This is the topic of a really interesting LinkedIn discussion: Will EHR Vendors Become Service and Consulting Companies?
I think this is a really great question and one that’s worthy of serious consideration. I think we’ve seen this happen time and time again in the IT industry. Some of the best examples are IBM, HP, and Dell. As their IT hardware and software becomes a “commodity” then they leverage their relationships and domain expertise to change into a service and consulting company. Usually this also involves them spending their extra cash to acquire the leading consulting company (or companies) in the industry as well.
In some ways we’re already seeing this happen. Epic announced a consulting division of their company in order to retain their senior staff. Cerner’s always made a good chunk of their money from consulting services.
Of course, thanks to meaningful use incentive money and some still massive upgrade costs, EHR vendors haven’t needed to shift their business model to a service and consulting model yet. There’s still plenty of money to be made just selling the software, training, etc.
What will also be interesting to watch is whether the large service and consulting companies like Accenture, IBM, HP, Dell, etc. will eat up the market share so that the EHR companies don’t have as much of an opportunity to grow a service and consulting business. No doubt it will be a big dog fight. Not to mention many of the current EHR consulting companies (although, you could see many of these getting acquired by the EHR vendors).
I guess my short answer to this question is: In the short term, we’re not likely to see a massive shift towards services and consulting, but long term it’s very likely to happen. What are your thoughts?