VARs Play Growing Role in Booming Healthcare Market

Frost & Sullivan Program Manager Imran Khan predicts that the channel's share of IT healthcare solutions spending will grow from approximately 30 percent currently to between 35 and 37 percent within five to 10 years as telecom and IT vendors become more dependent on the skills and geographic reach of VARs.

The healthcare market presents significant and growing revenue opportunities for channel partners, but they need to understand their customers' needs for operational efficiency and regulatory requirements to successfully capitalize on the situation, a top industry analyst says in a new report.

Imran Khan, program manager for Frost & Sullivan research firm, said he expects VARs and other solution providers to play a greater role in providing healthcare solutions during the next few years because IT and telecom vendors are growing more dependent on them to efficiently serve the midsize and small healthcare market segments.

"VARs have resources that can be deployed fairly quickly, and as the local agent of a vendor, they can respond in just a few hours," Khan noted. "That's where the value proposition (of the channel) comes in. Smaller VARs and system integrators can get to that customer quickly and solve their problems."

Khan predicts that the channel's share of  IT healthcare solutions spending will grow from approximately 30 percent currently to between 35 and 37 percent within five to 10 years. "You are going to see a lot more dependence on channel partners as the competition becomes more intense," Khan said. "Organizations are going to use channel partners as the smaller players who can bring them more presence locally and regionally."

To capitalize on this evolving situation, channel partners need to be able to successfully identify the key decision-maker in a healthcare organization; learn the purchasing cycle that impacts that person; and understand the economic problems that healthcare companies face and how technology can solve them.

"You have to understand what the challenges are," Khan said. "For example, with the economy in a downward spiral, there are going to be more people without health insurance and more unpaid bills for health providers." Companies will invest in technology solutions that can help them better manage this problem, he said.

In a new analysis of the North American healthcare service and solution market, Khan noted that healthcare firms generated revenues of $1.9 trillion last year. He predicted this will reach $2.6 trillion in 2012. IT services are a growing segment of that huge market.

"The healthcare vertical is witnessing s tremendous amount of technological evolution, necessitated b the changing market environment," he noted. "The healthcare vertical is booming, but large hospitals are struggling to maintain their profitability."

Healthcare providers of all sizes seek technology solutions to help them cope with their own rising costs, operational inefficiencies and regulatory requirements.

He added that healthcare companies are spending on items such as IP telephony, data transport, business process applications and hardware and network security. "The relative lack of in-house IT resources across several healthcare organizations presents IT and telecom vendors with the opportunity to provide network consulting, integration and management services," he added.

The channel is playing a growing role in effectively delivering these solutions on behalf of vendors such as Cisco, AT&T, Verizon, Sprint Vocera, Paetec Communications, Siemens and others, Khan added.

To be successful, Khan said VARs need to understand precisely how their healthcare customers are trying to control their costs and be able to deliver effective installation, break-fix service and after-sales support. Networking skills also are prized.

"Network management skills are going to be very sought after," he said. "The ability to monitor the network is a very valuable skill set."

TAGS: vertical,healthcare,VARs,channel,revenue growth opportunity

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