Solventum Is Separating $1.4 Billion of Software. It Ran on a Different Clock.

Bryan Hanson runs a medical device company that owns a $1.4 billion hospital software business, and this week he explained why he is getting rid of it. The software needs a different level of investment, he said, and a different pace of innovation. That is not a complaint about the software. That is a CEO saying his company cannot run at two speeds.

Solventum plans to separate its health information systems unit, which sells hospitals software for things like computer-assisted physician documentation and coding automation, MedTech Dive reported Thursday. The unit brought in $1.4 billion last year, about 16 percent of company sales. Hanson is open to either a sale or a spinoff and expects the process to run twelve to eighteen months. What is left afterward is medsurg and dental, which is the point: he wants Solventum read as a true medtech company.

The mechanics are unusually clean, and Solventum knows it. The company came out of 3M in April 2024, and the two-year anniversary of that separation is what gave it room to start selling pieces. It has already sold purification and filtration to Thermo Fisher for $4.1 billion. Hanson's read on this one is that the software business barely touches manufacturing, so the split is about as easy as these get.

Two clocks under one roof

Device work runs on a regulatory and manufacturing clock. You freeze the design on purpose, because unfreezing it means retooling, revalidating, and answering for the change. Hospital software runs on a release clock. Its competitors ship every month, and the IT director evaluating documentation tools is comparing feature velocity, not design history files.

Put both under one P&L and one of them gets starved. It is usually the fast one, because the slow one carries the bigger revenue line and all of the audit exposure. Run that arrangement long enough and you arrive where Solventum is, holding a healthy asset that its own CEO thinks would move faster somewhere else.

I have been on the naming side of this

At Ascend Communications I was the global line manager for the access concentrator product line. Ascend was a hardware company down to its bones, and software was treated as the stuff that made the iron work. Inside those boxes sat about 30 million lines of source code I did not write. At peak, Ascend gear was roughly 90 percent of what ISPs used to connect the world to dial-up, so that code was already running most of the internet. It had no name.

Cisco had already solved this on the other end of every connection we shipped. Their routers ran IOS, a named, branded operating system. So I walked into Mory's office in Alameda, opened with "I think you're doing everything wrong," and argued that we should brand our software the same way. He asked what it would be called. I said TAOS, on the spot. The code did not change. The architecture did not change. What changed is that customers, competitors, analysts and the press had a noun to point at when they explained why an Ascend box was different.

I did not build TAOS. I recognized it, and I pushed hard enough inside a hardware-first company to get it treated as a product. That is the same recognition Hanson has made, run to the opposite conclusion. Once you name the software for what it is, there are two honest answers. This is our product and we should sell it as one. Or this deserves funding we are never going to give it. Ascend got the first answer. Solventum got the second.

What this looks like before you have $1.4 billion

Nobody reading this is separating a business unit next quarter. But the decision underneath it arrives early, and it arrives as a roadmap question. Almost every device I work on now has software that decides whether the customer keeps buying: the planning step, the calibration routine, the data pipeline, the dashboard the hospital's IT department will audit before it lets your box on the network.

So ask which half sets your release cadence. If the hardware sets it, your software team ships on hardware time. Better to decide that in year one, while it is still a staffing and roadmap question. Two things follow from it. A change that touches cleared functionality is a regulatory question before it is a sprint question, which makes your software plan and your submission plan one plan. And engineers who arrived from a monthly release cycle will not sit through an eighteen-month design freeze unless somebody told them the truth about the cadence when they were hired.

Dave Saunders is the founder of Base Reality Group and a Fractional CPO for product companies. He was a founder and operator at Galen Robotics, where the surgical-robotics platform earned FDA De Novo authorization in 2023, and he managed a 35-patent portfolio licensed from Johns Hopkins. He wrote Founders Who Finish and publishes The Build. More about Dave →