LONDON, UK: Computer maker Dell is stepping up a push into the healthcare services market following its $3.9 billion buy of Perot Systems with a new offering aimed at simplifying life for hospital professionals on the move.
Dells's mobile clinical computing service promises to cut the time medical staff waste logging in repeatedly to access patient records as they move around hospitals, with customised systems designed around the user, not the software programme.
Dell is currently the third-biggest provider of healthcare IT, lagging Hewlett-Packard and IBM by some distance, according to technology research firm IDC's estimates.
The company earlier this month created a new global business unit, Dell Services, on the back of the Perot acquisition, the largest in Dell's history. Perot specialises in the healthcare sector and government services.
"The opportunity for healthcare for Dell, it's going to be vast," Renzo Taal, Dell's director of healthcare and life sciences told Reuters ahead of Wednesday's launch of the new hospitals offering at the Medica fair in Duesseldorf, Germany.
According to IDC and fellow industry research firm Gartner, the size of the healthcare IT market in Europe alone is somewhere between $8 billion and $10 billion, rising to between $10 billion and $12 billion by 2013.
Dell made $5.7 billion in services revenue in its last fiscal year, or 9 percent of total company revenue. That figure is dwarfed by IBM's $58.9 billion global services revenue and HP's $22.4 billion.
Almost all large technology companies are expanding into higher-margin IT services to secure stable and recurring revenue as computer hardware becomes cheaper. HP bought EDS last year for that reason, and the buy has helped it through the downturn.
Regulatory Burden
Bill Nagel, security and risk-management analyst at technology research firm Forrester, compares the challenges and the opportunity for healthcare IT to those facing the financial services industry over the last five years or so.
"They're trying to improve services delivery in a very short time window, while at the same time trying to ensure that the data are secure -- all of this in the context of a pretty high regulatory burden," he says.
The new service, which bundles together offerings from various providers, aims to be a one-stop shop for hospitals who don't want to buy hardware, software and services from different suppliers.
"I see this as a kind of bridge between their hardware business and what they want their emergent services business to look like," says Nagel. "It's not a technologically revolutionary solution."
The identity-management software is provided by security specialist Symantec but Taal said Dell could also work with other partners. The system is in general open and can be deployed on a variety of hardware devices.
It will initially be available in Europe and the United States and is currently being tested by hospitals in those regions, with a view to possible roll-out in 2010.
Britain's University Hospital Birmingham trust is one of the institutions testing the new offering with a view to possibly deploying it in a new hospital building due to open next year.
"It's an exercise we're been through before with a number of vendors, but we didn't feel they were robust enough to take forward yet," says Stephen Chilton, the UHB's IT director. "The market is still maturing."
"We're keen to work with Dell on this on a grander scale than we've done before," he adds. "We do believe there's something in this."
Richard Cumbley, a partner at law firm Linklaters and an expert in information management and data privacy, cautions that Dell will have a tough time breaking out in a bigger way into the services market.
"The European landscape is littered with companies that have tried and failed to go further up the value chain. It's desperately hard to crack," he says.
Dell was due to report quarterly results on Thursday.