A number of vendors from outside the medical industry are casting a lustful eye at the trillion-dollar healthcare market, but many are finding it uphill work to conquer even a small piece of that market. The task of building a brand can be
A number of vendors from outside the medical industry are casting a lustful eye at the trillion-dollar healthcare market, but many are finding it uphill work to conquer even a small piece of that market. The task of building a brand can be daunting, especially with customers who are by nature cautious and cost-conscious. And the dot-com backlash has had its own negative effect on firms trying to break new ground.
The multibillion-dollar medical imaging equipment industry has been a favorite entry point for nonhealthcare vendors, particularly from the graphic arts sector, all of whom are seeking to apply their expertise in working with large image files to capture new clients in healthcare. After all, Kodak, Fuji, and Agfa, to name just a few, have already established that precedent.
But it's been slow going for relative newcomers like Wam!Net. After hanging out its shingle in the radiology market in 1998 (PNN 4/99), the networking firm did not see the influx of clients it had anticipated.
"We had a hard time pitching ASP two years ago, pre-ASP furor," said Mark Hunter, director of marketing for Wam!Net. "We've used our time since to harden our storage and transport services and focus our effort on sales."
Wam!Net has also broadened its marketing strategy to include the whole spectrum of healthcare, rather than focusing solely on radiology. The company has moved actively into closing partnership agreements with application providers to increase its market penetration, according to Hunter.
"In our healthcare initiative, business development has been more staid," he said. "We're not approaching medical with a mass-market format, but are moving forward with an application model. Generally, we don't have site reach into the customer, and our partners don't have the electronic reach outward. We consider ourselves an application integration service provider."
Wam!Net's private, global IP-based network-which the company claims is the largest such secure network in the world-is an attractive incentive to potential joint-venture partners. Wam!Net has agreements with 600 to 800 telecoms around the world and an agreement with Winstar Wireless for fixed wireless, Hunter said. The company also boasts satellite link capability and telecom management services and plans to invest another $200 million to further upgrade its network.
"We want to make alliances with application providers because we can bypass the telco piece and enable them a lot more quickly," he said. "Application vendors can plug into us like a power grid."
Wam!Net's overtures have been well received thus far. The company announced several new relationships at the 2000 RSNA meeting, including Stentor, Vocalex, FileLink, and CMore. This year's HIMSS conference should offer the firm more opportunities to bring additional healthcare partners into the Wam!Net fold. While the company will not have a booth at the meeting, it plans to be very active, conducting partner meetings and supporting partners in market outreach efforts, he said.
Although partnering is an increasingly critical component of Wam!Net's healthcare strategy, the firm has not given up on direct sales. It increased its slate of professional services through the acquisition of is.com last November, which enables Wam!Net to build and implement backend systems and infrastructure. is.com's specialty is connecting legacy systems and centralizing information access, Hunter said.
"Having is.com moves us farther up on the value chain and into the planning process," he said. "We're finding in one-on-one deals that it's good to bring is.com to the table because it gives us more ability to meet the client's needs."
While the healthcare vertical represents only a small part of Wam!Net's revenue, accounting for less than $1 million of the total $25 million, Hunter anticipates that the company's market share will expand rapidly over the next 24 months. The firm counts 10 healthcare customers for its core networking and storage products, including DIANAssociates (Digital Imaging Acquisition Networking Associates), the telemedicine provider to the U.S. Immigration and Naturalization Service (INS). As part of the INS contract, Wam!Net is putting the final touches on a new application for radiology that uses job tickets and metadata to link radiology reports and findings to the images.
As for the ostensibly ailing e-health market, Wam!Net maintains that successful implementations are the key to winning customers. HIPAA will also be a driver of healthcare revenue, but Hunter expects that most of those revenues will not materialize until the last 12 months of the compliance cycle.
"The direction is clear in e-health, but it's a question of speed," he said. "No one will make a major market play here. Some of the events around WebMD are a telling story. Healthcare traditionally doesn't move too quickly; customers will gravitate toward proven products."