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9:45am EDT August 20, 2004
Kapali Eswaran left IBM in 1982 to pursue his own enterprise. Within 11 years, the co-founder of the SQL Database language had sold two successful businesses and could easily have spent the rest of his days lounging on the beach.

"Esvel was the first company I founded," Eswaran says. "It got sold to Computer Associates and also to Hewlett Packard in 1989. I worked for Computer Associates as executive vice president for 18 months. Then I formed Kaps. Kaps did an automatic translation of AS/400 applications to UNIX, from a proprietary platform to a nonproprietary platform. The technology was bought by a wing of British Petroleum in 1992."

But that was all before a friendly tennis match put Eswaran back in the game.

"After I sold Kaps, I kind of retired," Eswaran says. "My wife's physician was my neighbor, and we were playing tennis one day. He kept calling the hospital to get a patient's results. He told me, 'I'm able to call my bank and get my bank balance instantaneously. Here, I have to keep calling and get put on hold and put on hold because I want to discharge this patient and I want to look at his sodium level.'"

Eswaran decided to take up the challenge.

"I told him, 'I'm not doing anything; let me build you a system,'" Eswaran says. "And I literally built it in the basement -- an IVR system, interactive voice response system -- that would recognize the doctor's patient. And if the doctor says, 'I want the results of a lab from a particular test,' it will play it back."

The appreciative doctor introduced Eswaran to the folks at Northside Hospital.

"We wound up that we could not take our product and interface it with their lab information system," Eswaran says. "It was a database issue -- an old database called MUMPS. So I had to build an interface, which I did, and they bought the product. They like it. They're still using it. That's how we got started.

"If they had not bought it, I would still be on the beach. And then I said to myself, 'Now I've got to make something out of this.'"

That "something" became Integrated Informatics, Eswaran's current venture. The company provides hospitals with database systems to organize operations and workflow.

Smart Business spoke with Eswaran about the industry and his plans to revamp the way hospitals utilize their database systems.


What was it like to be part of the team that created IBM's DB/2?


That was one of the most rewarding and exciting experiences. Like any other company, IBM had a very large investment in a legacy database system called IMS, a huge investment. And we, in research, introduced this new concept called relational database, so IBM has got to balance both the ideas -- coming up with a new product or creating research.


How did you finally convince IBM the new solution was the wave of the future?


We were trying to wear multiple hats -- trying to find a sponsor in the IBM customer base that would help us by trying the product out. We went through some large academic institutions that are always open for some new ideas. We also found a small investment bank that was interested in it.

We did a prototype, and we got accepted. Then IBM decided to bring it as the mainstream DB/2 product. It took five years to convince IBM that it was the way right to go.


Are you proud that you were part of such a successful product?


It is scientifically a great achievement transferring science into technology into a commercial product. It took more time and more energy. Currently, IBM is making around $2.5 billion per year out of DB/2 and connected products.

Oracle adopted the technology based on our scientific publications. Oracle really became pretty big, not as big as it is now, but it became a $500 million company. Then IBM said, 'Well, it looks like the competition is going to take over this database market. Let us also get into it,' and they started swimming.


Why did you leave IBM?


I wanted to build technology that would be based on an open system. IBM was very reluctant at that time to accept anything other than proprietary systems -- we were all pushing UNIX. IBM would not give me the resources.

I decided, let me go, and I'll find a way to build a database that is portable. It gave me a lot of freedom to do what I wanted to do and to make a sizeable amount of money. That is kind of rare that you do what you want to do and make money, too.


How important to business today are the database products you helped create?


To give you a comparison -- Windows and Apple made a big change in the use of computers by nontechies -- it's the same way SQL and DB/2 changed (businesses). To use the old legacy databases, you had to be a computer programmer. SQL actually was invented and tested by nonprogrammers.

The word was UFI -- user-friendly interface. We wanted to structure it so nontechnical people could use it, to bring databases to the masses. Before that, it was kind of a mystery.


What were the challenges?


The biggest challenge was how do you make it useful, and, at the same time, provide performance. One of the bugaboos, by the traditional people, was if you make it useful and user-friendly, you have to sacrifice performance. You cannot achieve both.

In research, we were challenged. We were given a bunch of canned transactions from the financial side, from the manufacturing side, the distribution side -- they have a bucket of transactions. Then you run it against IMS and SQL, our own database, and then prove we are within 10 to 15 percent of the response time from a performance point of view. That's what made it possible to commercialize the idea.


How important are databases to the health care market?


It's very important, especially nowadays with HIPAA (Health Insurance Portability and Accountability Act of 1996). Because databases come, inherently, with security -- only the proper person can access the data and they also log who accesses what data. Still, there is a problem in the health care industry because the database is fragmented.

There is no integrated database inside a hospital. That is one of the regrets I still have, even though I have been here 10 years. I'm not able to change the health care information industry dramatically because they are very slow in accepting an integrated database concept.


What's the problem?


A laboratory will have its own database system. The radiology department will have its own. Finance, patient care -- they're all islands of databases. They build bridges (between the systems). But what they don't think about is, why can't I have a unified system so I can avoid building bridges? They always collapse -- the bridges -- because they don't anticipate the need.

That's what slows it down -- the growth of information systems in hospitals. In a physician's office, they have a different system; it's hard to communicate between the hospital's system and the physician's system. There are not many database standards there.


How do you get the word out about your offerings?


All of our selling so far has been reference selling. That's all we do. This is very important in health care because they are dealing with patients. Health care is different from everything else because the salespeople for a hospital are actually physicians.

If they don't admit patients, hospitals cannot exist. But the physicians are not employees of the hospital. They can't induce them, because that is against the law, so they have to somehow manage and buy the physicians' loyalty.

Because physicians are the people who admit the patients, they have a lot of influence on what a hospital does. So they also have an influence on information systems -- but it's indirect, and we can't approach them because they are not employees of the hospital.

That's one of the reasons it takes a longer time to get accepted any new ideas inside a hospital, because there are patients, there is the administration of a hospital and there are physicians. They want to make sure the physicians are going to accept the process or the idea or the technology, and the physicians are always busy.

Trying to coordinate all of them takes a long, long time.


How do you stay on the cutting edge technologically?


Constant training, conferences, we always bring in new people. If you don't have people in your organization below (the age of) 30, the organization is doomed.

Because in two or three years, they are going to be the people really running not only in R&D, but in marketing and sales. That's my philosophy.


How do you keep employees in the fold?


Motivation is different for different people. For technology people, their main motivation is, are they working on leading-edge tools. Second is salary, and third is benefits.

One of the things we also do well, we take the same developers and expose them to our customers as part of the install (process), so they get to know the customers. They can really see their product, their code and their implementation is getting used by end-users. That is very satisfying for them.


What metrics other than sales volume do you use to measure your business?


How long they remain as a customer. The average length of our customer is eight years. Do they give you repeat business?

The way we sell our product, even today, is reference selling. Can I use them as a reference? We are very proud to say almost all our customers are referenceable. I don't think any other companies can say that.


Where is the growth in the marketplace?


We have been concentrating right now on the U.S., but now, what is happening there is a trend. European Union countries, especially Germany and England, are beginning to model their computer systems like the U.S. Even though their health care industry is national, from a clinical point of view, they are trying to model it after the U.S., even though their financial systems are very different. So we are also looking a little bit overseas for growth.


Do you plan to sell Integrated Informatics like you did your other two companies?


No. We are actually looking for some acquisitions. What we are looking for is a company that will complement our product and that's got a customer base. Health care, several sales are through reference sales, so having a customer base always helps. That is what we are looking for right now.


HOW TO REACH: Integrated Informatics, (678) 323-1093 or www.ii-i.com