H.I.S.-tory by Vince Ciotti

Episode #64:

Keane Part 3:Pentamation

© 2011 by H.I.S. Professionals, LLC, all rights reserved.

Keane’s Mini HIS-tory, cont’d• As I warned you last week, the evolution of Keane’s HSD reads like

a mini (a pun intended!) HIS-tory of our industry in itself. • This week, we cover the first of KeaMed’s many acquisitions that

paralleled the development of Threshold – it was as if the boys in Boston were hedging their bets: in case that UNIX experiment doesn’t sell well, we’ll buy a bunch of market share anyway…

• Credit for this story of their first acquisition started with Gary Pollock, who we heard from last week and who is now the Pharmacy System Administrator at Clark Memorial Hospital in IN.

• Next email from a Pentamation veteran and avid HIS-talk reader:– “Vince – if you need some background on

Ferranti/Pentamation, give me a call. I was there from 1982 to 1990. Was one of the lead architects of the Leadership Series.”

– Doug Abel  Netsmart | D: 913.696.2804 | C: 816.654.4504

Doug Abel’s Amazing Tale…• Doug blew my mind with his memory and these bits of HIS-tory:

– Pentamation was formed way back in the early days by several SHAS gurus! You should remember the story of SHAS:

• IBM’s “Shared Hospital Accounting System,” developed in Minn. in the late 60s, by a group of small hospitals to share a System 360 mainframe they couldn’t afford on their own.

• The source of SMS’ “FMS,” whose TCE (Transmission Control & Error) reports are still being printed to this day!

• Two of the Pentamation’s leaders are pictured here:• (sitting) Chuck Wistar, president of

Pentamation’s hospital division (they served many industries…)

• (standing) Dave Shor, VP of Sales, whose resume alone could be its own chapter of our HIS-tory• (and who’s current position is the perfect

ending for any VP of Sales & Marketing!)

What Do You Call A Leader?• Pentamation’s parent company was founded by Jeff Feathers, and

it originally concentrated on the school & education industries. Chuck Wistar & Dave Shor led their foray into healthcare, along with _________ Sullivan (anyone remember his first name?)

• Although originally a shared system, Pentamation jumped on the mini band wagon in the early 80s, on DEC VAX 25s running VMS.– Rather than IBM’s Sys 3X line, which had so many competitors.

• They named their HIS “The Leadership Series,” and it sold well…

- By the late 80s, they had a client base of 30 hospitals mainly on the East Coast near their Maryland headquarters, and annual revenues of about $25M – not bad!

Cute Ad…• You can sense a bit of their

education roots with this cute ad from circa 1988:

• (Bet if they ran it today, Apple would sue them as fast as they are Samsung!)

• Pentamation also penetrated the Long Term Care market, which will play a part in our Keane tale a little later…

• Pentamation did so well that, they got the attention of a major player in Europe, who was eager to penetrate the US market. Guess who?

Not Misys!• They came over in the 90s! Back

in the 80s, it was another British firm with an Italian founder that made Doug Abel & company think they might get a hot red sports car from their new owner!

• Ferranti was formed way back in 1885 in the UK, and started its foray into computers in 1949, introducing one of the world’s first commercial machines, the “Mark 1” shortly after our ENIAC. – Both used vacuum tubes that

attracted bugs causing shorts, hence, our modern name for “undocumented features.”

News Flash:• Pentamation Sells Healthcare Division!

– “January 14, 1988|by PAUL WIRTH, The Morning Call– Pentamation Enterprises Inc. of Bethlehem has sold its

210-employee Healthcare Systems Division to a British computer firm for an undisclosed sum.

– Most of the employees in the division, sold to Ferranti Computer Systems Ltd. of Manchester, England, work in the Baltimore, Md., and Norfolk, Va., areas, Pentamation said. The sale was completed Jan. 1.”

• Ferranti acquired both divisions of Pentamation: the hospital and long term care group, which had both done very well in the mini movement.– They even sold The Leadership Series in

Ireland with help from “local” Ferranti.• The system was mainly financials with order

entry. For an LIS, they partnered with a small start-up firm in Kansas City named Cerner…

Ferranti’s Dénouement

• ISC’s books turned out to be as phony as HBOC’s were in 1998, and Ferranti declared bankruptcy in the UK in December, 1993.

• Ferranti sold its US operations to Keane in 1992, which had been in Chapter XI bankruptcy protection due to the parent’s woes.

• Things went fine in HIS for Leadership Series for several years, until Ferranti acquired a firm named International Signals & Control (ISC), that was actually selling arms illegally at the behest of various US clandestine groups...

• Keane tried to sell its UNIX-based Threshold system to The Leadership Series clients, as “selling into the base” was Ray Paris’ mantra with acquisitions, who were bought as much for for their market share as their products.

• So what happened to Dave Shor, VP of Sales?

Shor-fired Success!• Dave Shor’s resume reads like a mini HIS-tory in itself:

– Per his web site bio: “Shor has held senior executive positions with Peat, Marwick, Mitchell & Co. (now KPMG), Mc Donnell Douglas Corporation (now Boeing), Ferranti International Healthcare Systems, Pentamation Enterprises, Inc., Micro Healthsystems Corporation (now McKesson Corp.), and University of Maryland Medical System.”

• After leaving HIS, he moved on to (where else?) Hollywood, where:– “Shor served as Producer/ Executive Producer and managing partner of

Labrador Pictures (feature motion pictures), Executive Producer for The Flying Cranes (cirque performers-worldwide), Producer for Goodman Productions (live events-Las Vegas), Producer for TJ Productions (live events), Production Adviser/Consultant for Delaware Pictures (motion pictures) and Producer for Liberty Jam Corporation (live concerts of: Eric Clapton, Santana, The Eagles) and he represents performers, writers, filmmakers and other entertainment professionals as manager. Shor was Producer and Executive Producer of the recently released motion picture "Dave Barry's Complete Guide To Guys" and he is presently producing the Broadway adaptation of "Sleepless In Seattle.”

– Can their be a more appropriate ending for a VP of Sales & Marketing!?!?

The Keane Saga Continues• Next week we’ll start the story

of another Keane acquisition, this one of another pioneering UNIX/mini vendor: Infostat

• Advanced thanks to John Indrigo, VP there, who told the story and whose resume also reads like a mini HIS-tory!

• Today, John applies his vast vendor experience to the small vendor M&A space at:– John P. Indrigo, President– JPI Enterprises, LLC– 813-503-0400jindrigo@jpi-

enterprises.com