Los Angeles, CA September 6, 2016 –Silicon Valley’s recent obsession with Healthcare is understandable. Who doesn’t love a multi-trillion-dollar inefficient, archaic but recession proof industry? VC funding in healthcare reached record levels last year, growing at 34% to reach ~$16B. Silicon Valley giants like Alphabet, Apple, Microsoft and IBM have already invested billions of R&D dollars and plan to continue doing so. Despite the enormous interest and buzz around disruption and innovation in Healthcare, the industry has very little to show for it. Recent debacles like Theranos and Zenefits highlight how little Silicon Valley knows about the complex world of Healthcare.Google was no different than other companies who tried to enter this space. Google Health, a consumer-focused personal health record app was shut down in 2011 because of limited adoption. Google Health’s lack of focus on 2 of the 3 pillars of healthcare, physicians and insurance providers, is what ultimately gated mass adoption. Their strategy of focusing on the end user, which has given them great success with search and advertising, showed no signs of success here.Google’s restructuring into Alphabet is just what the doctor ordered. Different business units under the parent Alphabet, as Sergey Brien points out, makes them more accountable and nimble. It also distances the newly formed healthcare subsidiaries from the brazen “move fast and break things” culture. As a conscious effort, healthcare wasn’t just consolidated into a single division under Alphabet; rather a multi-pronged assault was initiated. Verily and Calico have been the poster children of Alphabet’s healthcare movement, with Google Ventures strategically investing in different sub-segments of the market. Over the past 5 years, Alphabets and its subsidiaries have made over 30 unique plays in this space, signifying their commitment towards healthcare.

<a href='#'><img alt='Infographic ' src='https:&#47;&#47;public.tableau.com&#47;static&#47;images&#47;Al&#47;AlphabetandHealthcare&#47;Infographic&#47;1_rss.png' style='border: none' /></a>

Here are three reasons why Alphabet could dominate healthcare:1. Leveraging strengths and collaborating in areas of weakness Alphabet inherently has strengths in computing and data analysis. They house one of the words most advanced and sophisticated artificial intelligence (AI) algorithms along with the infrastructure to massively scale and deploy applications built on it. They lack experience in conducting robust clinical research and expertise in dealing with the convoluted healthcare market forces. In order to fill these gaps, they have made significant investments in developing high profile collaborations with some of the biggest healthcare companies such as GSK, Novartis, AbbVie, J&J. These partnerships simultaneously tether Alphabet to the market realities and help them meet their ambitious goals of disrupting this industry.2. Diversification of betsAlphabet’s investments in healthcare range from therapeutics, diagnostics, all the way to insurance and analytics companies. Unlike other large tech companies who have focused on a narrow section of this market (Apple / Microsoft on digital health), Alphabet’s portfolio of companies gives them the ability to take a broader look at the market and increase their overall probability of success.3. Patience and MoneyDisrupting healthcare will be a slow and painful process, so slow that “disruption” and “healthcare” should not be mentioned in the same sentence anymore. Over-reliance on legacy systems, lengthy clinical timelines, stringent regulatory requirements are just some of the reasons why products get delayed in this space. Given Alphabet’s deep pockets, it has the financial resources to see projects to completion and not worry about short term gains required to sustain their companies.When Alphabet does end up dominating the healthcare industry, it won’t be because it is a well-seasoned tech company, but because it would have evolved itself into a next-generation healthcare company.Disclaimer: Some of the companies listed above may be DeciBio Consulting clients or customers.Source: Alphabet, Calico, Verily, Google Ventures, CrunchBaseAuthor: Pranay Madan, Senior Analyst at DeciBio Consulting, LLCConnect with Pranay Madan Linkedinhttps://www.linkedin.com/in/pranaymadan