Swiss drugmaker Novartis wants to become a data science company and use artificial intelligence to solve some of the industry's most intractable problems.Novartis enlisted Microsoft to create an "AI innovation lab" and develop new research and applications with a focus on macular degeneration, cell and gene therapy, and drug design.Novartis has become Microsoft's shining example of "tech intensity," a philosophy championed by CEO Satya Nadella that every company needs to not only adopt tech's latest tools, but also to develop their own on top of them.The partnership is still very young, but is strategically important to both companies: Novartis wants to prove itself as a tech company, and Microsoft is striving to establish itself as a good partner to healthcare companies.Click here to read more BI Prime stories.Sign up here to receive updates on all things Innovation Inc.When Bertrand Bodson became digital officer of Novartisone of the world's largest pharmaceutical companiesin 2018, he found the healthcare industry was rife with problems that could be helped by technology.It typically takes 12 years and billions of dollars to get a drug from the lab to the market, he said for example, and fewer than 5% of patients have access to clinical trials.Bodson, formerly the chief digital officer of British retailer Sainsburys' Argos and a senior group product manager at Amazon, and other members of the Novartis leadership team agreed that the Swiss drug maker would have learn to behave like a tech company. To solve its most intractable problems, he said, it would have to figure out how to apply artificial intelligence, data science, and other cutting-edge techniques.In other words, Novartis would have to undergo what's often called a digital transformation."My sense is its non-negotiable," Bodson told Business Insider on the concept of digital transformation. "But we cannot do this alone."Novartis recently partnered with Microsoft to create an "AI innovation lab" and develop research and applications to transform the pharmaceutical company into a data science company.The partnership is still very young, and the two companies have so far done little more than set a very ambitious agenda to follow in the coming years. However, this partnership is important to both companies: Novartis, to prove that it has the technical acumen to become a tech company, and Microsoft, to show that it can be a good partner to companies in the healthcare space.Microsoft's shiftAround the time Bodson joined Novartis, Microsoft was making a change, too.The 45-year-old company through most of its history created general-purpose products meant for the broadest possible swath of customers, but has in recent years started to dig deeper into the needs of specific industries and fine-tune products to suite them.Peter Lee, a computer scientist and researcher, had long worked on broad technology problems as a key leader in Microsoft Research when he was asked by CEO Satya Nadella to take over the company's emerging healthcare vertical and find new uses for artificial intelligence and cloud computing in the industry."Microsoft traditionally is a horizontal platform company," Lee said. "When Satya became our CEO, he thought the future of transformation and evolution in tech intensity, and thought [the company] would need to get deeper, violate the horizontal nature of Microsoft and get a little more vertical, and think about how Microsoft evolves to go deep."Nadella in 2018 unveiled a new vision for Microsoft customerssomething he calls "tech intensity"which is the idea companies can get the most out of technology if they not only adopt the latest and greatest products and services, but build on top of them. Nadella has called healthcare AI's "most pressing" application.The partnershipBodson and Novartis sought out Microsoft, and met with Lee. They talked about how Novartis could use Microsoft's existing applications, or include some custom engineering like Microsoft does in its partnership with Walmartthen Lee realized Novartis' ambitions."Bertrand started to describe the vision of Novartis as a data science company, and our conversation really shifted," Lee said. The companies organized a more ambitious partnership intended to "change the game" and "lead to a real transformation."Microsoft and Novartis inked a five-year deal with two major components.The first component echoes Microsoft's original mission statement to put a computer on every desk and in every home, in that it aims to "bring the power of AI to the desktop of every Novartis associate."The companies are combining Novartis' datasets with Microsoft's artificial intelligence technology to build new AI models and applications. One of them is what Lee described as an "Excel for data science." Lee declined to share details about how the application works, beyond saying that its goal is to "democratize data science in the same way Excel democratized the spreadsheet."The other side of the partnership is research. The companies, Lee said, takes the "very best researchers from Microsoft Research" and integrates them with some of Novartis' top scientists to establish joint teams to work on "moonshot" projects including macular degeneration, cell and gene therapy, and drug design.One of the focuses is to improve guidelines for dosing frequency and treatment plans for people who have macular degeneration, Bodson said, one of the biggest causes of vision loss. The companies work together on research at Novartis' headquarters in Switzerland and one of its campuses in Dublin, Ireland, plus Microsoft's research lab in Cambridge, UK.Microsoft isn't the only tech titan with which Novartis partners. The company struck a deal with Amazon in December to use cloud technology from Amazon Web Services, Microsoft's dominant rival in the market, to build a data and analytics platform.Tech intensityNovartis has become Microsoft's shining example of "tech intensity" as it tries to sell similar products and services to other companies.Tech intensity is Nadella's idea that all industries need to adopt the latest technology platforms and toolsideally, Microsoft productsand then train their workforce to be able to create their own uses for advanced technologies like artificial intelligence.Microsoft also wants to be part of the second half of the equation, too. The company is investing in educational resources, including recently buildinga new team capable of training usersat any technical level on how to get the most out of its Azure cloud-computing business.Microsoft's focus on finding ways to tune products for specific industries is apparent in the company's hiring choices in the past year, during which it has added top pharmaceutical and health care, financial and energy executives.Lee said Microsoft's broader goal is to make data science and machine learning easier for companies of all types to use."Democratizing data science and machine learning capabilities is fundamental to tech intensity today," Lee said. "If you think of the concept of tech intensitywhere every company is a tech company not only adopting very quickly best-in-class technologies [but having its] own capabilities, for example, in data science or machine learningwhat is the path to get there'"Join the conversation about this storyNOW WATCH: People are still debating the pink or grey sneaker, 2 years after it went viral. Here's the real color explained.
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