
$402 million over the next eight years to overhaul its technology

The goal of the University of Pittsburgh Medical Center (UPMC) is to improve the way it handles data at a time when
health-care groups are falling behind in their quest for the digitalization
of patient information.

Under the terms of the first part of the deal, UPMC will pay IBM $352 million to re-engineer UPMC’s computing equipment, allowing administrators to tap into additional computing power when needed. The company will replace UPMC’s various Unix systems and Compaq VMS systems with a number of Intel-based xSeries machines, from blades to eight processor machines.

The medical center will replace high-end Unix boxes with Unix machines based
on IBM’s Power5 processor. P5 systems offer customers the ability to
virtualize operating systems, or run as many as 10 instantiations of Windows
or Linux, on one hardware system.

UPMC will also use IBM’s new DS8300 storage servers and manage all of the
gear with IBM’s Tivoli management software, said
Paul Sikora, director of production services at UPMC.

IBM’s advanced equipment is part of the reason why UPMC anticipates
considerable infrastructure reductions. The center will pare operating
systems from nine to three; servers from 786 to 305; and storage arrays from
40 to just two.

“From a technology standpoint, we’re doing all of this for the same dollars
that we spent today doing it the old way,” Sikora said. “It will lower our
cost to provide infrastructure and provide performance, reliability and
stability that we don’t have today.”

Sikora also said UPMC has entered into a formal technology refresh program
that will ensure that every year one-third of its technology will be
upgraded so that the medical center will never have infrastructure aged more than three years.

Officials from IBM’s global services unit will help set up and deploy the
new equipment, as well as train UPMC technical administrators on managing it. This process, Sikora said, is expected to take three years.

The timing of the upgrade, Sikora added, coincides with increased document
regulation and digitization of paper records. The current
infrastructure is becoming overwhelmed, he said, noting that digital images such as CAT scans were increasing.

The deal is an example of IBM’s ballyhooed on-demand strategy to provide
customers with more flexible computing options when resource
requirements are subject to rapid change.

In the second part of the agreement, IBM and UPMC will co-develop a handful
of medical technologies and information systems to more effectively diagnose
and treat ill patients. Both parties said they will invest a minimum of $50 million in this initiative, with a total possible joint investment of $200 million throughout the life of the contract.

These projects include a biosecurity project, in which UPMC and IBM will
co-develop systems to allow health-care companies to deal with large-scale
epidemics or bioterrorist attacks. The systems would link doctors to other
experts from around the world.

Other projects include cancer research and a push to provide wireless
handheld devices that help health-care officials access electronic health
records and radio frequency identification tags. The
handhelds would be used to track personnel, equipment and patients.

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