iSOFT is one of the world’s largest providers of healthcare IT solutions. iSOFT designs, builds and delivers industry-leading software systems that serve the entire health sector. At present, over 13,000 provider organisations in 38 countries across five continents use iSOFT solutions. iSOFT, headquartered in UK, became part of the IBA Health Group in Australia through a merger in 2007.
eHEALTH caught up with Gary Cohen, Executive Chairman & CEO, iSOFT, in the sidelines of HIMSS AsiaPac ’09 held in Kuala Lumpur, Malaysia. Excerpts from the interview.
What has been the global performance of iSoft in past few years?
It has been a fantastic growth story for us in last couple of years. Our business has grown by almost 20% year-on-year, with strong growth on both revenue and profit side. We have also seen a strong growth in most of our global markets. Currently, 85% of our revenues come from the UK and European markets and Asia accounts for 5% of our total business. However, opportunities in Asia are expected increase significantly in future. Last year our total revenue was AUSD 500 million with profits of around AUSD 68 million.
What are the strategic advantages of the merger between iSoft and IBA Health Group?
iSoft became part of the IBA Health Group following a merger completed in October 2007, and subsequently, retaining the name iSoft for the merged entity, primarily due to its global recognition and brand value. We are now among the top four companies in the world that specialise in Health Information Systems and also the largest health IT company outside US.
There are several advantages of being on the top and the most obvious of them is that we are seen as the right channel by smaller companies to introduce their products in the market by combining them with our products. Thus, it gives us tremendous opportunities to get a lot of value from our global footprint. It also brings with it a very substantial portion of recurring revenues. Currently, more than 60% of our revenue comes from this recurring channel.
There are a few technology companies in the world who have a good visibility and are prominent from the customers as well as the investor point of view. We have a solid business which has a very strong cash flow as well as a very strong visibility to future earnings. This merger has not only given us the positioning and goodwill in the market, but also given us access to world-class technology which was built for a national program – the UK NHS. Most companies who create such products do not have a strong customer base, or even if they do have customers, they have to invest substantial amount on marketing and sales for new products. For us, our large customer base across the world often helps us underwrite the development and enables us to redevelop and redeploy solutions and also make them saleable in the global market. This means we are now in a unique position to take the benefit of the technology on a global scale without fearing of failure.
Are you looking forward to more mergers or partnership opportunities in the near future?
We have been looking at a number of things. In the present scenario, the global financial crisis is making it very difficult for companies with great technology or customers to grow, primarily because they cannot get access to credit or capital market. There are many companies including many American companies who have had very bad quarters. Most of the American companies haven’t done very well because the American software market is private enterprise oriented, and thereby, have suffered badly. Today, we are in the top 200 listed companies in Australia, and therefore, we would try to use our strengthened position and look at opportunities to potentially acquire or partner with other companies.
iSoft’s Lorenzo promises to bring the next-generation solution for global healthcare industry. What had been its genesis and what are its winning attributes?
Lorenzo is a unique solution that will revolutionise the way healthcare is delivered around the individual. Lorenzo is a key value element of IBA’s growth strategy. Lorenzo was first conceived in 2003 and was chosen in 2004 as the key solution for the UK National Programme for IT of UK NHS. Following several years of development and successful testing in early adopter sites in UK and Continental Europe, Lorenzo is getting rolled out in the industry.
Built on a service-oriented-architecture (SOA), Lorenzo enables healthcare providers to manage their processes while at the same time giving secure authorised access to patient information to those who need it, anywhere and at any time. One of the major features of Lorenzo is that it incorporates iSoft’s many years of clinical expertise in several thousand care activities, designed to support clinical decisions, improved patient safety and evidence-based medical practice. These care activities within Lorenzo, with its plug and play capability, are designed to maximise the retention of existing healthcare IT investments, thereby avoiding the need for a costly and risky implementation often associated with other systems.
Lorenzo is designed to adapt to existing healthcare IT systems for all points of need – from hospital to community and clinic settings. Customised for each customer’s specific needs, it also provides the flexibility to quickly respond to changing operational, legal or business requirements. It puts the patient at the centre of the healthcare journey by managing and orchestrating the information around them, at the same time protecting the patient’s unique identity through this journey. In addition, in the event that mistakes are made, the system will help provide guidance or alerts – making the delivery of healthcare safer.
What is your strategy for American, European and Asian markets?
Our strategy for America, Europe and Asia is very different. We are a big provider in the European market, so we are using Lorenzo to build relationships with many of our customers out there. We are enabling our customers to use it on top of their existing products, so that they don’t have to throw away their pre-invested technologies.
Asia being an emerging market, it is easier for them to leapfrog to next-generation technologies such as that of Lorenzo.
America being a very complex market requires significant investment in marketing. Our strategy in America is not to compete with American companies head-to-head, but instead, use our expertise by partnering with companies that have products but don’t have the architecture. Hence, out there we would like to provide the Lorenzo’s architecture or the tools set, and not push for Lorenzo’s application. Thus, in America, we want to partner with technology vendors or healthcare corporations with large IT department or health IT vendors who have lots of product but do not really have a way of bridging the solution.