Healthcare IT supplier landscape continues to evolve

The UK healthcare software and IT services (SITS) market has been subject to significant disruption in recent years. In 2003/4, the £12 billion+ National Programme for IT in the NHS (NPfIT) put the major deals in the hands of a few large system integrators – BT, CSC, Accenture, Fujitsu, Atos – and their key application providers, notably iSOFT (now part of CSC) and Cerner. Centralisation of ICT spending in the sector promised to turn the cosy application-led market on its head – the writing was on the wall for many innovative SMEs.

Seven years on and NPfIT is a shadow of its original self. Key contracts are still in place but the deals that were supposed to deliver electronic patient records are (still) under review by the coalition government and the remaining SIs – BT & CSC – face an uncertain future in the sector. Localisation is now the order of the day and the ethos is one of making the most of what you’ve got, connecting existing systems rather than ripping them out and replacing them with untested alternatives. There are opportunities for SMEs once more.

What does this mean for the supplier landscape? Software is still very important to the sector – 12 of the top 20 players are predominantly software providers, including some strong healthcare application specialists – but it is very different from the world pre-NPfIT. National Programme suppliers BT, CSC, Atos, iSOFT and Cerner are all in our 2011 Top 10 and key subcontractors on the Programme, Logica and Dell (thanks to its Perot Systems acquisition) are also in the Top 20. Business process outsourcers are also rising up the ranks. The Top 10 now includes both Capita, which has set its strategic sights on the sector and grown both organically and via acquisitions; and Steria, which runs the largest business process services deal in the sector, the NHS Shared Business Services joint venture with the Department of Health.

Perhaps unsurprisingly for a historically application-led market characterised by small and medium-sized providers, there remain plenty of acquisition opportunities and consolidation looks set to continue apace. Many of the companies from the second half of the top 20 and a host of players below that could be potential acquisition targets were they willing to sell.

To access our in-depth analysis of the UK healthcare SITS supplier landscape, including our 2011 rankings for the sector, subscribers to TechMarketView’s PublicSectorViews research stream can download the UK Healthcare SITS Supplier Landscape 2011 report from today. If you have yet to join our growing customer base and you’d like further details on subscriptions Deborah Seth will be only too happy to oblige.

Posted by Tola Sargeant at '11:36' - Tagged: publicsector   health