Cach-ing In On Database Software Solutions

ISV database software

Great River, N.Y.-based NetSmart couldn't serve its customers, which include 33 state health agencies, without a reliable database software vendor partner. On the flip side, software vendor InterSystems relies on partners to get its database and integration products into the hands of customers.

"It's our core database transaction engine in our application. It's almost the de facto standard in health care," said Kevin Scalia, executive vice president of corporate development at NetSmart. The ISV's software offerings target the public health, behavioral/mental health, substance abuse and social services sectors, he said. "Our customers are counties and governments without large IT staffs. [The Cach database is] extremely reliable and requires little hardware to run it and very little staff to maintain it. As part of our total solution, that's very important as we're selling to our clients," he said.

NetSmart's Avatar suite of software, which includes products for electronic records management, addiction management and e-prescribing, is built on the Cach database. Cach can be run on Windows, Linux, Unix, Mac OS X or Open VMS.

Using Cach allows NetSmart to keep costs down for its customers.

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"When you look at it on an overall basis, most of our clients run their applications on a single server, which was almost impossible to do with Oracle, so the total cost of ownership [for our customers] was less with Cach. When someone runs Oracle, they have a full-time [database administrator] running it," Scalia said.

On the technology side, NetSmart develops on Cach for several reasons, including the database's ability to handle text, scalability and migration capabilities, Scalia said. "We have some other applications that run on Microsoft SQL Server [that were integrated into the company portfolio through acquisitions], and as we migrate from version to version with Cach, it's much easier for us to upgrade to the new database as opposed to some of our applications that run on [Oracle or SQL Server]," he said. "Cach's strength is its ability to integrate with other products, using their object-based development environment."

For InterSystems, partners like NetSmart are invaluable. "About 80 percent of the time, our product gets to a customer because some other software company has built an application using our technology. [NetSmart is] a typical one. They go after some very specific target markets and target customers in the behavioral health space," said Paul Grabscheid, vice president of strategic planning at InterSystems, Cambridge, Mass.

"There are two ways that we might work with a partner. [The first way], the partner takes our software and really embeds it in their application and delivers that as one whole thing to the end users. In that environment, we're licensing our software to the partner and they're sublicensing them. They pay us for each time they make a sale," he said. The second way is when smaller partners invite the software vendor to participate in the sale, and each is sold individually to the customer, he said.

It's through partners like NetSmart and other solution providers that InterSystems is seeing growth. The vendor saw revenue of $167 million last year.

"We've been typically growing 15 [percent] to 20 percent a year. The solutions business has been growing faster or more consistently than the database or underlying technology business. We recognized early on that we're a good technology company and we get a lot of coverage from working with these technology partners," Grabscheid said. "It's a hard and important decision for one software company to become dependent on another software company."

NetSmart is developing new products to run on Cach, including a managed care product targeted at HMOs, and a management dashboard executive reporting system.