Vendors jockey for position

Friday, August 22, 2014

Software vendors realize they are serving a market beset by financial challenges, a shrinking provider base and changing business dynamics.

Add to that: consolidation among their own ranks.

Yet, despite all this, they remain optimistic about their future and the continued viability of the HME industry.

One sure sign of that: Medtrade organizers reported earlier this year that many software vendors signed up for their booths early this year. It’s obvious, amid the shakeout of proviers and vendors, they’re looking to cement their places in the market.

“There is still enough room for everyone, but I believe some additional consolidation is inevitable and necessary,” said Dave Golen, vice president of business development for Davison, Mich.-based Universal Software Solutions. “Many software providers set up an unsustainable business model, with ‘too low’ cost support that affects their long-term survival. You get what you pay for.”

The consolidation wave among software vendors is causing confusion among providers, making it difficult to invest in better software.

“Our customers aren’t sure if the products they are purchasing will be around in a year or two,” Golen said.

Dave Cormack, CEO of Atlanta-based Brightree, concedes that consolidation “has been crazy for the past six to eight months.” By Cormack’s estimation, the vendor community has been reduced by half over the past decade and that “the field is still a little crowded.”

Provider numbers have been drastically reduced, too, but Cormack is encouraged that the remaining providers are strong and ready to proceed with automating their operations.

“There is equilibrium back in the market,” he said. “We don’t take on providers unless they are healthy and I’m impressed with how well so many have adapted.”