Against a backdrop of challenging conditions in the UK healthcare IT market, BT, one of the key suppliers to England’s erstwhile National Programme for IT in the NHS (NPfIT), is turning its attention to the growing Asia Pac healthcare IT market. Having secured a number of contracts in Australia and Singapore recently, it’s expanding its presence in the region with the creation of an Asia Pacific Health Practice. More than 130 people will be based in the Practice, which will coordinate BT’s health activities in the region.
It’s no surprise to see BT looking for ways to capitalise on the healthcare expertise it’s amassed from its work with the NHS. Our forecasts for the UK NHS IT market show low single-digit growth post NPfIT and competition for that business will be increasingly tough. In contrast, Asia Pac is a fast growing market and one where BT’s experience in the UK is well-regarded. In recent months it’s been particularly successful at winning complex infrastructure contracts with new-build hospitals, work that is arguably closer to its ‘networked IT services’ knitting than much of what it’s been doing for the NHS in the UK (see for example BT lands Australian healthcare contract).
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BT’s increased presence in Asia Pac is unlikely to be welcomed by NPfIT rival CSC, which acquired Australia-based iSOFT/IBA Healthcare last year. CSC will also be hoping for growth in its Asia Pac healthcare business to compensate for the increasingly parlous state of its NHS contracts (see here and track back for the whole saga). Having failed yet again to reach an agreement with the Department of Health on its ‘Local Service Provider’ contracts, formerly worth some £3bn, CSC’s ‘standstill’ agreement with the NHS was extended to the end August earlier this month. The company seems less and less confident that an agreement will eventually be reached and is in the midst of a major round of redundancies at its Healthcare Group. As announced in February, 500 of the 1,700 people working on its NHS account are to be made redundant. Last week we learned that Adrian Stevens, the former UK MD of iSOFT, is also to leave CSC at the end of this month. None of this news will boost CSC’s chances of success with Asia Pac customers, a fact that will not have been lost on rival BT.