Microsoft Expands Presence in Healthcare IT Industry With Acquisition of Health Intelligence Software Azyxxi

WASHINGTON — July 26, 2006 — Microsoft Corp. today announced that it has agreed to acquire the health intelligence software Azyxxi™ and to forge a strategic alliance with MedStar Health.

Designed by doctors for doctors in one of the country’s busiest hospitals, Azyxxi (rhymes with “Trixie”) was created by Craig Feied, M.D., Mark Smith, M.D., and Fidrik Iskandar using Microsoft® development tools. It brings together all types of patient data from hundreds of sources and makes them instantly available at the point of care.

Azyxxi was first deployed in 1996 in the emergency department of one of MedStar Health’s hospitals, Washington Hospital Center, in Washington, D.C. In addition to serving as a repository for all of a patient’s routine clinical information, Azyxxi provides caregivers with instant access to a comprehensive view of each patient that includes EKGs, scanned documents, X-rays, CT scans, MRI scans, PET scans and even dynamic angiograms and ultrasound images. The acquisition of Azyxxi deepens Microsoft’s commitment to the healthcare industry while making a proven solution more widely available to its customers. Financial terms were not disclosed as part of the agreement between the organizations.

Under the terms of the acquisition, the Azyxxi creators will continue to support the development and expansion of the Azyxxi solution. Drs. Feied and Iskandar, along with approximately 40 employees from the development team at Washington Hospital Center, will join Microsoft and continue to work on research and future enhancements to the product. Dr. Smith will remain as chairman of the emergency medicine department at Washington Hospital Center and will also serve as chief clinical liaison to Microsoft.

A newly formed division at Microsoft led by Peter Neupert, corporate vice president of the health solutions group, will incorporate the new employees and manage product development and delivery. Neupert rejoined Microsoft in September 2005 to coordinate its global health strategy. He reports to Craig Mundie, the company’s chief research and strategy officer.

“Healthcare delivery is one of the top global challenges for governments, employers, caregivers and consumers. Microsoft believes that information technology can positively impact the situation by removing barriers and empowering physicians with instant access to critical patient data,” Neupert said. “Azyxxi has demonstrated strong and clear benefits to physicians and other clinicians. We’re excited to work with the original architects, MedStar Health and Washington Hospital Center, to increase R&D investment in Azyxxi and deliver a technology environment that will help advance the quality of healthcare for patients.”

“Successful innovation requires collaboration, and we are honored to work with Microsoft to advance our shared vision for using information technology to improve patient care,” said Kenneth A. Samet, president and chief operating officer of MedStar Health. “The Azyxxi technology is an amazing tool that enables clinicians to treat their patients more quickly, efficiently and accurately with the click of a mouse. Putting patients first is what we’re all about, and Azyxxi helps us do that every day.”

“Instant access to patient information is key to lifesaving care, especially in the emergency room and intensive-care unit, where delays may mean the difference between life and death,” Dr. Smith said. “Azyxxi was developed in the crucible of a real-time, high-acuity hospital environment, not in an offsite office or research laboratory.”

“The reality is that most hospitals have islands of data that can’t easily be shared with other systems because of disparate data types,” Dr. Feied added. “We developed Azyxxi to address this challenge. Now, as part of Microsoft, we’ll be able to make an even greater contribution to healthcare systems, hopefully worldwide.”

Microsoft and MedStar Health have also agreed on a strategic alliance designed to deliver collaborative innovation to customers as the technology becomes commercially available. Building on more than 10 years of experience, Washington Hospital Center will serve as the development laboratory and continue to develop prototypes and deploy new features that support and enhance the Azyxxi technology.

About Azyxxi

Azyxxi was designed and developed to capture, integrate and display data from wherever it was created. The system can answer clinician-specific questions with great speed; it uses existing data in new ways to enable situational awareness and facilitate the recognition of patterns in the data.

The Azyxxi system excels in environments with fragmented systems that traditionally don’t share data. It manages more than 40 terabytes of live data while offering sub-second response times, and delivers data through a dynamic interface that can be defined by the user and accommodate almost any query. In use at Washington Hospital Center, Azyxxi has increased hospital efficiency, enhanced operational capacity for emergency room cases, improved patient safety, and reduced time for rounds reporting. Azyxxi was so successful that it was exported and deployed throughout MedStar Health’s other hospitals.

Built on the Microsoft .NET Framework and with Microsoft SQL Server™ database software, Azyxxi is able to scale across a range of devices including Tablet and Pocket PCs, and handle a large volume of work stations and terabytes of data to address the needs of any size of institution. Azyxxi’s intuitive, user-friendly interface also supports easy installation by requiring minimal training, and has proved itself to be extremely stable in mission-critical hospital environments, with almost zero downtime.

Azyxxi is being acquired by Microsoft from two technology companies, Datomics Licensing and General Datomics, founded by Azyxxi’s creators. MedStar Health was a co-owner of General Datomics.

Washington Hospital Center is the largest hospital in the nation’s capital with more than 400,000 patient visits per year. Its parent company, MedStar Health, is the largest healthcare provider in the Washington and Baltimore region.

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

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