Tech Data Health-Care Revenue Doubles

Tech Data's health-care business has doubled over the last year and revenue should continue to increase as more VARs sell electronic health records (EHR) and other solutions to customers, said Barb Miller, vice president of services.

"It's a good business to get into right now because the government is paying doctors and hospitals to implement new systems," Miller said. "But it's also good for the long run because so many new technologies are coming into place. It's almost like a never-ending pie."

Tech Data's success over the last year is due in large part to the establishment of its healthcare specialized business unit a year ago that increased the distributor's focus on that vertical market and led to the addition of several vendors and integrated solutions offered to VARs, Miller said from Tech Data's Healthcare Partner Summit in Las Vegas. More than 50 VARs gathered at the conference this week to hear about the latest in health care technology and trends.

Tech Data tracks revenue related to health care through its order processing systems that can flag resellers' purchases directed toward end users in the health care industry, Miller said.

At the Healthcare Summit, some members of Tech Data's TechMed Alliance, an organization of more than 300 VARs focused on health care, gathered to hear what's coming down the pike and how to capitalize on the need for electronic health records (EHR) by medical customers.

"What's driving this is our traditional vendors of networking and servers, but Tech Data has given us freedom to find neat new vendors in new marketplaces," Miller said.

The conference allowed Tech Data to showcase its three EHR software vendors: Greenway Medical Technologies, gloStream and Sage Healthcare. The distributor also announced that it has established distribution agreements to carry JAOtech's SmartTerminal patient bedside computers and LuxNex Technology's LED fixtures and bulbs.

Gregg Hammerman, director of business development and strategy at gloStream, Bloomfield, Hills, Mich., said partnering with Tech Data to get its solutions to market will be key to what is expected to be incredible demand over the next couple of years.

"There are 600,000 doctors and a very small percentage of them have strong [EHR] systems. There are strong incentives to buy in a short period of time. It's going to take more than one company or five companies to succeed," he said.

Next: Health Care Investments Pay Off

Greg Shilling, vice president of business development at Greenway, Carrolton, Ga., calculated that 20 EHR vendors would need to complete about 250 deployments per month for the next two years to meet the demand to implement EHR solutions for every physician in the country. "The demand is going to outrun the entire industry's capability to deliver. As software developers, we need to reach out to distributors and integrators to reach that scale," Shilling said.

All told, Tech Data has about 3,000 VARs actively selling IT to health-care clients, Miller said. "And more and more seem to be joining. They can sell networking stuff already but they can learn new things."

Selling health-care solutions requires an investment to fully understand the regulations and needs of customers in that space, Miller said.

The bottom line is there's a lot of stuff to learn but the payoff is worth it. But they need to act now because the tremendous growth is now. There is a sense of urgency," she said.