A wave of health IT innovations still struggling to crack entrenched industry roadblocks

Lack of ubiquitous interoperability a lingering vexation in the healthcare sector

TBR believes the pace of health IT innovations will continue, and even accelerate, especially as value-based care takes hold of the healthcare sector. However, full realization of the benefits of new healthcare technologies will continue to be deferred until we have, according to the Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma in her conference remarks, “a healthcare ecosystem where data flows freely.” In the same forum at HIMSS18, White House Senior Advisor Jared Kushner added that “even with the most advanced military on Earth, the U.S. still struggles to exchange records between the DoD [Department of Defense] and VA [Department of Veterans Affairs].”

Dr. Jon White, deputy national coordinator for Health Information at the U.S. Department of Health and Human Services (HHS) Office of the National Coordinator (ONC), highlighted the challenges of enforcing regulatory rules designed to prevent data blocking during the HIMSS18 Compliance Symposium. While healthcare organizations that do not share patient information as required may face fiduciary penalties, White acknowledged that his agency has yet to comprehensively define what constitutes information or data blocking. He also described other complications stemming from fees associated with connecting health IT infrastructures and the proper reading of Health Insurance Portability and Accountability Act of 1996 (HIPAA) regulations. Even beyond these challenges, White noted that some healthcare organizations as “an out-and-out business practice,” still refuse to share data, despite the risks of fines or other consequences.

Also during the HIMSS18 Compliance Symposium, Ken Mortensen, data protection officer for InterSystems, made a tacit admission that healthcare organizations may continue to block data sharing with impunity, provided they can sufficiently “explain the rationale behind their actions” if and when they are accused of information blocking and subsequently audited by the Office of the Inspector General (OIG). TBR believes this sets a troubling precedent that may shift the focus of healthcare organizations in favor of governance versus care delivery, at least in terms of crafting satisfactory practices, policies and accounts of internal activities to indemnify against potential audits.



The 2018 Healthcare Information and Management Systems Society Annual Conference & Exhibition (HIMSS18) took place at The Sands Expo Convention Center in Las Vegas. The 2018 event was the largest yet, with nearly 44,000 attendees, over 300 educational sessions, and over 1,350 vendors demonstrating their healthcare IT solutions.

Aggregated lateral movement and more: EY’s latest SOC serves the GCC

Covering the evolution of digital transformation centers over the last few years, we’ve frequently noted that new ways of working have infected many traditionally structured and operated organizations, often through nontypical talent and specially designed workspaces (yes, we’re talking about “funky chairs”). The latest development may be the most surprising as it comes from EY, a long-established and traditional firm in one of the most conservative services lines. EY’s newest security operation center (SOC), which services the Gulf Cooperation Council (GCC) countries, opened its doors in Oman at the end of 2017 and serves local and regional clients with cybersecurity and analytics offerings. According to EY, the center was designed to attract and retain talent, while also reinforcing EY’s strengths around industry expertise and creating opportunities for new EY clients, with layers of activity that call to mind the aggregated lateral movement of security threats (but in a good way).

Constant challenges: Managing talent and clients while delivering security

To tackle the challenge of attracting and retaining talent in the GCC, EY has relied on a staff that is a mix of local nationals and expatriates, acknowledging that increasing the local talent pool will remain a strategic priority over the next decade. While local governments and universities have invested in science, technology, engineering and mathematics (STEM) studies and even cybersecurity specifically, the number of graduates needed to meet local demand will not reach scale for four to five more years, with maturity in security talent coming another five years after that. An additional way EY has addressed this shortfall has been to make the local security work as appealing as possible — the Level One employee staring at a screen identifying false positives has been replaced with analytics and automation in a mixture heavily reliant on EY’s developing security capabilities and enhanced by analytical models, rather than use cases. In the GCC SOC, the entry-level talent begins at Level Two and is investigating all the time, according to EY’s local leadership. Notably, for a region not known for its gender-diverse workforce, roughly half the professional security staff is women in some GCC locations, proving the local governments’ STEM investments are paying off.

While solving for the talent problem, EY must also address client needs, specifically around an operating model that accommodates regional legal structures and plays to EY’s industry expertise strengths. Not surprisingly, Oman as a generally neutral, trusted and respected member of the GCC provides a solid base for a regional security center. Also not surprisingly, EY’s current SOC clients come from government entities, oil and gas companies, and the financial services industry. Quite surprising to TBR was EY’s ability to draw new clients to its new SOC. Typically consultancies have sold security services to existing clients, and almost all clients brought through the new digital transformation centers have already had well-established relationships, making this GCC SOC doubly unique.

Super 7 webscale ICT capex spend will reach over $63B by 2022, driven by investments in network capacity and data center builds and expansions

HAMPTON, N.H. (March 2, 2018) According to Technology Business Research, Inc.’s (TBR) 1Q18 Webscale ICT Market Landscape, Super 7 webscale ICT capex will grow at a 19.5% CAGR to over $63 billion in 2022 as these companies continue to invest in network capacity to support traffic growth, and data center builds and expansions to support their cloud businesses. Microsoft and Alphabet are leveraging strong ICT capex spend to help Azure and Google Cloud close the market share gap with Amazon Web Services (AWS).

Additionally, the Super 7 are developing machine learning (ML) and artificial intelligence (AI) features that will become table stakes for cloud providers, though development is not capex-intensive. Cloud providers are investing in AI and ML to differentiate their core solutions, but the market for these technologies is nascent.

“AWS is the leading IaaS provider by revenue, but Microsoft Azure and Google Cloud are growing revenue faster than the incumbent due to years of data center investment across geographies. Microsoft is closing the gap quickly and will challenge AWS in the short term, while Google, which was later to the market, is more of a long-term threat,” said Michael Soper, a senior analyst at TBR. “Beyond data centers, webscale companies are making undersea cable investments to support cloud and video traffic growth. Alphabet, Amazon, Facebook and Microsoft will continue to build these networks to carry traffic across oceans and typically partner with each other as they do so.”

After significant ramp-up in network infrastructure and services spending among the Super 7 in 2017, incumbent vendors will likely experience volatility in the webscale market in 2018. Vendors are coping with a lower level of loyalty from webscale companies, when compared to their traditional customers, as they leverage contract manufacturers and/or their own design teams for new infrastructure. The success of ODMs such as Quanta, Arista, SuperMicro and Celestica, along with new efforts to capitalize on the webscale market from IT services providers, will further fragment the supplier landscape.

TBR’s Webscale ICT Market Landscape tracks the ICT-related initiatives of the seven largest webscale companies in the world, known as the Super 7, which includes Alibaba, Alphabet, Amazon, Baidu, Facebook, Microsoft and Tencent. The report provides a market assessment, deep dives into company strategies and analyzes capex trends, particularly as they pertain to ICT. Vendors are also covered from the perspective of relative opportunities with webscale companies as customers.


9 floors of innovation, intelligence and industry

Nine floors filled with experts, emerging technologies, partners and clients, all centered on a simple formula: innovation, intelligence and industry, plus rotation to the new while developing new skills.

Counting down to today; investing in tomorrow

A bit of history: Five years ago, Accenture dedicated its Bangalore assets to delivery, focusing on quality, productivity and lowering clients’ (and Accenture’s) costs. Four years ago, the company announced a “rotation to the new,” partially in response to a confusing world of emerging technologies. Three years ago, Accenture’s expectations for the future included everything becoming liquid, intelligent and connected. Last summer, the Bangalore Innovation Hub became an advanced technology center, focused on innovation, intelligence and industry. According to Accenture Technology Group Chief Executive Bhaskar Ghosh, expectations have become reality as Accenture, under one roof, combines those three elements with emerging technologies and a newly skilled workforce. The company invested more than $3 billion in fiscal year 2017 — in training, acquisitions and assets/IP — and will continue to invest this year to build further, cementing its market leader position.

One notable exception to nearly every innovation/experience/collaboration center TBR has visited over the last two years: Accenture has devoted two floors in Bangalore to technology partners, with dedicated professionals and space marked specifically for SAP, Oracle and Microsoft, three partners TBR highlighted in its October 2017 coverage of Accenture: “As Accenture strives to generate a vast majority of its sales from in ‘the new,’ a profitable relationship with the Big Three will be critical to success.” While unmistakably an Accenture facility — no client could be confused about where they are, even when seeing SAP- or Oracle-centric solutions — the investment in resources and physical space to technology partners may be unique across Accenture’s peers. One floor houses just Avanade, the company’s joint venture with Microsoft. TBR has argued for years that consultancies maintaining technology vendor agnosticism should still recognize their clients’ core IT systems will still be there even after the client spends a day being amazed by emerging technologies and all that digital transformation can do. Highlighting, or at least including, these technology partners should be part of any client workshop or design-thinking day. Combined with the “Business Groups” created with SAP, Oracle and, recently Pivotal, Accenture has taken a giant leap forward and literally built separate floors dedicated to these partners.



On Jan. 24, 2018, TBR attended Accenture Technology’s Analyst Day at the recently opened Innovation Hub in Bangalore, India. The event included technology demonstrations around specific industries and partners, as well as extensive discussions with Accenture executives.

Higher demand for cloud- and software-mediated network solutions drove stronger revenue among leading enterprise NIS suppliers

HAMPTON, N.H. (Jan. 11, 2018) — According to Technology Business Research, Inc.’s (TBR) 3Q17 Network Infrastructure Services Benchmark, migration to cloud- and software-mediated network infrastructure accelerated, spurring low-single-digit growth among benchmarked network infrastructure services (NIS) suppliers, including growth in all benchmarked services subsegments.

“The enterprise network is evolving as large enterprises, in particular, build cloud architectures to connect and control distributed branch locations more efficiently,” said TBR Analyst Patrick Filkins. “To align with this shift, NIS suppliers are driving engagements around professional services. Services-led suppliers, such as IBM and Accenture, are well positioned as vendor-agnostic NIS providers able to integrate and manage multi-vendor, multi-tenant architectures.”

Additionally, demand for professional services is spurring product-led suppliers, such as Cisco and Juniper Networks, to hire new talent for cloud- and SDN-related network rollouts and systems integration. This targeted investment in new headcount among product-centric suppliers will remain limited, though, as these companies will continue to rely on maintenance services to generate the bulk of NIS-related revenue.

TBR’s Network Infrastructure Services Benchmark provides quarterly analysis of network suppliers’ performance in the deployment, maintenance, professional services and managed services markets. Suppliers covered include Accenture, Avaya, Cisco, Dell EMC, Fujitsu, HPE, Huawei, IBM, Juniper Networks and Microsoft.


HITS vendors met a throng of sector-specific and external headwinds to round out 2017

HAMPTON, N.H. (Jan. 10, 2018) Healthcare IT services (HITS) trailing 12-month revenue continued to slow in 3Q17, falling to 3.8% in 3Q17 from 5.4% in 2Q17. The ongoing trend of decelerating sales growth owes largely to a dearth of strategic acquisitions by the HITS companies tracked by Technology Business Research, Inc. (TBR), turbulence in the U.S. payer market being drawn out by U.S. legislative inaction on proposed reforms to the Affordable Care Act (ACA), and a series of natural disasters in North America during 3Q17 that impacted provider IT spending patterns.

“The ongoing absence of a legislative resolution to the ACA-reform process continues to generate significant downward pressure on sales in the health insurance sector,” said Senior Analyst John Caucis, TBR’s public sector and healthcare lead. “The M&A-generated tailwind on HITS revenue growth through 2016 has all but dissipated, save for Allscripts’ acquisition of McKesson Enterprise Information Solutions and a handful of smaller-scale acquisitions by Allscripts’ HITS counterparts. Compounding the impact of weak health payer IT spending on overall HITS growth were the natural disasters that occurred in 3Q17: hurricanes Harvey, Irma and Maria, which impacted the Caribbean and the U.S., as well as a pair of earthquakes in Mexico.”

The final participant tally from the open-enrollment period that ran until Dec. 15, 2017 (8.8 million enrollees, down from 9.2 million in 2016), suggests the current lull in payer IT spending may persist, though a growing number of HITS vendors believe the IT investment trough among health insurers has been reached. Aside from the current solution focus on analytics, population health management and revenue cycle management, opportunities for HITS solutions, as well as advisory services, will emerge in 2018 in ambulatory and post-acute care, behavioral health, and employer services.


Equipment vendors continue to struggle with lower sales volume, while IT services and software-centric companies enjoy growth, thanks to digital

HAMPTON, N.H. (Jan. 5, 2018) — According to Technology Business Research, Inc.’s (TBR) 3Q17 Telecom Infrastructure Services Benchmark, leading vendors are making significant strategy changes and retrenching around their core competencies to weather subdued communication service provider (CSP) spend.

“Leading vendors are realizing they must transform themselves before they can effectively help their customers transform,” said TBR Telecom Senior Analyst Chris Antlitz. “New technologies and processes, particularly in the areas of cloud, artificial intelligence, cognitive analytics, automation and DevOps, promise significant agility, better outcomes and cost savings, and vendors must not only offer solutions that leverage these technologies to their customers but also adopt and employ these technologies internally to be credible, differentiate and remain competitive.”

Tier 1 network solution providers (NSPs) are going back to their product-led roots and doubling down on partnerships. Huawei, Ericsson and Nokia are all transitioning back to being product-led, which is an about-face from their prior strategy of being services-led. This strategy shift indicates that product-centric vendors have realized that the optimal go-to-market model is to stick to their core businesses and core competencies as much as possible and augment capabilities with partnerships.

TBR believes this strategy shift means NSPs will increase emphasis on product-attached services, which is their main telecom infrastructure services (TIS) profit pool, particularly maintenance services. This retrenchment by NSPs will also enable IT services companies to have a clearer path to capitalize on digital opportunities.

TBR’s Telecom Infrastructure Services Benchmark provides quarterly analysis of the deployment, maintenance, professional services and managed services markets for network and IT suppliers. Suppliers covered include Accenture, Amdocs, Atos, Capgemini, CGI, China Communications Services, Ciena, Cisco, CommScope, CSG International, Ericsson, Fujitsu, Hewlett Packard Enterprise, Huawei, IBM, Infosys, Juniper Networks, NEC, Nokia, Oracle, Samsung, SAP, Tata Consultancy Services, Tech Mahindra, Wipro and ZTE.