A year ago, Microsoft CEO Satya Nadella mandated the formation of Microsoft Healthcare NExT — a division within Microsoft to improve healthcare.

Now, that group is bearing its first fruit: Microsoft Genomics, a gene-sequencing service developed with St. Jude Children's Research Hospital.

Microsoft Healthcare NExT head Dr. Peter Lee says the challenges are hard, but there are lots of benefits, tangible and otherwise, to this healthcare push.

A year ago, Microsoft CEO Satya Nadella tasked Microsoft Research NExT — the company's A-team of troubleshooting scientists — with a new mission: Take the company's most cutting-edge tech and apply it to improving healthcare.

Microsoft Healthcare NExT head and corporate VP Dr. Peter Lee tells Business Insider that this new mandate was so broad, it was a little bit like being dropped in the middle of the ocean and told to find dry land.

"There's no sign of which way is the right way, and you could swim really far in any one direction before realizing you were going astray." And, of course, he says, healthcare is a field that many tech companies have tried to tackle, and failed. You might think you're making progress, but "then you look down and see the people drowning."

"There was a time where we were just floundering," Lee says.

Now, though, Lee feels like Microsoft's efforts have finally begun to bear fruit, in the form of real, actual products that are making a difference to healthcare organizations, hospitals — and patients' lives.

For instance, on Wednesday, Microsoft announced the general availability of Microsoft Genomics, a gene-sequencing service available to doctors and researchers via the Microsoft Azure cloud platform. That platform was born directly out of joint research between Microsoft and St. Jude Children’s Research Hospital.

Microsoft researchers discuss Microsoft Genomics, the company's new gene-sequencing tool, powered by the Microsoft Azure cloud. Microsoft

"We already got one product out of this push," says Lee.

Similarly, Microsoft is announcing the availability and expansion of other partnership-driven services. Microsoft and India's Apollo Hospitals teamed up for a new artificially-intelligent system for detecting tell-tale signs of heart disease in patient data, for instance; it also partnered up with UPMC for Project Empower MD, a note-taking tool for doctors.

Lee says it's been extremely rewarding: The biggest motivator for his team is getting to make a difference in people's lives. Plus, Healthcare NExT gets to work with cutting-edge technology, like Microsoft's partnership with Seattle-based Adaptive Biotechnologies, which is attempting to use AI to detect cancers and other serious maladies with a simple blood test.

"It's just cool beyond belief," says Lee of Adaptive.

Lee says there are more material rewards, too, as these products open new markets for Microsoft — important, as some analysts estimate that healthcare cloud computing could be a $35 billion market by 2020.

Doctors, surgeons, and researchers have long needed these kinds of tools, says Lee, and Microsoft is happy to deliver. He says healthcare is becoming a "very large business" for Microsoft.

"We don't talk publicly about the dollars, but it's large," says Lee.

Not drowning yet

The key that helped Microsoft Healthcare NExT find its way was to take a bigger-picture approach, says Lee. The starting point was to look at the so-called "hyperscale" clouds from Microsoft, Amazon, and Google, and try to picture what the world would be like without them.

With that in mind, Lee says, Microsoft started making bets. The Microsoft NExT "standard playbook" revolves around forming individual, internal "startups" with their own funding and purpose-driven mandates, so the engineers and scientists on the team got organized and got moving.

Some of those self-styled "startups" started using the Microsoft Azure cloud to provide gene-sequencing supercomputing power, resulting in the service now known as Microsoft Genomics. Others focused on neonatal care, or better software for doctors, or improved ways to take patient measurements.

St. Jude researchers use Microsoft Genomics. St. Jude Children's Research Hospital

In all cases, Lee says, the key was for Microsoft to work closely with patients — as they did with St. Jude for Microsoft Genomics.

"We appreciate that Microsoft is investing in genomic research and that they took the time to understand and appreciate our unique mission at St. Jude Children’s Research Hospital: finding cures and saving children," St. Jude CIO Keith Perry told Business Insider via e-mail.

And for his part, Lee says the team has found a lot of "inspiration" in working directly with healthcare providers, and the patients they service. In working on Microsoft Genomics, he says, he and his team have made several pediatric cancer patients — renewing their drive to do better, faster. He says it's "incredibly motivating."

Which is good, because he says Microsoft has "found its way forward." There's no more floundering, he says, just promising movement in the right direction. For instance, Lee's group is now working on an intelligent chatbot for pharmacies that can help patients reorder prescriptions and answer questions about their medications.

As for himself, Lee describes himself as a "second-year grad student" — he's accumulated enough knowledge in the healthcare space to understand what the experts on his team are talking about and make decisions, but not enough to weigh in and participate in the research himself.

Still, he says, he's learning fast. And if he hasn't quite found dry land, he says he's beyond just treading water.

"I haven't drowned yet," says Lee.