Verizon gets 'healthy'

After the energy/smart grid market, perhaps no other vertical solution area is more ripe for picking than health care.

Not only is it a sector of the economy in need of a massive overhaul -- healthcare spending as a percentage of GDP in the U.S. is growing to downright scary proportions, not to mention a little thing called health care reform slow-plodding its way through Congress -- but for telecom service providers, telemedicine and related areas represent opportunities among enterprise customers, small businesses (doctors) and into the consumer's connected home of tomorrow.

Overall, the global market for telemedicine is expected to exceed $18 billion, according to a report last year from Global Industry Analysts Inc. Of particular note: the addition of telecommunications capabilities to enable remote or otherwise network-enabled medicine touches on almost all medical domains, including radiology, cardiology, dermatology, psychiatry, dentistry, pediatrics and pathology, among others.

With that massive market in mind, telecom service providers of all shapes and sizes are pursuing this vertical. In 2009, Verizon put its stake in the ground. Serving health care customers certainly wasn't new to the carrier. But beginning with exploration early in the year to the formal launch of its still relatively new Connected Health Care vertical group last summer, Verizon is now targeting this opportunity as strongly as anyone. At launch, Verizon said it was focusing its efforts on three key initiatives within health care: the need for higher quality care, the need for universal care and the need for greater efficiency. Those high-level needs map to three solution areas – mobility, health care information management and telemedicine.

Here's how they've spent the past year going after this opportunity.

Putting Health Care in Focus
Verizon launched its health care as a distinct unit within its global services business unit in August. Within that specific vertical practice, it currently employs about 15 to 20 solution experts/consultants that define the company's health care program and work closely with its largest enterprise customers , along with about 500 sales people with some level of health care expertise. That core group acts as an "overlay" to the various support groups that need to deliver the services it defines. Beyond that, Verizon is increasingly verticalizing its marketing, customer service and network groups in order to acquire the specialized knowledge and focus they need to serve health care customers -- an ongoing process within a very large company like Verizon, said Nancy Green, managing principal-health care practice at Verizon Business.

The group doesn't split out revenues, but its customer base is relatively huge -- 17,000 health care enterprise customers in markets including medical service providers, payer firms and pharmaceutical companies, representing about 90% of Fortune 100 health care companies. In addition, Verizon serves several hundred thousand small physician offices, which represent a combination opportunity to sell both SMB-style services in addition to more targeted health care solutions.

Analysts give Verizon good marks for its health care efforts but caution it's still early in the game. "Verizon has made a good-faith effort to move into the healthcare space, but how successful it will be is still to be determined," said Christine Chang, analyst, healthcare technology for analyst firm Ovum. "Currently, it is approaching the healthcare market from a number of different vantage points. Some of these approaches will likely be more successful than others. Many other telcos are in the healthcare space. Verizon is a bit late in the game. Overall, the healthcare IT market is overflowing with companies trying to gain market share."

So what has Verizon's new health care group accomplished in its first year of existence, and what can other service providers learn from its efforts?

For starters, its focus has been on leveraging its strengths -- its network -- while rapidly acquiring additional sector expertise.

"The network, at its core, is our unique proposition," said Verizon's Green. "If you look at companies that approach this from a pure consulting basis, they don't have a network, they don't have solutions and they don't have a product set. We can offer the full spectrum -- professional services, yes, things like opportunity assessment and management of that plan going forward. But we can also deliver a complete solution [of hardware and software applications] that is vendor-agnostic and equipment-agnostic."

While the Verizon health care unit takes the lead on opportunities, the past year has found the company increasingly looking at the health-care practice as a company-wide initiative, encompassing the wireline (business and consumer units) as well as wireless businesses.

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