Microsoft Corp. announced its acquisition of privately held Sentillion on December 10, 2009.  Founded in 1998 and headquartered in Andover, Mass., Sentillion develops and markets single sign-on (SSO), context management and user provisioning technologies to the provider market primarily in the United States.  The acquisition is expected to close in early calendar year 2010. Financial terms were not disclosed.

The acquisition is mutually beneficial to Microsoft and Sentillion. As a result, Microsoft will obtain strong SSO, context management and user provisioning to complement its Amalga Unified Intelligence System (UIS), while Sentillion expects to benefit from Microsoft's technical and global resources. Microsoft's global sales and support offices will help Sentillion to scale it customer base beyond its current footprint of the U.S., Canada and the U.K.   Sentillion's customer base of 170 customers representing 1,000 hospitals also presents an attractive cross selling opportunity for Microsoft and Amalga UIS. 

The acquisition builds off an ongoing business relationship between the two companies.  Sentillion is currently a Microsoft gold certified partner and Microsoft’s preferred Identity and Access Management partner for healthcare.  In June 2009, Sentillion announced a licensing agreement with Microsoft to allow its SSO and context management technology to be a featured module of Amalga UIS.

This acquisition is consistent with Microsoft's platform strategy of adding applications that add value to the ecosystem.  Sentillion's product line will help Amalga customers address the heterogeneity inherent in a complex and fragmented health system and ease physician collaboration as they navigate the clinical and administrative systems deployed across the enterprise.

But where does the acquisition leave Microsoft technology partners that compete with Sentillion?  Microsoft states that it will support Amalga customers using competing SSO and user provisioning products.  However, the acquisition will undoubtedly vex Microsoft's healthcare technology partners in the SSO and context management space.

What's your take on the acquisition?